About 50,000 federal government workers in Hawaii, Alaska and the US territories, including American Samoa, will lose cost-of-living adjustments in their paychecks but will gain higher retirement pay in the bargain.
A provision in the final version of the national defense authorisation bill that soon will be voted on in the House and Senate will phase out cost-of-living adjustments over three years for federal workers in these places.
The COLA pay was not taxed and it was not calculated into retirement benefits.
But the provision, sponsored by Hawaii US Senator, Daniel Akaka, would shift such workers from cost-of-living adjustments to so-called locality pay, which is included in retirement calculations.
An Akaka spokesman says workers' pay will not be reduced.