percentage for the allowance area by not less than 
the dollar increase in the locality-based com-
parability payment for a non-special rate employee 
at the same minimum step provided under section 4 
of this Act, and corresponding increases shall be 
provided for all step rates of the given pay range. 
(2) CONTINUATION OF COST-OF-LIVING ALLOW-
ANCE RATE.—If an employee, who the day before 
the date of enactment of this Act was eligible to re-
ceive a cost-of-living allowance under section 5941 of 
title 5, United States Code, would receive a rate of 
basic pay and applicable locality-based comparability 
payment which is in excess of the maximum rate 
limitation set under section 5304(g) of title 5, 
United States Code, for his position (but for that 
maximum rate limitation) due to the operation of 
this Act, the employee shall continue to receive the 
cost-of-living allowance rate in effect on December 
31, 2009 without adjustment until— 
(A) the employee leaves the allowance area 
or pay system; or 
(B) the employee is entitled to receive 
basic pay (including any applicable locality- 
based comparability payment or similar supple-
ment) at a higher rate, 
VerDate Nov 24 2008 
21:48 Mar 04, 2009
Jkt 079200
PO 00000
Frm 00011
Fmt 6652
Sfmt 6201
E:\BILLS\H1266.IH
H1266
hsrobinson on PROD1PC76 with BILLS
but, when any such position becomes vacant, the pay 
of any subsequent appointee thereto shall be fixed in 
the manner provided by applicable law and regula-
tion. 
(3) LOCALITY-BASED
COMPARABILITY
PAY-
MENTS.—Any employee covered under paragraph (2) 
shall receive any applicable locality-based com-
parability payment extended under section 4 of this 
Act which is not in excess of the maximum rate set 
under section 5304(g) of title 5, United States Code, 
for his position including any future increase to stat-
utory pay limitations under 5318 of title 5, United 
States Code. Notwithstanding paragraph (2), to the 
extent that an employee covered under that para-
graph receives any amount of locality-based com-
parability payment, the cost-of-living allowance rate 
under that paragraph shall be reduced accordingly, 
as provided under section 5941(c)(2)(B) of title 5, 
United States Code. 
SEC. 6. APPLICATION TO OTHER ELIGIBLE EMPLOYEES. 
(a) IN GENERAL.— 
(1) DEFINITION.—In this subsection, the term 
‘‘covered employee’’ means— 
(A) any employee who— 
VerDate Nov 24 2008 
21:48 Mar 04, 2009
Jkt 079200
PO 00000
Frm 00012
Fmt 6652
Sfmt 6201
E:\BILLS\H1266.IH
H1266
hsrobinson on PROD1PC76 with BILLS
(i) on the day before the date of en-
actment of this Act— 
(I) was eligible to be paid a cost- 
of-living allowance under 5941 of title 
5, United States Code; and 
(II) was not eligible to be paid lo-
cality-based comparability payments 
under 5304 or 5304a of that title; or 
(ii) on or after the date of enactment 
of this Act becomes eligible to be paid a 
cost-of-living allowance under 5941 of title 
5, United States Code; or 
(B) any employee who— 
(i) on the day before the date of en-
actment of this Act— 
(I) was eligible to be paid an al-
lowance under section 1603(b) of title 
10, United States Code; 
(II) was eligible to be paid an al-
lowance under section 1005(b) of title 
39, United States Code; 
(III) was employed by the Trans-
portation Security Administration of 
the Department of Homeland Security 
and was eligible to be paid an allow-
VerDate Nov 24 2008 
21:48 Mar 04, 2009
Jkt 079200
PO 00000
Frm 00013
Fmt 6652
Sfmt 6201
E:\BILLS\H1266.IH
H1266
hsrobinson on PROD1PC76 with BILLS
ance based on section 5941 of title 5, 
United States Code; or 
(IV) was eligible to be paid under 
any other authority a cost-of-living al-
lowance that is equivalent to the cost- 
of-living allowance under section 5941 
of title 5, United States Code; or 
(ii) on or after the date of enactment 
of this Act— 
(I) becomes eligible to be paid an 
allowance under section 1603(b) of 
title 10, United States Code; 
(II) becomes eligible to be paid 
an allowance under section 1005(b) of 
title 39, United States Code; 
(III) is employed by the Trans-
portation Security Administration of 
the Department of Homeland Security 
and becomes eligible to be paid an al-
lowance based on section 5941 of title 
5, United States Code; or 
(IV) is eligible to be paid under 
any other authority a cost-of-living al-
lowance that is equivalent to the cost- 
VerDate Nov 24 2008 
21:48 Mar 04, 2009
Jkt 079200
PO 00000
Frm 00014
Fmt 6652
Sfmt 6201
E:\BILLS\H1266.IH
H1266
hsrobinson on PROD1PC76 with BILLS
of-living allowance under section 5941 
of title 5, United States Code. 
(2) APPLICATION TO COVERED EMPLOYEES.— 
(A) IN
GENERAL.—Notwithstanding any 
other provision of law, for purposes of this Act 
(including the amendments made by this Act) 
any covered employee shall be treated as an em-
ployee to whom section 5941 of title 5, United 
States Code (as amended by section 2 of this 
Act), and section 4 of this Act apply. 
(B) PAY FIXED BY STATUTE.—Pay to cov-
ered employees under section 5304 or 5304a of 
title 5, United States Code, as a result of the 
application of this Act shall be considered to be 
fixed by statute. 
(C) PERFORMANCE APPRAISAL SYSTEM.— 
With respect to a covered employee who is sub-
ject to a performance appraisal system, no part 
of pay attributable to locality-based com-
parability payments as a result of the applica-
tion of this Act, including section 5941 of title 
5, United States Code (as amended by section 
2 of this Act), may be reduced on the basis of 
the performance of that employee. 
(b) POSTAL EMPLOYEES IN NON-FOREIGN AREAS.— 
VerDate Nov 24 2008 
21:48 Mar 04, 2009
Jkt 079200
PO 00000
Frm 00015
Fmt 6652
Sfmt 6201
E:\BILLS\H1266.IH
H1266
hsrobinson on PROD1PC76 with BILLS
(1) IN GENERAL.—Section 1005(b) of title 39, 
United States Code, is amended— 
(A) by inserting ‘‘(1)’’ after ‘‘(b)’’; 
(B) by striking ‘‘Section 5941,’’ and in-
serting ‘‘Except as provided under paragraph 
(2), section 5941’’; 
(C) by striking ‘‘For purposes of such sec-
tion,’’ and inserting ‘‘Except as provided under 
paragraph (2), for purposes of section 5941 of 
that title,’’; and 
(D) by adding at the end the following: 
‘‘(2) On and after the date of enactment of the Non- 
Foreign Area Retirement Equity Assurance Act of 2009— 
‘‘(A) the provisions of that Act and section 
5941 of title 5 shall apply to officers and employees 
covered by section 1003(b) and (c) whose duty sta-
tion is in a nonforeign area; and 
‘‘(B) with respect to officers and employees of 
the Postal Service (other than those officers and em-
ployees described under subparagraph (A)), section 
6(b)(2) of that Act shall apply.’’. 
(2) CONTINUATION OF COST-OF-LIVING ALLOW-
ANCE.— 
(A) IN
GENERAL.—Notwithstanding any 
other provision of this Act, any employee of the 
VerDate Nov 24 2008 
21:48 Mar 04, 2009
Jkt 079200
PO 00000
Frm 00016
Fmt 6652
Sfmt 6201
E:\BILLS\H1266.IH
H1266
hsrobinson on PROD1PC76 with BILLS
Postal Service (other than an employee covered 
by subsection (b) or (c) of section 1003 of title 
39, United States Code, whose duty station is 
in a nonforeign area) who is paid an allowance 
under section 1005(b) of that title shall for all 
purposes be treated as if the provisions of this 
Act (including the amendments made by this 
Act) had not been enacted, except that the cost- 
of-living allowance rate paid to that employee— 
(i) may result in the allowance exceed-
ing 25 percent of the rate of basic pay of 
that employee; and 
(ii) shall be the greater of— 
(I) the cost-of-living allowance 
rate in effect on December 31, 2009, 
for the applicable area; or 
(II) the applicable locality-based 
comparability pay percentage under 
section 4. 
(B) RULE OF CONSTRUCTION.—Nothing in 
this Act shall be construed to— 
(i) provide for an employee described 
under subparagraph (A) to be a covered 
employee, as defined under subsection (a); 
or 
VerDate Nov 24 2008 
21:48 Mar 04, 2009
Jkt 079200
PO 00000
Frm 00017
Fmt 6652
Sfmt 6201
E:\BILLS\H1266.IH
H1266
hsrobinson on PROD1PC76 with BILLS
(ii) authorize an employee described 
under subparagraph (A) to file an election 
under section 7 of this Act. 
SEC. 7. ELECTION OF ADDITIONAL BASIC PAY FOR ANNU-
ITY COMPUTATION BY EMPLOYEES. 
(a) DEFINITION.—In this section, the term ‘‘covered 
employee’’ means any employee— 
(1) to whom section 4 applies; 
(2) who is separated from service by reason of 
retirement under chapter 83 or 84 of title 5, United 
States Code, during the period of January 1, 2010, 
through December 31, 2012; and 
(3) who files an election with the Office of Per-
sonnel Management under subsection (b). 
(b) ELECTION.— 
(1) IN
GENERAL.—An employee described 
under subsection (a)(1)–(2) may file an election with 
the Office of Personnel Management to be covered 
under this section. 
(2) DEADLINE.—An election under this sub-
section may be filed not later than December 31, 
2012. 
(c) COMPUTATION OF ANNUITY.— 
(1) IN GENERAL.—Except as provided under 
paragraph (2), for purposes of the computation of 
VerDate Nov 24 2008 
21:48 Mar 04, 2009
Jkt 079200
PO 00000
Frm 00018
Fmt 6652
Sfmt 6201
E:\BILLS\H1266.IH
H1266
hsrobinson on PROD1PC76 with BILLS
an annuity of a covered employee any cost-of-living 
allowance under section 5941 of title 5, United 
States Code, paid to that employee during the first 
applicable pay period beginning on or after January 
1, 2010, through the first applicable pay period end-
ing on or after December 31, 2012, shall be consid-
ered basic pay, as defined under section 8331(3) or 
8401(4) of that title. 
(2) LIMITATION.—The amount of the cost-of- 
living allowance which may be considered basic pay 
under paragraph (1) may not exceed the amount of 
the locality-based comparability payments the em-
ployee would have received during that period for 
the applicable pay area if the limitation under sec-
tion 4 of this Act did not apply. 
(d) CIVIL SERVICE RETIREMENT AND DISABILITY 
RETIREMENT FUND.— 
(1) EMPLOYEE
CONTRIBUTIONS.—A covered 
employee shall pay into the Civil Service Retirement 
and Disability Retirement Fund— 
(A) an amount equal to the difference be-
tween— 
(i) employee contributions that would 
have been deducted and withheld from pay 
under section 8334 or 8422 of title 5, 
VerDate Nov 24 2008 
21:48 Mar 04, 2009
Jkt 079200
PO 00000
Frm 00019
Fmt 6652
Sfmt 6201
E:\BILLS\H1266.IH
H1266
hsrobinson on PROD1PC76 with BILLS
United States Code, during the period de-
scribed under subsection (c) of this section 
if the cost-of-living allowances described 
under that subsection had been treated as 
basic pay under section 8331(3) or 
8401(4) of title 5, United States Code; and 
(ii) employee contributions that were 
actually deducted and withheld from pay 
under section 8334 or 8422 of title 5, 
United States Code, during that period; 
and 
(B) interest as prescribed under section 
8334(e) of title 5, United States Code, based on 
the amount determined under subparagraph 
(A). 
(2) AGENCY CONTRIBUTIONS.— 
(A) IN GENERAL.—The employing agency 
of a covered employee shall pay into the Civil 
Service Retirement and Disability Retirement 
Fund an amount for applicable agency con-
tributions based on payments made under para-
graph (1). 
(B) SOURCE.—Amounts paid under this 
paragraph shall be contributed from the appro-
priation or fund used to pay the employee. 
VerDate Nov 24 2008 
21:48 Mar 04, 2009
Jkt 079200
PO 00000
Frm 00020
Fmt 6652
Sfmt 6201
E:\BILLS\H1266.IH
H1266
hsrobinson on PROD1PC76 with BILLS
(3) REGULATIONS.—The Office of Personnel 
Management may prescribe regulations to carry out 
this section. 
SEC. 8. REGULATIONS. 
(a) IN GENERAL.—The Director of the Office of Per-
sonnel Management shall prescribe regulations to carry 
out this Act, including— 
(1) rules for special rate employees described 
under section 3; 
(2) rules for adjusting rates of basic pay for 
employees in pay systems administered by the Office 
of Personnel Management when such employees are 
not entitled to locality-based comparability payments 
under section 5304 of title 5, United States Code, 
without regard to otherwise applicable statutory pay 
limitations during the transition period described in 
section 4 ending on the first day of the first pay pe-
riod beginning on or after January 1, 2012; and 
(3) rules governing establishment and adjust-
ment of saved or retained rates for any employee 
whose rate of pay exceeds applicable pay limitations 
on the first day of the first pay period beginning on 
or after January 1, 2012. 
(b) OTHER PAY SYSTEMS.—With the concurrence of 
the Director of the Office of Personnel Management, the 
VerDate Nov 24 2008 
21:48 Mar 04, 2009
Jkt 079200
PO 00000
Frm 00021
Fmt 6652
Sfmt 6201
E:\BILLS\H1266.IH
H1266
hsrobinson on PROD1PC76 with BILLS