69–006 

110TH CONGRESS REPT. 110–877 " ! HOUSE OF REPRESENTATIVES 2d Session Part 1 

FOREIGN SERVICE OVERSEAS PAY EQUITY ACT OF 2008 

SEPTEMBER 24, 2008.—Committed to the Committee of the Whole House on the 

State of the Union and ordered to be printed 

Mr. SMITH of New Jersey, from the Committee on Foreign Affairs, 

submitted the following 

R E P O R T 

[To accompany H.R. 3202] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Foreign Affairs, to whom was referred the bill 

(H.R. 3202) to amend the Foreign Service Act of 1980 to extend 

comparability pay adjustments to members of the Foreign Service 

assigned to posts abroad, and to amend the provision relating to 

the death gratuity payable to surviving dependents of Foreign 

Service employees who die as a result of injuries sustained in the 

performance of duty abroad, having considered the same, report favorably thereon with an amendment and recommend that the bill 

as amended do pass. 

TABLE OF CONTENTS 

Page 

The Amendment ...................................................................................................... 2 

Summary .................................................................................................................. 3 

Background and Purpose for the Legislation ........................................................ 3 

Hearings ................................................................................................................... 4 

Committee Consideration ........................................................................................ 4 

Votes of the Committee ........................................................................................... 4 

Committee Oversight Findings ............................................................................... 4 

New Budget Authority and Tax Expenditures ...................................................... 4 

Congressional Budget Office Cost Estimate .......................................................... 5 

Performance Goals and Objectives ......................................................................... 7 

Constitutional Authority Statement ...................................................................... 7 

New Advisory Committees ...................................................................................... 7 

Congressional Accountability Act ........................................................................... 7 

Earmark Identification ............................................................................................ 7 

Section-by-Section Analysis and Discussion .......................................................... 7 

Changes in Existing Law Made by the Bill, as Reported ..................................... 9 


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THE AMENDMENT

The amendment is as follows: 

Strike all after the enacting clause and insert the following: 

SECTION 1. SHORT TITLE. 

This Act may be cited as the ‘‘Foreign Service Overseas Pay Equity Act of 2008’’. 

SEC. 2. OVERSEAS COMPARABILITY PAY ADJUSTMENT. 

(a) OVERSEAS COMPARABILITY PAY ADJUSTMENT.— 

(1) IN GENERAL.—Chapter 4 of the Foreign Service Act of 1980 (22 U.S.C. 

3961 and following) is amended by adding at the end the following: 

‘‘SEC. 415. OVERSEAS COMPARABILITY PAY ADJUSTMENT. 

‘‘(a) IN GENERAL.—A member of the Service who is designated class 1 or below 

for purposes of section 403 and whose official duty station is neither in the continental United States nor in a non-foreign area shall receive, in accordance with the 

phase-in schedule set forth in subsection (c), the same locality-based comparability 

payment under section 5304 of title 5, United States Code (stated as a percentage) 

as would be payable to such member if such member’s official duty station were in 

the District of Columbia. 

‘‘(b) TREATMENT AS BASIC PAY.—The amount of any locality-based comparability 

payment which is payable to a member of the Service by virtue of this section— 

‘‘(1) shall be considered to be part of the basic pay of such member— 

‘‘(A) for the same purposes as provided for under section 5304(c)(2)(A) of 

title 5, United States Code; and 

‘‘(B) for purposes of chapter 8; and 

‘‘(2) shall be subject to any limitations on pay applicable to locality-based comparability payments under section 5304 of title 5, United States Code. 

‘‘(c) PHASE-IN.—The locality-based comparability payment payable to a member of 

the Service under this section shall— 

‘‘(1) beginning on the first day of the first pay period beginning on or after

the date that fiscal year 2009 appropriations are made available by enactment 

of the Department of State, Foreign Operations, and Related Programs Appropriations Act, 2009, or April 1, 2009, whichever is earlier, be equal to 33.33 

percent of the payment which would otherwise apply under subsection (a); 

‘‘(2) beginning on the first day of the first pay period in fiscal year 2010, be 

equal to 66.67 percent of the payment which would otherwise apply under subsection (a); and 

‘‘(3) beginning on the first day of the first pay period in fiscal year 2011 and 

each subsequent fiscal year, be equal to the payment determined under subsection (a). 

‘‘(d) NON-FOREIGN AREA DEFINED.—For purposes of this section, the term ‘non-foreign area’ has the same meaning as is given such term in regulations carrying out 

section 5941 of title 5, United States Code.’’. 

(2) CONFORMING AMENDMENT.—The table of contents set forth in section 2 of 

such Act is amended by inserting after the item relating to section 414 the following: 

‘‘Sec. 415. Overseas comparability pay adjustment.’’. 

(b) CONFORMING AMENDMENTS RELATING TO THE FOREIGN SERVICE RETIREMENT

SYSTEMS.— 

(1) CONTRIBUTIONS TO THE FUND.—Effective as of the first pay period beginning on or after October 1, 2010, section 805(a) of the Foreign Service Act of 

1980 (22 U.S.C. 4045(a)) is amended— 

(A) in paragraph (1)— 

(i) in the first sentence, by striking ‘‘7.25 percent’’ and inserting ‘‘7 

percent’’; and 

(ii) in the second sentence, by striking ‘‘The contribution by the employing agency’’ through ‘‘and shall be made’’ and inserting ‘‘An equal 

amount shall be contributed by the employing agency’’; 

(B) in paragraph (2)— 

(i) in subparagraph (A), by striking ‘‘, plus an amount equal to .25 

percent of basic pay’’; and 

(ii) in subparagraph (B), by striking ‘‘, plus an amount equal to .25 

percent of basic pay’’; and 

(C) in paragraph (3), by striking all that follows ‘‘Code’’ and inserting a 

period. 


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(2) COMPUTATION OF ANNUITIES.—Section 806(a)(9) of such Act (22 U.S.C. 

4046(a)(9)) is amended by striking ‘‘is outside the continental United States 

shall’’ and inserting ‘‘was outside the continental United States during the period beginning on December 29, 2002, and ending on the day before the first 

day of the first pay period beginning on or after October 1, 2010 (or during any 

portion thereof) shall, to the extent that such computation is based on the basic 

salary or basic pay of such member for such period (or portion thereof),’’. 

(3) ENTITLEMENT TO ANNUITY.—Section 855(a)(3) of such Act (22 U.S.C. 

4071d(a)(3)) is amended— 

(A) by striking ‘‘section 8414’’ and inserting ‘‘section 8415’’; and 

(B) by striking ‘‘is outside the continental United States shall’’ and inserting ‘‘was outside the continental United States during the period beginning 

on December 29, 2002, and ending on the day before the first day of the 

first pay period beginning on or after October 1, 2010 (or during any portion 

thereof) shall, to the extent that such computation is based on the basic salary or basic pay of such member for such period (or portion thereof),’’. 

(4) DEDUCTIONS AND WITHHOLDINGS FROM PAY.—Section 856(a)(2) of such Act 

(22 U.S.C. 4071e(a)(2)) is amended to read as follows: 

‘‘(2) The applicable percentage under this subsection shall be as follows: 

‘‘Percentage Time Period 

7.5 Before January 1, 1999. 

7.75 January 1, 1999, to December 31, 1999. 

7.9 January 1, 2000, to December 31, 2000. 

7.55 January 11, 2003, to the day before the first day of the first pay period beginning on or after October 1, 2010. 

7.5 Beginning on the first day of the first pay period beginning on or after October 1, 2010.’’. 

(c) REPORTING REQUIREMENTS.— 

(1) IN GENERAL.—Not later than October 1, 2010, the Secretary of State shall 

submit to the appropriate congressional committees an assessment of all allowances provided to members of the Foreign Service under the Foreign Service Act 

of 1980 or under title 5, United States Code, and in particular, how such allowances have been or will be affected by the amendments to the Foreign Service 

Act of 1980 made by this Act. 

(2) DEFINITION.—For purposes of this subsection, the term ‘‘appropriate congressional committees’’ means the Committee on Foreign Affairs of the House 

of Representatives and the Committee on Foreign Relations of the Senate. 

SEC. 3. DEATH GRATUITY. 

The first sentence of section 413(a) of the Foreign Service Act of 1980 (22 U.S.C. 

3973(a)) is amended by striking ‘‘at the time of death’’ and inserting ‘‘at level II of 

the Executive Schedule under section 5313 of title 5, United States Code, at the 

time of death, except that for employees compensated under local compensation 

plans established under section 408, the amount shall be equal to the greater of 1 

year’s salary at the time of death or 1 year’s salary at the highest step of the highest grade on the local compensation plan from which the employee was being paid 

at the time of death’’. 

SUMMARY

H.R. 3202, the Foreign Service Overseas Pay Equity Act of 2008, 

establishes an equalized global pay scale for junior members of the 

Foreign Service by resolving the pay discrepancy resulting from 

Washington D.C. based locality pay that is not received by Foreign 

Service personnel stationed overseas. The bill also amends the current death gratuity benefit to standardize the amount paid to surviving dependents of a Foreign Service employee who dies as a result of injuries sustained while serving abroad. 

BACKGROUND AND PURPOSE FOR THE LEGISLATION

The Foreign Service Overseas Pay Equity Act of 2008 reforms 

the Foreign Service compensation system to eliminate, over a 

three-year period, wage disparities (currently 20.89%) between U.S. 


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Government employees who are members of the Foreign Service 

based in Washington D.C. who receive locality pay, and those overseas who do not. Locality-based comparability payments were initiated for certain Federal Government workers under the Federal 

Employees Pay Comparability Act of 1990 in order to make their 

salaries competitive with comparable employment in the private 

sector. 

These payments were extended to employees of the Foreign Service, but only to those based within the United States. When lowor mid-level Foreign Service members are transferred from Washington D.C. to a post overseas, they experience a nearly 21% decrease in basic pay. In order to eliminate current and future inequalities between Foreign Service members stationed in the U.S. 

and those stationed abroad, H.R. 3202 increases overseas base salaries over a three-year phase-in period to match those paid to 

Washington, D.C.-based employees. This equitable system will 

make the Foreign Service more competitive with the private sector 

in recruiting and retaining employees. 

The overseas death gratuity would also be amended to provide a 

more standardized benefit to surviving dependents of any Foreign 

Service employee who dies as a result of injuries sustained in the 

performance of duty abroad. This provision recognizes the risks 

that members of the Foreign Service face while serving in increasingly violent posts and situations. 

HEARINGS

There were no Committee hearings on this legislation. 

COMMITTEE CONSIDERATION

On July 16, 2008, the Committee held a markup and considered 

H.R. 3202. A motion to report the bill, as amended, to the House, 

a quorum being present, was agreed to by voice vote. 

VOTES OF THE COMMITTEE

There were no recorded votes on H.R. 3202. 

COMMITTEE OVERSIGHT FINDINGS

In compliance with clause 3(c)(1) of rule XIII of the Rules of the 

House of Representatives, the Committee reports that the findings 

and recommendations of the Committee, based on oversight activities under clause 2(b)(1) of rule X of the Rules of the House of Representatives, are incorporated in the descriptive portions of this report. 

NEW BUDGET AUTHORITY AND TAX EXPENDITURES

In compliance with Clause 3(c)(2) of House Rule XIII, the Committee adopts as its own the estimate of new budget authority, entitlement authority, or tax expenditures or revenues contained in 

the cost estimate prepared by the Director of the Congressional 

Budget Office, pursuant to section 402 of the Congressional Budget 

Act of 1974. 


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CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

U.S. CONGRESS, CONGRESSIONAL BUDGET OFFICE, Washington, DC, September 17, 2008. 

Hon. HOWARD L. BERMAN, Acting Chairman, 

Committee on Foreign Affairs, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 3202, the Foreign Service 

Overseas Pay Equity Act of 2008. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Sunita D’Monte, who can 

be reached at 226–2840. 

Sincerely, 

PETER R. ORSZAG. 

Enclosure 

cc: Honorable Ileana Ros-Lehtinen 

Ranking Member 

H.R. 3202—Foreign Service Overseas Pay Equity Act of 2008. 

SUMMARY

H.R. 3202 would increase the compensation of certain employees 

of the Foreign Service who serve overseas. CBO estimates that implementing H.R. 3202 would cost $1.3 billion over the 2009–2013 

period, assuming appropriation of the necessary amounts. Enacting 

the bill would not affect direct spending or revenues. 

H.R. 3202 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA) 

and would impose no costs on state, local, or tribal governments. 

ESTIMATED COST TO THE FEDERAL GOVERNMENT

The estimated budgetary impact of H.R. 3202 is shown in the following table. The costs of this legislation fall within budget function 150 (international affairs). 

BASIS OF ESTIMATE

For this estimate, CBO assumes that H.R. 3202 will be enacted 

near the start of fiscal year 2009, that the estimated amounts will 

be appropriated each year, and that outlays will follow historical 

spending patterns for existing programs. 

By Fiscal Year, in Millions of Dollars 

2009 2010 2011 2012 2013 2009–2013 

CHANGES IN SPENDING SUBJECT TO APPROPRIATION 

Estimated Authorization Level 84 191 327 373 427 1,403 

Estimated Outlays 72 172 300 355 409 1,309 

Pay for Overseas Postings 

Section 2 would increase compensation for Foreign Service Officers (FSOs) who are not members of the Senior Foreign Service 


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and are posted overseas. Under current law, FSOs based in the 

United States receive comparability pay in addition to their base 

pay, to reduce the pay disparity between federal and nonfederal 

workers. FSOs who are posted overseas do not receive those 

amounts. (Members of the Senior Foreign Service are compensated 

under a pay-for-performance system that does not differentiate pay 

by posting.) 

Under the bill, FSOs who are posted overseas would be paid the 

same comparability pay received by FSOs posted to Washington, 

D.C. (That comparability pay represented about 17 percent of total 

basic pay for D.C. postings in 2008.) The bill also specifies a phasein period: FSOs would receive one-third of the increased compensation in 2009, two-thirds in 2010, and the full annual amount starting in 2011. (Section 2 would not increase retirement benefits, because FSOs who retire from overseas postings have their annuities 

calculated as though their official duty station had been Washington, D.C.) 

Recent data from the Department of State indicate that roughly 

8,300 FSOs are posted overseas and have an average basic pay of 

about $75,000. In comparison, FSOs posted in Washington have an 

average basic pay of about $91,000. Eliminating the difference between pay for overseas and D.C. postings, and adjusting the new 

pay level to reflect estimated growth in comparability pay (which 

saw average growth of 9.5 percent a year over the past three years) 

yields an estimated cost for 2009 of $42 million—one-third of $126 

million. 

The above increase in basic pay also would lead to an increase 

in other benefits paid to FSOs, such as life insurance, health insurance, hardship pay, and danger pay. According to the department, 

those types of compensation have historically averaged about 71 

percent of basic pay. Therefore, CBO estimates that under the bill, 

in 2009, the department would pay another $30 million—one-third 

of $89 million—in other compensation, for a total cost of $72 million that year. After adjusting for inflation, CBO estimates that 

costs for implementing section 2 would total $1.3 billion over the 

2009–2013 period, assuming appropriation of the necessary 

amounts. 

Death Gratuities 

Section 3 would increase the death gratuities payable to the surviving dependents of Foreign Service employees who die as a result 

of injuries sustained in the performance of their duty overseas. 

Under current law, the death gratuity equals an employee’s annual 

salary at the time of death. Under the bill, the department would 

pay one year’s salary at level II of the Executive Schedule at the 

time of death or, if the employee was compensated under a local 

compensation plan, one year’s salary at highest pay level under 

that plan at the time of their death. Based on historical data from 

the department, CBO estimates that fewer than five death gratuities would be paid each year and that implementing this section 

would cost less than $500,000 a year, and total $1 million, over the 

2009–2013 period, assuming the availability of appropriated funds. 


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INTERGOVERNMENTAL AND PRIVATE–SECTOR IMPACT

H.R. 3202 contains no intergovernmental or private-sector mandates as defined in UMRA and would impose no costs on state, 

local, or tribal governments. 

ESTIMATE PREPARED BY: 

Federal Costs: Sunita D’Monte (226–2840) 

Impact on State, Local, and Tribal Governments: Neil Hood (225– 

3220) 

Impact on the Private Sector: MarDestinee Perez (226–2940) 

ESTIMATE APPROVED BY: 

Peter H. Fontaine 

Assistant Director for Budget Analysis 

PERFORMANCE GOALS AND OBJECTIVES

The Act is intended to resolve the current pay discrepancy resulting from Washington D.C. based locality pay that is not received 

by Foreign Service personnel stationed overseas. The bill also 

amends the current death gratuity benefit. 

CONSTITUTIONAL AUTHORITY STATEMENT

Pursuant to clause 3(d)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee finds the authority for this legislation in article I, section 8 of the Constitution. 

NEW ADVISORY COMMITTEES

H.R. 3202 does not establish or authorize any new advisory committees. 

CONGRESSIONAL ACCOUNTABILITY ACT

H.R. 3202 does not apply to the Legislative Branch. 

EARMARK IDENTIFICATION

H.R. 3202 does not contain any congressional earmarks, limited 

tax benefits, or limited tariff benefits as defined in clause 9(d), 9(e), 

or 9(f) of rule XXI. 

SECTION-BY-SECTION ANALYSIS AND DISCUSSION

Section 1. Short Title. 

This section provides that the short title of the Act is the, ‘‘Foreign Service Overseas Pay Equity Act of 2008.’’ 

Section 2. Overseas Comparability Pay Adjustment. 

This section would amend Chapter 4 of the Foreign Service Act 

of 1980 (22 U.S.C. 3961 and following) to stipulate that Foreign 

Service Officers designated class 1 or below, stationed outside the 

continental United States and not in a non-foreign area, receive locality-based comparability payments under section 5304 of title 5, 

United States Code, that would be paid to a member if his or her 

official duty station were in Washington, D.C. 


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Since this is a substantial pay increase for approximately 7,000 

overseas personnel, the adjustment will be phased in over 3 years. 

The Congressional Budget Office estimates that the cost in FY 

2009 will be $72 million, in FY 2010 will be $172 million, and an 

average of $300–400 million in subsequent years. 

The section also makes conforming amendments to Chapter 8 of 

the Foreign Service Act of 1980 to remove certain provisions related to the Foreign Service Retirement and Disability Fund (the 

‘‘Fund ’’) and Foreign Service Pension System. Foreign Service retirement benefits are computed on the basis of basic salary, which 

includes locality pay. Under the current system, the provision of locality pay and the higher basic salary levels in Washington, D.C. 

provide a serious disincentive for Foreign Service Officers to serve 

overseas later in their careers when their basic salary level directly 

impacts the level of their retirement benefits. The discrepancy has 

skewed incentives to serve overseas. 

Certain changes were made to the Fund and Pension System 

provisions to remove this disincentive by adjusting basic salary 

computations to include locality pay differentials solely for purposes of determining retirement benefits. Subsection (b) sunsets 

the application of this overseas ‘‘virtual locality pay,’’ which no 

longer will be required after implementation of the global pay 

scale. However, virtual locality pay in effect before October 2010 

will continue to be used in computing annuities for employees who 

retire after the new global pay scale takes effect. 

The reporting requirement to the appropriate congressional committees includes a specific requirement that the Secretary of State 

provide an assessment as to how all allowances provided to members of the Foreign Service under the Foreign Service Act of 1980 

or under title 5 of the United States Code have been or will be affected by the amendments to the Foreign Service Act of 1980 made 

by this Act. The Committee is interested in knowing how much the 

allowances may increase as a result of global locality pay, both on 

an individual basis in each country and in the aggregate. The Committee would also like the report to include an assessment regarding the level of allowances that would be required to recruit Foreign Service Officers to hardship, danger and other relevant posts 

given their increased overall salary. The Committee also would like 

an analysis as to whether any increase to allowances creates an 

unintended distortion in the amount of such allowances in relation 

to the purpose for which allowances are intended. 

Section 3. Death Gratuity. 

This section amends section 413 of the Foreign Service Act of 

1980 to provide a more uniform gratuity to the surviving dependents of any Foreign Service employee who dies as a result of injuries sustained in the performance of duty abroad. Currently, the 

amount of the gratuity is equal to the employee’s annual salary at 

the time of death. The amendment would adjust the gratuity for all 

Foreign Service Officers to level II of the Executive Schedule under 

section 5313 of title 5 of the United States Code at the time of 

death. Executive-level II is currently $172,200. Dependents of employees who are paid in accordance with a local compensation plan 

under section 408 of the Foreign Service Act of 1980 would be paid 

one year’s salary at the highest step of the highest grade on that 


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local compensation plan or one year’s actual salary at the time of 

death, whichever is greater. 

The Committee expects that dependents of personnel at overseas 

posts who are employed by private security contractors and pursuant to personal service agreements will receive the same gratuity 

as employees who are paid in accordance with a local compensation 

plan under section 408. The requirement that such death gratuity 

be provided should be included in all local contracts covering such 

personnel. 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italics, 

existing law in which no change is proposed is shown in roman): 

FOREIGN SERVICE ACT OF 1980 

* * * * * * * 

SEC. 2. TABLE OF CONTENTS.—The table of contents for this Act 

is as follows: 

TABLE OF CONTENTS 

* * * * * * * 

CHAPTER 4—COMPENSATION

Sec. 401. Salaries of chiefs of mission. 

* * * * * * * 

Sec. 415. Overseas comparability pay adjustment. 

* * * * * * * 

TITLE I—THE FOREIGN SERVICE OF THE UNITED STATES 

* * * * * * * 

CHAPTER 4—COMPENSATION

* * * * * * * 

SEC. 413. Death Gratuity.—(a) The Secretary may provide for 

payment of a gratuity to the surviving dependents of any Foreign 

Service employee who dies as a result of injuries sustained in the 

performance of duty abroad, in an amount equal to one year’s salary øat the time of death¿ at level II of the Executive Schedule 

under section 5313 of title 5, United States Code, at the time of 

death, except that for employees compensated under local compensation plans established under section 408, the amount shall be equal 

to the greater of 1 year’s salary at the time of death or 1 year’s salary at the highest step of the highest grade on the local compensation plan from which the employee was being paid at the time of 

death. Any death gratuity payment made under this section shall 

be held to have been a gift and shall be in addition to any other 

benefit payable from any source. 

* * * * * * * 


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SEC. 415. OVERSEAS COMPARABILITY PAY ADJUSTMENT. 

(a) IN GENERAL.—A member of the Service who is designated 

class 1 or below for purposes of section 403 and whose official duty 

station is neither in the continental United States nor in a non-foreign area shall receive, in accordance with the phase-in schedule set 

forth in subsection (c), the same locality-based comparability payment under section 5304 of title 5, United States Code (stated as a 

percentage) as would be payable to such member if such member’s 

official duty station were in the District of Columbia. 

(b) TREATMENT AS BASIC PAY.—The amount of any locality-based 

comparability payment which is payable to a member of the Service 

by virtue of this section— 

(1) shall be considered to be part of the basic pay of such 

member— 

(A) for the same purposes as provided for under section 

5304(c)(2)(A) of title 5, United States Code; and 

(B) for purposes of chapter 8; and 

(2) shall be subject to any limitations on pay applicable to locality-based comparability payments under section 5304 of title 

5, United States Code. 

(c) PHASE-IN.—The locality-based comparability payment payable 

to a member of the Service under this section shall— 

(1) beginning on the first day of the first pay period beginning 

on or after the date that fiscal year 2009 appropriations are 

made available by enactment of the Department of State, Foreign Operations, and Related Programs Appropriations Act, 

2009, or April 1, 2009, whichever is earlier, be equal to 33.33 

percent of the payment which would otherwise apply under subsection (a); 

(2) beginning on the first day of the first pay period in fiscal 

year 2010, be equal to 66.67 percent of the payment which 

would otherwise apply under subsection (a); and 

(3) beginning on the first day of the first pay period in fiscal 

year 2011 and each subsequent fiscal year, be equal to the payment determined under subsection (a). 

(d) NON-FOREIGN AREA DEFINED.—For purposes of this section, 

the term ‘‘non-foreign area’’ has the same meaning as is given such 

term in regulations carrying out section 5941 of title 5, United 

States Code. 

* * * * * * * 

CHAPTER 8—FOREIGN SERVICE RETIREMENT AND DISABILITY

SUBCHAPTER I—FOREIGN SERVICE RETIREMENT AND DISABILITY

SYSTEM

* * * * * * * 

SEC. 805. Contributions to the Fund.—(a)(1) Except as otherwise 

provided in this section, ø7.25 percent¿ 7 percent of the basic salary 

received by each participant shall be deducted from the salary and 

contributed to the Fund for the payment of annuities, cash benefits, refunds, and allowances. øThe contribution by the employing 

agency shall be a percentage of basic salary equal to the percentage 

in effect under section 7001(d)(1) of the Balanced Budget Act of 

1997 (Public Law 105–33; 22 U.S.C. 4045 note), and section 505(h) 


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of the Department of Transportation and Related Agencies Appropriations Act, 2001 (as enacted by Public Law 106–346; 114 Stat. 

1356A–54), plus .25 percent of basic salary, and shall be made¿ An 

equal amount shall be contributed by the employing agency from 

the appropriations or fund used for payment of the salary of the 

participant. The employing agency shall deposit in the Fund the 

amounts deducted and withheld from basic salary and the amounts 

contributed by the employing agency. 

(2) Notwithstanding the percentage limitation contained in paragraph (1) of this subsection— 

(A) the employing agency shall deduct and withhold from the 

basic pay of a Foreign Service criminal investigator/inspector of the 

Office of the Inspector General, Agency for International Development, who is qualified to have his annuity computed in the same 

manner as that of a law enforcement officer pursuant to section 

8339(d) of title 5, an amount equal to that to be withheld from a 

law enforcement officer pursuant to section 8334(a)(1) of title 5ø, plus an amount equal to .25 percent of basic pay¿. The amounts 

so deducted shall be contributed to the Fund for the payment of annuities, cash benefits, refunds, and allowances. An equal amount 

shall be contributed by the employing agency from the appropriations or fund used for payment of the salary of the participant. The 

employing agency shall deposit in the Fund the amount deducted 

and withheld from basic salary and amounts contributed by the 

employing agency. 

(B) The employing agency shall deduct and withhold from the 

basic pay of a Foreign Service criminal investigator/inspector of the 

Office of the Inspector General, Agency for International Development, who is qualified to have his annuity computed pursuant to 

section 8415(d) of title 5, an amount equal to that to be withheld 

from a law enforcement officer pursuant to section 8422(a)(2)(B) of 

title 5ø, plus an amount equal to .25 percent of basic pay¿. The 

amounts so deducted shall be contributed to the Fund for the payment of annuities, cash benefits, refunds, and allowances. An equal 

amount shall be contributed by the employing agency from the appropriations or fund used for payment of the salary of the participant. The employing agency shall deposit in the Fund the amounts 

deducted and withheld from basic salary and amounts contributed 

by the employing agency. 

(3) For service as a special agent, paragraph (1) shall be applied 

by substituting for ‘‘7 percent’’ the percentage that applies to law 

enforcement officers under section 8334(a)(1) of title 5, United 

States Codeø, plus .25 percent.¿. 

* * * * * * * 

SEC. 806. Computation of Annuities.—(a)(1) * * * 

* * * * * * * 

(9) For purposes of any annuity computation under this subsection, the basic salary or basic pay of any member of the Service 

whose official duty station øis outside the continental United 

States shall¿ was outside the continental United States during the 

period beginning on December 29, 2002, and ending on the day before the first day of the first pay period beginning on or after October 1, 2010 (or during any portion thereof) shall, to the extent that 

such computation is based on the basic salary or basic pay of such 


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member for such period (or portion thereof), be considered to be the 

salary or pay that would have been paid to the member had the 

member’s official duty station been Washington, D.C., including locality-based comparability payments under section 5304 of title 5, 

United States Code, that would have been payable to the member 

if the member’s official duty station had been Washington, D.C. 

* * * * * * * 

SUBCHAPTER II—FOREIGN SERVICE PENSION SYSTEM

* * * * * * * 

SEC. 855. Entitlement to Annuity.—(a)(1) * * * 

* * * * * * * 

(3) For purposes of any annuity computation under this subsection, the average pay (as used in øsection 8414¿ section 8415 of 

title 5, United States Code) of any member of the Service whose 

official duty station øis outside the continental United States shall¿ 

was outside the continental United States during the period beginning on December 29, 2002, and ending on the day before the first 

day of the first pay period beginning on or after October 1, 2010 (or 

during any portion thereof) shall, to the extent that such computation is based on the basic salary or basic pay of such member for 

such period (or portion thereof), be considered to be the salary that 

would have been paid to the member had the member’s official 

duty station been Washington, D.C., including locality-based comparability payments under section 5304 of title 5, United States 

Code, that would have been payable to the member if the member’s 

official duty station had been Washington, D.C. 

* * * * * * * 

SEC. 856. Deductions and Withholdings From Pay.—(a)(1) * * * 

ø(2) The applicable percentage under this subsection shall be as 

follows: 

7.5 ........... Before January 1, 1999. 

7.75 ......... January 1, 1999, to December 31, 1999. 

7.9 ........... January 1, 2000, to December 31, 2000. 

7.55 ......... After January 11, 2003.¿ 

(2) The applicable percentage under this subsection shall be as 

follows: 

Percentage Time Period 

7.5 Before January 1, 1999. 

7.75 January 1, 1999, to December 31, 1999. 

7.9 January 1, 2000, to December 31, 2000. 

7.55 January 11, 2003, to the day before the first day of the first pay 

period beginning on or after October 1, 2010. 

7.5 Beginning on the first day of the first pay period beginning on or 

after October 1, 2010. 

* * * * * * * 

Æ 


wwoods2 on PRODPC68 with REPORTS