A bill to exclude locality adjustments from average pay for purposes of computing the amount of retirement annuities of new employees.
Summary
SB 26 would change how certain federal civilian retirement annuities are calculated for employees and Members covered under chapter 84 of title 5, United States Code. The bill amends the definition of “average pay” so that, for a newly defined category of “revised average pay employee,” locality-based comparability payments are excluded when determining the pay base used to compute retirement benefits. In practical terms, this would prevent locality pay from increasing the pension calculation for workers who first enter covered federal service after the bill’s enactment.
The bill also defines who counts as a “revised average pay employee.” The definition is limited to individuals who, on the date of enactment, are not already covered by the Federal Employees’ Retirement System chapter, are not currently performing creditable civilian service, and have never performed such service, but who later become covered employees or Members and begin creditable service after enactment. The measure is narrowly targeted at future entrants to the system rather than current federal employees or retirees.
Impact
If enacted, SB 26 would amend title 5 of the U.S. Code, specifically section 8401, and would affect the Federal Employees’ Retirement System (FERS) annuity formula for a subset of new federal employees and Members. By excluding locality-based comparability payments from average pay, the bill would likely reduce retirement annuity amounts for affected future hires compared with current law. It would not appear to change retirement calculations for employees already covered before enactment, nor for individuals already receiving benefits.
Sentiment
Based on the available record, the bill appears to have been introduced and referred to committee without recorded floor debate, committee transcript, or vote history. As a result, there is no documented public sentiment in the provided materials beyond the sponsor’s apparent policy preference to narrow pension calculations for new entrants. The absence of votes or hearing testimony suggests the measure was at an early stage and had not yet generated a recorded legislative consensus or opposition in the available data.
Contention
The main policy issue is whether locality pay should count toward federal retirement annuities for future employees. Supporters would likely argue that locality adjustments are intended to reflect geographic labor-market differences and should not inflate long-term pension obligations, while opponents would likely contend that locality pay is part of employees’ actual compensation and should be included in retirement calculations. The bill’s narrow applicability to new employees may reduce immediate controversy, but it still raises concerns for federal workforce recruitment, retention, and the adequacy of retirement benefits for future civil servants.