FSM Congress Passes New COLA Bill

Palikir, Pohnpei. February 13, 2015. On January 29, 2015, the 18th FSM Congress during its 6th Regular Session enacted a revised COLA bill, which proposes to provide for a $40 cost-of-living allowance (COLA) per 80 hours pay period for employees of the FSM National Government effective July 1st 2015.

In July 2014, the President had vetoed an earlier COLA bill known as Congressional Act No. 18-90.

Congress, however, opted not to override the Presidential veto, but instead have recently introduced and enacted a new COLA bill, CB No. 18-252 CD2 [CA No. 18-112], with some variations from the original bill.

The earlier versions of the COLA bill, including CB No. 18-11 and CB No. 18-198, proposed a three years tax-free $40 cost-of-living-allowance per 80 hours pay period to FSM Government Employees under the Public Service System whose annual salaries did not exceed $15,000.

The newly enacted COLA bill, CB No. 18-252 CD2 [CA No.18-112], proposes the same dollar figure in COLA adjustments subject to required taxes for FSM National Government Employees including contract and exempt employees for an unspecified time period.

The bill, however, exempts certain FSM Government employees from receiving the COLA adjustments including Members of Congress, the President and Vice President, all employees appointed to a position requiring advise and consent as required by law, employees receiving professional premium, and employees receiving foreign service premium.

The cost-of-living allowance (COLA) as defined in the bill is “the increase in base salary to compensate for loss of purchasing power due to inflation.”

At the time of this release, this Congressional Act has not become a Public Law.

For more information on the COLA bills and its Committee Reports, please refer to CB No. 18-11, CB No. 18-198 [CA No. 18-90], CB No. 18-252 CD2 [CA18-112], SCR No. 18-133, and SCR No. 18-157 on the FSM Congress website at www.fsmcongress.fm.

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