HONOLULU (HawaiiNewsNow) - U.S. Sen. Daniel Akaka will be holding 15 information briefings from December 1 to December 8 to explain changes in the way federal workers in Hawaii will be paid. The change is due to the transition to replace non-foreign COLA (cost of living allowance) with locality pay for federal workers in Hawaii.
About 50,000 federal employees in Hawaii, Alaska and U.S. territories currently receive a cost of living allowance (COLA) which is not taxed but also is not figured into retirement calculations. This results in retirees in these locations receiving less retirement pay than counterparts who were employed on the mainland.
Locality pay is taxed and is figured into retirement calculations.
The new law will phase in locality pay over three years; COLA will phase out more slowly to offset the taxes imposed on locality pay. These provisions are designed to protect take-home pay during the transition, which begins in January.
More information about the transition for Hawaii federal workers is available on Senator Akaka's website: akaka.senate.gov