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Federal Retirement Changes: Excluding Locality Pay for New Employees.

This bill alters how federal retirement annuities are calculated for new employees. Locality-based pay adjustments, which account for cost of living differences, will no longer be included in the average pay used to determine future retirement benefits. This means individuals starting federal service after this bill's enactment may receive lower retirement benefits compared to current employees if their pay included such adjustments.
Key points
Locality pay adjustments will be excluded from the average pay calculation for new federal employees' retirement annuities.
The change applies to individuals who begin federal employment after the bill's enactment date and have no prior creditable civilian service.
Potentially lower retirement benefits for future federal employees who would have received locality adjustments.
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Status: Introduced
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Additional Information
Print number: 119_S_26
Sponsor: Sen. Cassidy, Bill [R-LA]
Process start date: 2025-01-07