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Decision Window For Federal Long Term Care Insurance With Shocking Premium Hike Closes 9/30/16

Posted: 3:01 am ET

 

Excerpted from CRS Insight (PDF), September 2016 via Secrecy News:

On July 16, 2016, the U.S. Office of Personnel Management (OPM) announced a premium rate increase for long-term care insurance policies purchased through the Federal Long Term Care Insurance Program (FLTCIP). The new rates were established following an open competitive bidding process. That process awarded a new seven-year contract to the prior insurer and sole bidder, John Hancock Life & Health Insurance Company, to continue providing coverage. According to OPM, the higher premiums are based on an analysis that used updated assumptions of industry trends and claims experience. The analysis determined that current FLTCIP premiums were not sufficient to meet projected costs and benefits. Most federal workers enrolled in FLTCIP are affected by the premium increase (an estimated 264,000 of the 274,000 enrollees).

During OPM’s 2016 Enrollee Decision Period, enrollees affected by the rate increase have until September 30, 2016, to decide whether to:

(1) keep their current coverage and pay the increase;
(2) reduce coverage in order to maintain their current premium; or
(3) allow their policies to lapse (i.e., drop coverage in the program).

Rate increases are scheduled to take effect November 1, 2016.
[…]
According to news sources, premiums are expected to increase by 83%, on average. Some Members of Congress have expressed their concerns to OPM leadership and John Hancock about such dramatic increases, calling for more time for enrollees to assess options as well as for congressional hearings on the issue.

Rate Stability and Long-Term Care Insurance

Federal workers are not the only policyholders to face LTCI premium increases. Over the past two decades, annual LTCI premiums have increased significantly overall for both current and new policyholders. Higher average premiums reflect increased demand for more comprehensive benefit packages (including inflation protection) and higher daily benefit amounts. Premium increases have also been driven by inadequate medical underwriting, premiums that were initially set too low, and insufficient growth in reserves to cover future claims. Thus, premium or rate stability depends largely on the ability of insurers to adequately predict future claims. Most policies issued before the mid-2000s have incorrectly predicted claims, necessitating changes to key pricing assumptions. For example, rising claims, lower mortality rates, lower-than-predicted voluntary termination (lapse) rates, and lower-than-predicted rates of return on investments have been cited as key reasons for LTCI premium increases. Nevertheless, large rate increases, such as those proposed by the FLTCIP, are likely to have a continued effect on consumer confidence in these products, possibly leading to further reductions in consumer demand.

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@StateDept Updates Policy Guidance on Special Rest and Recuperation (SR&R) Travel

Posted: 12:12 am ET

 

On August 10, 2016, the State Department updated its policy guidance on Special Rest and Recuperation (SR&R) for the Foreign Service at State, USAID, Commerce, Agriculture and BBG.  SR&R is discretionary R&R travel authorized by the Under Secretary for Management.  These are additional R&R trips for posts already designated for R&R trips as specified in 3 FAM 3725.2, or for a post that does not normally qualify for an R&R but experiences extraordinary circumstances that warrant a one-time R&R.  Note that due to their immediate proximity to the United States, Mexico border posts are not eligible for SR&R (or R&R) according to the Foreign Affairs Manual.

3 FAM 3727.1 Special Rest and Recuperation (SR&R)
(CT:PER-828; 08-10-2016)
(Uniform State/USAID/Commerce/Agriculture/BBG)
(Applies to Foreign Service Employees only)

a. In extraordinary circumstances, the Under Secretary for Management (M), acting on behalf of the Secretary, may authorize additional R&R trips for posts already designated for R&R trips as specified in 3 FAM 3725.2, or for a post that does not normally qualify for an R&R but experiences extraordinary circumstances that warrant a one-time R&R. This discretionary R&R travel authorized by M is known as Special R&R travel (SR&R).

(1) With the exception of Mexico border posts, any post that is in unaccompanied status or has a combined Post Differential and Danger Pay rate of 35 percent will automatically qualify for one SR&R.

(2) If a post does not automatically qualify for one SR&R or the post automatically qualifies for one SR&R but would like to request additional SR&Rs, that post must seek authorization by having the appropriate regional bureau executive director send a memorandum to the Director of the Office of Allowances (A/OPR/ALS). The memorandum must include a clear justification (in 250 words or less) for any requested SR&R including specific extraordinary conditions of hardship which exist at post. The Director of A/OPR/ALS will convene a nine-member committeewhich shall include one representative from each regional bureau, HR, M/PRI, and Allowancesto review all SR&R requests and send recommendations to M for final approval. In order to recommend an SR&R to M, seven of the nine committee members must vote in favor of the SR&R. A/OPR/ALS will notify all requesting offices of Ms determination and update Special R&R information in the annual bidding tool. One-year Priority Staffing Posts (PSP) and posts with Service Recognition Packages (SRP) fall outside the purview of this process.

(3) Authorization for Special R&R expires annually. Requests for new, multiple, or continuation of Special R&R travel must be resubmitted to regional bureaus by memorandum no later than May 15 each year.

(4) The SR&R qualification process was changed in August 2016. For posts that will lose one or more SR&Rs under the new process, personnel who were serving at or paneled to those posts during the 2016-2017 winter cycle will be grandfathered in under the old system for the length of their tour. This means that those individuals will be awarded the SR&Rs that they would have been given under the system immediately prior to the change in August 2016.

c. The Under Secretary for Management may designate in writing a post for a SR&R where the tour of duty is not traditional. A Special R&R may be warranted because of extreme danger, unaccompanied post status, severely substandard living conditions, extreme isolation, or other unusual conditions. Because of their immediate proximity to the United States, Mexico border posts are not eligible for SR&R (or R&R).

d. Clearances for initiating and terminating a SR&R must be obtained by the requesting regional bureau from other foreign affairs agencies when such agencies have personnel at post. (For USAID, contact the regional bureau AMS staff.)

e. When approval for a SR&R is requested from M, the regional bureau executive director shall recommend whether all employees currently at post or employees arriving at post will be eligible for it. For example, employees on TDY; employees whose departure from post is imminent; or new employees who will not experience the same degree of hardship that current employees have experienced, might be excluded. If M approves the SR&R, the post shall be notified of any such limitations by the regional bureau.

3 FAM 3727.2 Eligibility and Tour of Duty
(CT:PER-828; 08-10-2016)
(Uniform State/USAID/Commerce/Agriculture/BBG)
(Applies to Foreign Service Employees only)

a. The Departments policy for time spent at post for Special R&Rs differs from that of regular R&Rs discussed in 3 FAM 3722, paragraph a. For example, SR&Rs may be authorized for posts with a tour of duty of less than 2 years. In addition, the employee is not required to complete the requirements for the regular R&R in order to be eligible for the Special R&R. For:

Tour of duty of less than 2 years: An employee must be able to complete a minimum of 12 months at post to be eligible for the Special R&R. Generally, a post with a tour of duty of less than 2 years will not be authorized more than one Special R&R.

Tour of duty of 2 years: Employees at posts with 2-year tours of duty (including a split 4-year tour of duty) must be able to complete a minimum of 12 months at post to be eligible for a Special R&R. Generally, no more than two R&R trips (Special and/or regular) will be authorized for posts with a tour of duty of 2 years.

Tour of duty of 3 years: Employees, whose assignments are extended to 3 years at posts that have been granted both Special and regular R&Rs, may receive an additional R&R trip for the extra year of service. Generally, no more than three R&R (Special and regular) trips will be authorized for posts with a tour of duty of 3 years.

b. The Department policy for time spent at post for Special R&Rs differs further in the case of employees serving at certain posts specifically designated by the Director General for home leave after completion of 12 months of continuous service abroad. Employees in such a category should consult applicable service recognition packages and post policies to determine eligibility for R&R travel.

c. The Bureau of Human Resources, Office of Employee Relations, Employee Programs Division, is available for policy guidance.

Read in full:  3 FAM 3720 REST AND RECUPERATION (R&R) TRAVEL (changes are in magenta).

 

Related items:

3 FAH-1 H-3720  | REST AND RECUPERATION (R&R) TRAVEL

3 FAH-1 Exhibit H-3722(1)  Posts and Designated Relief Areas For R&R Travel

 

 

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Mr. Smith Writes to Washington, Goes to Bat For Local Staff in the Persian Gulf’s Unfair Labor Markets

Posted: 2:43 am ET
Updated: 10:17 am PT
[twitter-follow screen_name=’Diplopun

Via AFSA:

William R. Rivkin Award for Constructive Dissent by a Mid-Career Officer – Jefferson Smith, U.S. Embassy Kuwait

Jefferson Smith receives this year’s William R. Rivkin Award for Constructive Dissent by a Mid-Career Officer for his commitment to combatting unfair labor practices and his push for compensation reform for locally employed (LE) staff at posts in the Persian Gulf.

While posted to Kuwait, Management Counselor Smith observed that the nine embassies and consulates in the Persian Gulf region are staffed almost exclusively by third-country nationals (TCNs) who did not enjoy the rights of citizens and earned wages and benefits so low that they could not support their families. U.S. Embassy Kuwait employs more than 200 TCN men and women from 27 different nationalities—and employs no Kuwaitis because the U.S. government does not pay enough to attract them.

Mr. Smith gathered data, framed his arguments and then brought his views to a regional management officers’ conference, where he found allies and organized a regionwide approach. He then wrote a detailed, thoughtful cable to Washington, signed by the six regional ambassadors, proposing that the department should define a new standard for compensating its LE staff at posts employing a majority of TCNs in unfair labor markets.

In short, Mr. Smith challenged the department to lead—not just follow—local practice in these markets. All of his preparation and action had an effect: The under secretary for management approved a Public Interest Determination (a policy exception) to create housing and education allowances for LE staff, and moved U.S. Embassy Kuwait to the top of the list for the next tranche of wage increases. The result was an average 22-percent salary increase in addition to the new allowances.

Mr. Smith’s success in winning a more just compensation package for the LE staff of U.S. Embassy Kuwait was an important milestone that will serve as a model as he and others continue to fight for a more equitable way to compensate employees under these conditions.

Mr. Smith has served in Kuwait since 2014. As a management-coned Foreign Service officer, Mr. Smith has had opportunities to serve in consular, economic, political and management functions in four regional bureaus and six overseas assignments, including Kingston, Dar es Salaam (twice), Yaoundé, Dublin and Kuwait.

The annual award is named after Ambassador William R. Rivkin (1919–1967) who served as ambassador to Luxembourg, Senegal, and Gambia in the 1960s.  He is the father of Charles Rivkin, the current U.S. Assistant Secretary of State for Economic and Business Affairs, and the former U.S. Ambassador to France (2009-2013). Read A/S Rivkin’s Honoring Constructive Dissent: The William R. Rivkin Award on DipNote.

We should note that this is one of AFSA’s three dissent awards and is separate from the State Department “Dissent Channel.” The FAM precludes the use of the official Channel to address “non-policy issues (e.g., management or personnel issues that are not significantly related to substantive matters of policy).”

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$400K Life Insurance Supplemental to Eligible Employees Killed in Terrorist Attacks

Posted: 2:27 am EDT

 

We’re working our way through the‘‘Consolidated Appropriations Act, 2016’’ which became Public Law No: 114-113 on December 18, 2015. Under Special Provisions, SEC . 7034 modifies the life insurance supplemental granted to those employees killed in terrorist attacks  (see p.522 of a pdf file or search text here):

(d) DIRECTIVES AND  AUTHORITIES .—

(5) MODIFICATION OF LIFE INSURANCE SUPPLEMENTAL APPLICABLE TO THOSE KILLED IN TERRORIST ATTACKS .—

(A) Section 415(a)(1) of the Foreign Service Act of 1980 (22 U.S.C. 3975(a)(1)) is amended by striking ‘‘a payment from the United States in an amount that, when added to the amount of the employee’s employer-provided group life insurance policy coverage (if any), equals $400,000’’ and inserting ‘‘a special payment of $400,000, which shall be in addition to any employer provided life insurance policy coverage’’.

(B) The insurance benefit under section 415 of the Foreign Service Act of 1980 (22 U.S.C. 3975), as amended by subparagraph (A), shall be applicable to eligible employees who die as a result of injuries sustained while on duty abroad because of an act of terrorism, as defined in section 140(d) of the Foreign Relations Authorization Act, Fiscal Years 1998 and 1999 (22 U.S.C. 2656f(d)), anytime on or after April 18, 1983.

Terrorism as defined under 22 U.S.C. 2656f(d)), read more here.

President Ronald Reagan and First Lady Nancy Reagan pay their respects and tribute to the 13 American civilian and 4 U.S. military personnel victims of the embassy bombing.

President Ronald Reagan and First Lady Nancy Reagan pay their respects and tribute to the 13 American civilian and 4 U.S. military personnel victims of the embassy bombing. (Photo via Wikipedia)

Here is 3 FAM 3653.1 last updated on February 26, 2015 (PDF) on the Life Insurance Supplement:

(1)  Foreign Service Employees. Section 415 of the Foreign Service Act of 1980 (“Section 415”) allows for payment of a life insurance supplement to any Foreign Service employee who dies from injuries sustained as a result of terrorism while on duty abroad; and

(2)  Other Employees and Unpaid Interns. The life insurance supplement provided under Section 415 is available to any other employee of the Department of State or other relevant agency (as “employee” is defined under 5 U.S.C. 8101, see 3 FAM 3652.1), including but not limited to an individual employed under a PSA or PSC pursuant to 22 U.S.C. 2669(c) or an individual serving in an uncompensated capacity, who dies from injuries sustained as a result of terrorism while on duty abroad and subject to the authority of the chief of mission pursuant to Section 207

Currently, per 3 FAM 3653.3 Amounts Payable (PDF)
(b) Life Insurance Supplement:

(1)  Eligible employees, as defined in 3 FAM 3653.1(b), other than those described in paragraph (2) below, will receive from the employing agency a life insurance supplement payment under Section 415 in an amount that, when added to the amount of the employee’s employer-provided or employer-supported life insurance policy coverage (e.g., Federal Employees’ Group Life Insurance Program or other policy partially funded by the employing agency), if any, equals $400,000; and

(2)  Employees compensated under LCPs, or individuals hired locally and serving in an uncompensated capacity, will receive from the employing agency a life insurance supplement payment under Section 415 in an amount that, when added to the amount of the employee’s employer- provided or employer-supported life insurance policy coverage, if any, is equivalent to two and a half years’ basic salary at the highest step of the highest grade on the employee’s LCP at the time of death (or, for locally employed individuals serving in an uncompensated capacity, the LCP governing the post in which the individual served), not to exceed the equivalent of $400,000.

The modification does not mention retroactive payments but note that it says injuries sustained while on duty abroad due to an act of terrorism, “anytime on or after April 18, 1983.”   That’s the date of the U.S. Embassy Beirut, Lebanon suicide bombing that killed 63 people including 17 Americans.

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Related item:

3 FAM 3620 | FEDERAL EMPLOYEES GROUP LIFE INSURANCE (FEGLI) PROGRAM (PDF)

Americans Held Hostage at US Embassy Tehran For 444 Days Win Compensation After 36 Years. Finally!

Posted: 4:47  pm EDT

 

Very happy to see that this finally happened after so long a wait!

Via NYT:

After spending 444 days in captivity, and more than 30 years seeking restitution, the Americans taken hostage at the United States Embassy in Tehran in 1979 have finally won compensation.

Buried in the huge spending bill signed into law last Friday are provisions that would give each of the 53 hostages or their estates up to $4.4 million. Victims of other state-sponsored terrorist attacks such as the 1998 American Embassy bombings in East Africa would also be eligible for benefits under the law.
[…]
The law authorizes payments of up to $10,000 per day of captivity for each of the 53 hostages, 37 of whom are still alive. Fifty-two hostages were released on Jan. 20, 1981; a 53rd hostage had been released earlier because of illness. Spouses and children are authorized to receive a lump payment of as much as $600,000.
[….]
Some former hostages and their family members had expressed frustration at the Justice and State Departments for blocking efforts over the years to get compensation. In a sense, the spending bill represents Congress’s taking control of the BNP Paribas money back from the Justice Department.  Some hostages did not want to discuss the legislation. “It’s enough,” said Barry Rosen, who was a press attaché at the embassy. “We’ve gone through enough.”

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Related posts:

The Iran Hostages: Long History of Efforts to Obtain Compensation (August 2015)

State Dept Updates 3 FAM 4140 Guidelines For USG Personnel Taken Hostage (September 2015)

Former Iran Hostage John Limbert on Bibi’s Bizarre Piece of Diplomacy (March 2015)

November 4, 1979: Iranian Mob Attacks US Embassy Tehran; Hostages Compensated $50/Day (November 2013)

Supremes Say No to Appeal from US Embassy Iran Hostages (May 2012)

Iranian Mob Attacks British Embassy in Tehran — It’s Dejavu All Over Again! (November 2011)

January 20, 1981: The Iran Hostages – 30 Years Later  (January 2011)

@State Dept’s Danger Pay: All Through With Promises, Promises Now?

Posted: 3:10 am EDT

 

On September 14, we posted about the new State Department’s danger pay posts (New Danger Pay Differential Posts: See Gainers, Plus Losers Include One Post on Evacuation Status). Previously, we’ve written about these upcoming changes including potential fallout to bidding, student loan repayment, security funding allocation, EFM employment, and first and second tour (FAST) officers’ onward assignments (see Danger Danger, Bang Bang — State Department Eyes Changes in Danger Pay). Click here for AFSA’s update to its members regarding the changes in danger pay.

This is the first time the State Department had updated its danger pay process and designation from best we could tell. Of the forty or so danger pay posts, about half lost their designation, including Monterrey and Nuevo Laredo which lost 20%, and all Saudi Arabian posts which lost 15%. Wouldn’t better planning with a longer roll out have been better for everyone? Why was there such a short fuse on this project? Was Congress snapping at somebody’s heels?

One group particularly affected (without any mitigation in place) are Eligible Family Members (EFMs) who receive danger pay but do not receive any other differentials. All EFMs in posts that lost their danger pay designation have suffered a pay cut and will not receive any hardship pay in lieu of the danger pay lost. The dual-income Foreign Service families particularly in Saudi Arabia and some in Mexico had a pay cut of at least 20%.

The changes in the danger pay designation also affected employees who went to some difficult posts to qualify for the student loan program (SLRP).  Student Loan Repayment Program (SLRP) is a recruitment and retention tool used by the Department to attract and retain Civil Service and Foreign Service employees applying for or encumbering specific positions.  The loan repayment is linked to danger/hardship only, and is for posts designated at 20% or greater. We understand that some who qualified for SLRP this year, will not qualify next year if they’re seeing danger/hardship under 20%. Despite that fact that the SLRP was used to “lure” officers to some of these challenging posts.  That section of the FAM updated in May this year, notes that “Posts may be added to or eliminated from this list as differential and danger pay rates change.”

We understand that entry level officers (ELOs, we don’t know how many) felt particularly short-changed by these changes.  These officers typically go out on their first two overseas tours on directed assignments. They go where they’re sent by the State Department. They get equity points based on danger pay and hardship differentials that help determine their next assignment.  We should add that super high equity posts  (like Iraq/Afghanistan, etc.) are not available to first tour officers. A large number of first tour officers end up in visa mill posts in Mexico, China, India, Brazil and posts in Africa. Which means that a 5-10% change in equity in the pecking order is noticeable.

Via reactiongif.com

Via reactiongif.com

I wonder if their CDOs say if you take Promisestan now with 15% danger pay and 20% hardship, you get bidding priority for say Buenos Aires or Madrid when you bid next time. Did the CDOs blink when they said that?  By the time the ELOs bid, Promisestan had been downgraded to zero danger pay with hardship still at 20%.  So ELOs who said yes to 35%, now had to make do with their 20%.

“A claim of fairness and transparency does not make it so,” one writes.

A senior government official had apparently told employees earlier that “this is not going to be such a big deal.” But for a number of employees just starting off on their careers at State, this is going to be a big deal. Somebody made them a promise, an inherent tradeoff when they started, and now they’re told they just have to suck it. We understand that despite efforts by AFSA, FSOs, and some posts themselves argued against danger pay changes or for mitigation — specifically including entry level bidding should these changes be imposed — management apparently had not been responsive.

We sent the following to DGHR on Twitter but he, too, has not been responsive.

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We estimate that this affects the bidding of a small range of A-100 classes, perhaps some members in the 174th-180th classes. And perhaps that’s the problem? A small number of entry level FSOs, though no fault of their own, are negatively impacted in their bidding options by these changes. And the somebodies at the State Department — from M, DGHR, DS, CDA, PRI — have decided that the negative impact to these newbies are acceptable.

Say — isn’t this kind of like going on a cross country A-Z train with the fares changing midway through the trip? Suddenly, here comes the conductor asking for additional fares somewhere at the P stop, even if you’ve originally paid up to get to the Z stop.

The Yoda conductor delivers the bad news:

So sorry, just doing the job, I am.  P stop not as good as Z stop. But F stop, it is not.

If throw up, you must, use bucket under coach seat, please.

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Danger Danger, Bang Bang — State Department Eyes Changes in Danger Pay

 Posted: 15:15 EST

 

No, the world is not getting less dangerous but according to our sources, the State Department is eyeing changes in danger pay that could result in the loss of danger pay for a number of posts worldwide.

A group inside the State Department called the Danger Pay Working Group reportedly noted that the current practice of awarding Danger Pay has “veered from the original legislative language” which narrowly awards the additional compensation for a few extreme circumstances such as active civil unrest and war. Under the proposed changes, the definition of Danger Pay would reportedly revert to — you guess it, “the original legislative language”  which would result in a probable loss of Danger Pay for a number of posts worldwide.

The State Department is also revising its Hardship Differential Pay. The idea appears to involve moving some of the factors which previously resulted in Danger Pay into the Hardship calculation.  The number crunchers estimate that this may not result in equivalent levels of pay but apparently, the hope is “to compensate employees to some degree for these factors.”

Uh-oh!

Let’s back up a bit here — the Danger Pay allowance is the additional compensation of up to 35 percent over basic compensation granted to employees (Section 031 and 040i) for service at designated danger pay posts, pursuant to Section 5928, Title 5, United States Code (Section 2311, Foreign Service Act of 1980).

Here is the full language of 5 U.S. Code § 5928 (via Cornell Law)

An employee serving in a foreign area may be granted a danger pay allowance on the basis of civil insurrection, civil war, terrorism, or wartime conditions which threaten physical harm or imminent danger to the health or well-being of the employee. A danger pay allowance may not exceed 35 percent of the basic pay of the employee, except that if an employee is granted an additional differential under section 5925 (b) of this title with respect to an assignment, the sum of that additional differential and any danger pay allowance granted to the employee with respect to that assignment may not exceed 35 percent of the basic pay of the employee. The presence of nonessential personnel or dependents shall not preclude payment of an allowance under this section. In each instance where an allowance under this section is initiated or terminated, the Secretary of State shall inform the Speaker of the House of Representatives and the Committee on Foreign Relations of the Senate of the action taken and the circumstances justifying it.  [Section effective Feb. 15, 1981, except as otherwise provided, see section 2403 of Pub. L. 96–465, set out as a note under section 3901 of Title 22, Foreign Relations and Intercourse].

In 1983—Pub. L. 98–164 inserted provision that presence of nonessential personnel or dependents shall not preclude payment of an allowance under this section, and that each instance where an allowance under this section is initiated or terminated, the Secretary of State shall inform the Speaker of the House of Representatives and the Committee on Foreign Relations of the Senate of action taken and circumstances justifying it.

In 1984 — Pub. L. 98–533, title III, § 304,Oct. 19, 1984, 98 Stat. 2711, provided that: “In recognition of the current epidemic of worldwide terrorist activity and the courage and sacrifice of employees of United States agencies overseas, civilian as well as military, it is the sense of Congress that the provisions of section 5928 of title 5, United States Code, relating to the payment of danger pay allowance, should be more extensively utilized at United States missions abroad.”

We note that specific provision added in 1983 but it appears that in 2005, the State Department amended the Foreign Affairs Manual (3 FAM 3275-pdf) to say this:

Danger pay may be authorized at posts where civil insurrection, civil war, terrorism, or wartime conditions threaten physical harm or imminent danger to the health or well being of employees. It will normally be granted at posts where the evacuation of family members and/or nonessential personnel has been authorized or ordered, or at posts at which family members are not permitted.

The Global Terrorism Database indicates that there were 3,421 terrorist incidents in 1984, the year when Congress recognized that danger pay allowance should be more extensively utilized at U.S. missions overseas. The same database indicates that there were 11,952 terrorist incidents in 2013. Hard to argue that the world has become less dangerous in the intervening years.

Below is a list of posts with danger pay based on the latest data from the State Department or see snapshot here:

DOS | Top Danger Post Assignments | Feb 2015

DOS | Top Danger Post Assignments | Feb 2015 (click on image for larger view)

 

Post Hardship Differential, Danger Pay, and Difficult-to-Staff Incentive Differential (also known as Service-Needs Differential) are all considered recruitment and retention incentives. These allowances are designed to recruit employees to posts where living conditions may be difficult or dangerous.

 

Continue reading

Snapshot: The State Department’s Danger Pay Locations (as of February 2015)

 Posted: 11:53 EST

 

Danger pay allowance is authorized for service in foreign areas where there exist conditions of civil insurrection, civil war, terrorism, or wartime conditions that threaten physical harm or imminent danger to the health or well being of an employee. To establish danger pay, a post must submit the danger pay factors form (DS578, see pdf) that enumerates specific conditions that justify danger pay. Allowances specialists who prepare assessments that assign points using a standard methodology then review the forms. A Danger Pay Working Group is responsible for reviewing danger pay factors forms to ascertain whether conditions exist to justify payment of the danger pay allowance.

As of this month, a total of 26 countries with 45 posts are eligible to receive danger pay allowance according to the publicly available data from the State Department’s Office of Allowances. We only have a virtual presence post in Somalia, and embassy operations in Damascus, Tripoli and Sana’a have all been temporarily suspended as of this writing.  Note that “other” indicate locations within specific countries not specifically identified, e.g. Herat and Mazar-e-Sharif in Afghanistan. (Learn more, see DSSR 650).

DOS | Top Danger Post Assignments | Feb 2015

DOS | Top Danger Post Assignments | Feb 2015

 

 

The State Dept’s Most Expensive Assignments in the World (February 2015)

Posted: 11:31 EST
Updated: 21:57 PST

 

The “cost-of-living” allowance or COLA is officially called “post allowance” in the State Department.  It is an allowance based on a percentage of “spendable income,” i.e. money you can really put your hands on to spend on goods and services.  The allowance is calculated by comparing costs for goods and services in multiple categories – including food (consumed at home or in restaurants), tobacco/alcohol, clothing, personal care items, furnishings, household goods, medical services, recreation, public transportation, or vehicle-related expenses – to the cost of those same goods and services in Washington, D.C.

The State Department’s Office of Allowances determines a ratio between the average cost of goods and services at the foreign post to costs in Washington, D.C.  It then evaluate expenditure patterns between the foreign location and Washington, D.C. to establish an overall cost index, which may be adjusted biweekly for exchange rate fluctuations.  If the overall cost of goods and services at a foreign post, taking into account expenditure patterns, is at least 3% above the cost of the same goods and services in the Washington, D.C. area, the office  establish a post allowance. See DSSR section 220 for more information.

According to state.gov, this allowance is a balancing factor designed to permit employees to spend the same portion of their basic compensation for current living as they would in Washington, D.C., without incurring a reduction in their standard of living because of higher costs of goods and services at the post.  The amount varies depending on salary level and family size.

We put together a list of countries and posts with the highest State Department COLA rate as of January 2015. Posts in Europe (EUR), Africa (AF), East Asia Pacific (EAP) and the Western Hemisphere (WHA) are represented.  No posts from South Central Asia (SCA) and Near East Asia (NEA) made it to this top list.  The traditionally expected expensive posts like Tokyo, Vienna, Hong Kong, Sydney and Rome are all in the 35% COLA rate and are not included in this list (we chopped the list at 42%; representative posts in France at the 42% rate are included).

Note that we added a couple of columns for the cost of a McDonald’s meal (or equivalent) and cost of a regular cappuccino from numbeo.com, a crowdsourcing site for cost of goods and services around the world. For another snapshot  on most expensive cities for expat employees, click here with data from the Economist Intelligence Unit’s Worldwide Cost of Living ranking (costs compared to NYC) and Mercer’s Cost of Living surveys from 2014.

DOS | Most Expensive Assignments in the World (February 8, 2015)

DOS | Most Expensive Assignments in the World (February 8, 2015)

 

 Update:
Corrected the spelling for Ediburgh. Also the Allowances Bi-Weekly Updates dated February 8, 2015 indicate several changes on the COLA table, so we updated it to reflect that newest data. Switzerland went from 90% to 100% in this latest update. Shanghai, Copenhagen, Auckland and Wellington went from 50% to 42% COLA posts.  Helsinki, Paris, Lyon, Marseille, Versailles and Oslo were all downgraded from 42% to 35%, so we took them off this table. It is conceivable that the rankings in allowances will change again in a couple of weeks or in a few months.  The bi-weekly updates are located here.  The original list we did based on end of January data is located here.

 

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State Department OIG – Published Reports, October 2014

via state.gov/oig

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