Isle federal workers get a pension bo...

Isle federal workers get a pension boost - Hawaii News

There are 23 comments on the Honolulu Star-Bulletin story from Oct 29, 2009, titled Isle federal workers get a pension boost - Hawaii News. In it, Honolulu Star-Bulletin reports that:

More than 30,000 federal workers in Hawaii got a boost in their pensions after President Barack Obama signed the nearly $700 billion 2010 Defense Authorization Act.

Join the discussion below, or Read more at Honolulu Star-Bulletin.

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Sonia de la Torre

Silver Spring, MD

#1 Oct 29, 2009
KUDDOS to US Senator Daniel Akaka and others who worked to make this possible. I have written to OPM on multiple occasions about the unfairness of COLA vs locality pay and I'm finally seeing the light at the end of the tunnel. My concern now, is I'm ready to retire next year and locality pay will be transitioned within the next three years. I'm hoping it can be included at 100% for those ready to retire so we don't have to hold off our retirement an additional two-three years for our high three. I'm sure someone will take this into consideration.
StateTaxPayer

AOL

#2 Oct 29, 2009
So, what about the federal workers who are already retired? Do they get a catch up in their retirement pensions?
Flexo

Keauhou, HI

#3 Oct 29, 2009
So if they can do this for retired federal workers, why not retired military as well, or social security recipients perhaps.
The later two categories who live in Hawaii faced out of pocket living expense increases not experienced by their mainland counterparts but will receive no COLA because the economic indicators that would trigger a COLA adjustment actually declined but local federal retirees would have received COLA increases because of the "local" catch phrase.
I suppose we will now see federal workers trying to get to Hawaii to get that "local" tag on their pay record in preparation for retirement or some other unintended but expensive abuse of the system.
harry

Honolulu, HI

#4 Oct 29, 2009
COLA was not included in retirement but it was not taxed Federally. Will they now have to pay back taxes for all those years?
REAL

Honolulu, HI

#5 Oct 29, 2009
What's the real difference between state, county, and federal employees?

State employees get bashed, county employees get teased, but federal employees get PAID!

When federal employees speak, your Congressional leaders listen! Congratulations to the federal employees, CASH talks, sharing the burden walks.
pops

Honolulu, HI

#6 Oct 29, 2009
How right you are, we as retired military and on social security get screwed and the federal workers get fat. B.S.
Flexo wrote:
So if they can do this for retired federal workers, why not retired military as well, or social security recipients perhaps.
The later two categories who live in Hawaii faced out of pocket living expense increases not experienced by their mainland counterparts but will receive no COLA because the economic indicators that would trigger a COLA adjustment actually declined but local federal retirees would have received COLA increases because of the "local" catch phrase.
I suppose we will now see federal workers trying to get to Hawaii to get that "local" tag on their pay record in preparation for retirement or some other unintended but expensive abuse of the system.
Trash Gordon

Honolulu, HI

#7 Oct 29, 2009
Before bashing the Federal perks, remember that certain State and County employees can beef up their retirement enormously simply by adding on the overtime paid in the last few years as the amount from which the retirement stipend is calculated. Federal works cannot do this. This is why retired cops and the like have all those big SUVs in the driveways of their bigger than average houses. (While off on the regular trips to Vegas, etc.)
revilla

Juneau, AK

#8 Oct 29, 2009
As I understand it from talking to a colleague, locality pay will be transitioned in over the next three years. As the article states, COLA rates will be frozen now. In Year 1, employees will receive locality pay that is one-third COLA (i.e., Federal tax-free) and two-thirds locality pay (presumably the rates will be the same but I don't know and neither did my friend); in Year 2, it will be the reverse, i.e., two-thirds locality pay and one-third COLA; and in Year 3, it will be all locality pay. Also, there is going to be a "buy-out" provision where, if you wanted to pay the taxes that would be due over the transition period attributable to the locality pay portion, you could pay them now and retire now enjoying the full benefit of locality pay. This would address the concern of a previous poster who hoped s/he could retire now and not have to endure a transition period. What s/he would have to endure to retire now is writing the check to cover the tax burden.
bluemoki

Seattle, WA

#9 Oct 29, 2009
This really isn't as great as it sounds. It will take 7 years, not 3 years, to fully implement this new locality pay. That does nothing for folks like me who are eligible to retire in less than 2 years. It still makes more sense for me to move to the mainland for my high 3, otherwise I will have to wait the seven years and then another 3 years to get the full benefit this bill provides. I still think its a good idea, but the benefits are a long ways off yet. Also, the locality pay rate being proposed for Hawaii is only 17.23% (taxed) according to Akaka's website, a big difference from the 25% COLA (untaxed)that we now get. Somehow they say we won't see a decrease in net pay but I don't know how that is possible.
Possible

Honolulu, HI

#10 Oct 29, 2009
it is not possible. Hawaii's actual cost of living is similar to that of San Francisco; however, because OPM uses a bizzare price index in determining a specific areas locality adjustment Hawaii gov workers will get the shaft.

Current workers that are planning to retiring in the next 5-6 years will make out, while others who are new to federal service or who do not plan on retiring soon will suffer financial hardship.

... and there are other policies being implemented that will take into consideration all the back tax that was not paid by those retiring on COLA ... that's why there is a 3 year phase out period.

Fed workers have been moving to San Fran for 3 years to get their high-3. As long as you are taxed on the locality pay for your high three years nothing else matters, so no repayment of taxes is, was or will ever be needed.
the thai kid

Bangkok, Thailand

#11 Oct 29, 2009
good too have obama take care of the state with federal defensce dollars...federal money will help the islands economy hawaii needs these funds to bail out the state ...you dont see linda lingle and the republicans in that defensce picture its the democrats ........linda lingle is on her little china marco polo adventure tring to drum up tourism (what a joke) she should be fixing the economy .....putting the kids back in school......she has neglected her duty as a governor and her lt. governor duke aiona should also be reprimanded as he is a puppet on the string ....i hope he loses big time if he decidedes to run for governor when lingles term is up....down with the republicans the lingles and aionas have ruined hawaii
State Sharks

Honolulu, HI

#12 Oct 29, 2009
Just hope the State of Hawaii does not get to TAX the Federal pension plan to help balance their shortfall as a result of their incompetence and corruption!
Okihwn

Fort Huachuca, AZ

#13 Oct 29, 2009
There is a drawback to converting COLA to locality pay. Although Federal workers currently pay State tax on COLA, they do not pay Federal tax. But the locality pay will now begin to be taxed by the Feds and will possibly push you up into a higher tax bracket

Since: Feb 09

Honolulu, HI

#14 Oct 29, 2009
pops wrote:
How right you are, we as retired military and on social security get screwed and the federal workers get fat. B.S.<quoted text>
go write Akaka...

Since: Feb 09

Honolulu, HI

#15 Oct 29, 2009
to "Possible":

HI and San Francisco may be comparable cost-of-living wise but Federal workers in San Francisco get 34% Locality Pay...
Possible

Honolulu, HI

#16 Oct 29, 2009
jhb3043 wrote:
to "Possible":
HI and San Francisco may be comparable cost-of-living wise but Federal workers in San Francisco get 34% Locality Pay...
indeed. The problem is although Hawaii pays just as much for cost of living as San Francisco, the Feds will only be giving Hawaii Feds about 17% locality pay because OPM uses an archaic index to calculate locality pay. So good deal for outgoing retiree's (who rightfully deserve to have equal retirement) but bad deal for current feds who are not planning on retiring anytime soon.
Questions

Honolulu, HI

#17 Oct 29, 2009
The big struggle in the past was how locality pay would impact younger workers since the COLA was untaxed compensation while locality pay is taxed."

OK, they still haven't addressed the impact of younger workers. Locality pay less than COLA and it gets taxed. Young workers still get screwed
Santos Mercado

Moca, Puerto Rico

#18 Oct 29, 2009
Justice has finally been made! I rather pay taxes on the locality pay and get it back eventually through my retirement pension. Let's hope that some kind of offer is made so that those with many years of service (I have served the US Govmnt for 37 of them mostly outside the mainland) can get a more decent pension, retire sooner and let others take over.
Mad as hell

Honolulu, HI

#19 Oct 30, 2009
I'm so not supprised...
Gotta keep your pawns taken care of right?
realmerv

Wahiawa, HI

#20 Oct 30, 2009
StateTaxPayer wrote:
So, what about the federal workers who are already retired? Do they get a catch up in their retirement pensions?
I read in the Honolulu Advertiser that it isn't retroactive so if you are retired, you missed the boat. It was the last line in their article.

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