NOAA Workforce Management Office
Serving NOAA's Most Valuable Asset - People
Non-foreign Area Retirement Equity Assurance (NAREA)
Under NAREA, employees working in non-foreign areas started receiving locality pay in lieu of COLAs beginning in January 2010. The transition from COLAs to locality pay is being phased in over a three – year period starting January 3, 2010 through December 31, 2012. Employees who retire under an immediate retirement during the transition period may elect to make a deposit for the difference between the basic pay plus locality rate for the Rest of the U.S. (RUS) pay table and the basic pay plus locality rate for employees in the non– foreign area.
Employees who elect to make the deposit must submit their election request at the time they separate for retirement.
Eligibility to make NAREA deposit:
- Employee works outside the contiguous 48 states in a non– foreign area defined in 5CFR 591.205.
- Employee separates from service for retirement between 01/03/2010 and 12/31/2012.
- FERS employees who retire under a MRA +10 (Minimum Retirement Age + 10 years of creditable service) retirement are eligible to make the deposit even if they choose to postpone the start date of their annuity.
- Employee is receiving phased in locality prior to retirement or received phased in locality during the transition period but transferred to a duty station not located in a non– foreign area.
- Employees who resign and are eligible for a deferred annuity are not eligible to make the deposit.
- An employee will pay into the retirement fund an amount equal to the difference between:
- The employee contribution that would have been deducted and withheld from their pay if the full RUS Locality pay had been used; and
- The employee contributions that were actually deducted and withheld.
- Plus interest as outlined under Section 8334(e) in title 5, United States Code
- The agency will also submit their share into the fund
Interest for NAREA deposits accrue annually and are based on the variable interest rate, compounded annually on December 31 of each year.
- 2010 – 3.125%
- 2011 – 2.75%
- Compute 2 retirement estimates showing the annuity with the NAREA Deposit paid and without it paid.
- Provide the estimates to the employee.
- Provide guidance to the employee on the NAREA deposit process.
- Accept payment from employee.
- Forward the payment to the National Finance Center (NFC).
- NFC will process the payment, create an Individual Retirement Record (IRR) for the NAREA payment and forward the IRR to OPM to use when finalizing the employee's annuity.
Employee’s Responsibility: Paying the NAREA Deposit
- Elects to make a deposit under NAREA at retirement using the NAREA Election form.
- Completes the:
- Annotates in the middle of the form or in a separate written statement – "I elect to pay the deposit necessary to obtain credit for the full Locality Pay rate under NAREA in computing my retirement benefits. I understand that the entire deposit must be paid to my agency at separation for retirement and if I do not complete the deposit at that time, the full Locality Pay rate will not be used to compute my annuity."
- Submits the NAREA Election form, Application and payment for the deposit to the servicing Benefits Specialist.
Page last edited: December 28, 2016