QRMC: Overseas COLA rules ‘penalize’ shoppers

[unhappycamper]

QRMC: Overseas COLA rules ‘penalize’ shoppers
By William H. McMichael - Staff writer
Posted : Saturday Sep 6, 2008 6:54:01 EDT

A Pentagon-sponsored pay study says the relative size of exchanges and commissaries on U.S. installations abroad should factor into the Overseas Cost-of-Living Allowance to prevent unintended declines in that monthly payment.

Overseas COLA is paid to more than 250,000 service members at about 600 locations overseas, including Alaska and Hawaii, at a cost of $1.7 billion per year.

Designed to maintain the purchasing power of service members assigned to overseas locations where the average cost of living is higher than in the U.S., the allowance is based on location, whether members live on or off base, and their levels of disposable income based on rank and number of dependents.

Basic rates are set for each overseas location using two annual surveys: a comparison of a “market basket” of similar goods and services in the U.S. and at overseas locations, and a “living pattern survey” in which troops provide data on how much of their disposable income they spend on and off base.

Once an index is set for each location each year, rates can be adjusted as often as every two weeks to reflect fluctuations in foreign currency exchange rates.


Rest of article at: http://www.armytimes.com/news/2008/09/army_QRMCocola_090608w/%2e