FOR IMMEDIATE RELEASE August 18, 2000 Contact: Edmund Byrnes (202) 606-2572 Settlement on Non-foreign Area COLA Approved

The United States District Court for the Virgin Islands approved the settlement of Caraballo, et al. v. United States, No. 1997-0027 (D.V.I), an agreement between the United States and current and former federal employees who receive non-foreign area cost-of-living allowances (COLAs). The settlement resolves litigation brought by employees who alleged that their COLA rates were too low.

For the past 4 years, the Office of Personnel Management (OPM) has been working with employee representatives to resolve issues relating to the COLA program. Yesterdays court approval of the settlement provides for back payments to COLA employees and important future changes in the COLA program. The United States will make a payment of $232.5 million, which will be distributed according to the terms of the settlement. OPM will develop new regulations to implement the principles developed jointly by COLA employee representatives and OPM. The principles are the product of numerous meetings, consultation with economic experts, and extensive independent economic research conducted to resolve the disputed issues.

Among other things, the settlement provides for interim COLA rates, effective in October 2000. These rates will be higher than current COLA rates in about half of the COLA areas. In the near future, OPM will announce these COLA rates in a Federal Register notice.

For further information, please see colasettlement.com.

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Web page created 21 August 2000
This paged edited on December 4, 2000 to add link to the Cola Settlement website