Defense Conference Bill Would Restore ATG Retirement Benefits and Ensure Fair Retirement Benefits for Federal Workers in Alaska

WASHINGTON, D.C. – U.S. Sen. Lisa Murkowski, R-Alaska, announced today that the Senate has approved the Fiscal Year 2010 $680.2 billion Defense Authorization bill that would restore retirement benefits for Alaska Territorial Guard (ATG) members and ensure pay and retirement equity for federal employees in Alaska, Hawaii and the U.S. territories.

The Fiscal Year 2010 Defense Authorization conference bill was approved by the Senate and now goes to President Obama who is expected to sign it into law. That will bring to a successful conclusion an effort by Murkowski and Sen. Mark Begich, D-Alaska, to restore military retirement benefits to some two dozen ATG members who defended Alaska during World War II.

“I have worked hard all year to get the ATG retirement benefits restored, despite strong objections by the Obama administration, and I was pleased to see the Senate recognize these brave men’s service during World War II,” Murkowski said.

“With the passage of time, people forget that Alaska was invaded by Japanese forces while elements of the regular military were engaged elsewhere. The Alaska Territorial Guard was our primary defense against further incursions into our Great Land. The members of the Alaska Territorial Guard agreed to put their lives on the line to defend Alaska. Their sacrifice and commitment to the defense of America was no less significant than that of our active duty forces. It is appropriate that our nation honor their service by restoring their retirement benefits.”

In addition to restoring ATG benefits and ensuring fair retirement benefits for Alaska’s federal employees, the bill also included an amendment co-sponsored by Sens. Russ Feingold, D-Wisconsin and Murkowski. The amendment would help ensure wounded service members of the Guard and Reserves are not discharged before their injuries are treated and evaluated. Many wounded service members have been discharged prematurely and this has compromised their recovery and imposed additional hardships upon them and their families.

During consideration of the Defense Authorization bill in July, the Senate accepted an amendment by Alaska’s two senators that would restore military retirement benefits to about two dozen Alaska Territorial Guard members whose service in the ATG was considered active duty service until the Defense Department reversed its position on the issue earlier this year.

Last month, the Obama administration announced that it objected to a similar provision Murkowski had included in the Fiscal Year 2010 Defense Appropriations bill. A White House Statement of Administration Policy said that counting the ATG’s WWII service as ‘active duty’ would create a bad precedent. In a Senate floor speech, Murkowski said the precedent argument “defies logic and history,” and she cited the Fiscal Year 2001 Defense Appropriations Act in which Congress recognized service in the ATG as active duty service. That bill required the Secretary of Defense to issue discharge certificates to each member of the ATG if it was determined that the nature and duration of the service warranted it.

No former member of the Alaska Territorial Guard earned his military retirement pay solely through service in the Territorial Guard. Many remained in the military after their Territorial Guard service ended and earned the right to retirement pay as a result of their subsequent service. The language in the Defense Authorization bill clarifies that they are entitled to receive higher retirement payments on account of their Territorial Guard service.

The defense bill also included a retirement equity provision for federal employees in Alaska, Hawaii and the U.S. territories.

Federal workers in Alaska, Hawaii and the U.S. territories currently receive a non-foreign cost of living allowance (COLA) based on the increased costs of living in those areas as compared to the District of Columbia. But unlike locality pay received by federal employees in the contiguous 48 states, the COLA is not factored in for retirement purposes. Furthermore, while locality rates generally increase, non-foreign COLA rates have been gradually declining and are scheduled to drop for all non-foreign COLA areas later this year.  

The defense bill would freeze non-foreign COLA rates at their current levels and phase-in locality pay over the next three years. Non-foreign COLA would be phased out at a slower rate than locality pay is phased in. At the end of the three year period, if the locality pay rate is less than the offset amount of non-foreign COLA for a particular area, employees would continue to receive the difference in non-foreign COLA and locality pay until the locality rate reaches the offset COLA rate. Only at that time would employees no longer receive non-foreign COLA.

“We came so close last year to giving Alaska’s federal employees the certainty they need to make informed retirement decisions. The Senate passed the bill. The House of Representatives did not. Alaska’s federal employees have spoken loud and clear that they prefer locality pay which counts toward their retirement over their current tax free COLA which does not,” Murkowski said.

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