The Senate is considering expanding the benefits provisions of a
House-passed bill (HR-1256) already containing several such changes.
A Senate amendment would add two provisions that have cleared the
committee level there but that are not in the House version. One would
allow the government to rehire federal retirees part-time within
certain limits without an offset between salary and annuity, as is
generally required under current law. Retirees could work without an
offset for up to 520 hours in the first six months after retirement,
up to 1,040 hours in any 12-month period and no more than 3,120 hours
lifetime. The other would replace on a phased-in basis the "non-foreign
area" cost-of-living allowance system with locality pay. While the COLAs,
which primarily affect employees in Alaska and Hawaii, are non-taxable,
they do not count toward retirement benefits and are also capped at a
maximum of 25 percent above the base GS salary schedule, whereas there
is no cap on locality pay and locality pay does count toward retirement.
The language would phase in the change over three years with guarantees
