FSM Government Employees Won’t Get COLA This Year

Pacific Islands Development Program, East-West Center With Support From Center for Pacific Islands Studies, University of Hawai‘i

News Release

FSM Information Services Palikir, Pohnpei, FSM

October 8, 2014

The Federated States of Micronesia Congress passed a bill on July 12, 2014, to allow for a Cost of Living Allowance or COLA for employees covered under the FSM National Public Service System Act with annual base salary of $15,000 or less.

The COLA would add a non-taxable $40 per 80 hours for eligible employees "to compensate for loss of purchasing power due to inflation."

But FSM President Manny Mori vetoed the legislation, saying there was no clear rationale for limiting the allowance to only those employees earning $15,000 or less when the fact is that inflation affects all employees.

He added, "The bill in its current form appears to discriminate against other employees under the Public Service System Act, for instance those earning $15,500 or above, whose purchasing power is also affected by inflation."

Congress considered overriding the veto during its fifth regular session which concluded on Oct. 3, 2014. However, the session ended without Congress voting on the override.

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