Exclude locality adjustments from average pay for purposes of computing the amount of retirement annuities of new employees.

This proposal would change how retirement and disability pay is calculated for future federal workers. It would no longer count “locality pay” (extra pay based on where you work) when figuring those benefits for new employees in the Federal Employees’ Retirement System. Current workers are not affected; the change applies only to people who are hired after the law takes effect and who have no past service that counts toward federal retirement. This means future benefits would be based on base pay only, not base pay plus locality adjustments .

In simple terms, if you start a new federal job after this becomes law, your retirement check would be calculated without the local pay add-on, even if you work in a high-cost area. The bill creates a category for these new hires to make the change clear in the law .

• Who is affected: New federal employees covered by FERS who have no prior creditable federal service
• What changes: Locality pay is excluded from the pay used to calculate retirement and disability benefits
• When: Applies after the date the law is enacted