Location counts as COLA rises and falls
September 6, 2008
The possibility of a fatter paycheck was dangled by military officials this spring as an incentive for participating in a government shopping pattern survey.
That reward was realized for two locations in Japan.
The cost-of-living allowance index for servicemembers at Misawa Air Base in northern Japan and Yokosuka Naval Base near Tokyo gained two points in July due to new market data compiled from those surveys, said USFJ locality coordinator Ron Stewart.
A higher index translates into more COLA. The change stays in effect for at least a year.
For Camp Kure and Sasebo Naval Base in southern Japan, the surveys produced a different result: COLA there will drop by two points starting with the Oct. 1 pay period, according to Stewart.
It’s a pinch likely to smart even more in the face of recent COLA declines due to currency fluctuations, which can drive COLA up or down as frequently as twice a month.
The dollar recently has strengthened against the Japanese yen.
On Wednesday, the exchange rate was 106 yen to the dollar.
"It wasn’t too long ago that the rate was 96, 97," Stewart said. "That’s a pretty significant change in a short period of time."
The stronger greenback dropped COLA for the third consecutive pay period for some servicemembers in Japan, according to data posted this week by the Pentagon’s Per Diem, Travel and Transportation Allowance Committee.
COLA is down by two points for active-duty personnel assigned to Camp Zama, Yokota Air Base, Camp Fuji and Naval Air Facility Atsugi, a change effective in the next pay period.
Many factors determine COLA — including rank, years of service, number of dependents and location — but in general, two points equates to about $50 for an E-6 with 10 years of service and three dependents.
For some locations, COLA is the lowest it’s been in at least six months.
Take Yokota Air Base, for example. In January, that E-6 with 10 years of service and three dependents earned $343.42 in COLA per pay period. The allowance peaked at $501.92 in April. COLA for the next pay period will top off at $317.
The two-point increases from the surveys in Misawa and Yokosuka will at least serve to buffer COLA losses due to the exchange rate.
It’s not known what specifically drove those changes, Stewart said.
Two surveys were conducted this spring. The living pattern survey, usually conducted every three years, looks at "what we buy and where we buy it," he said. "The (annual) retail price survey tells us how much it costs."
Adjustments in the COLA index result if, for example, more people indicate they’re shopping off base and the prices of goods and services off base are higher than for similar goods and services in the United States, military officials have said.
The per diem committee uses the survey results to adjust COLA accordingly, Stewart said. USFJ officials aren’t told what factors drove COLA up or down in the four Japan locations, Stewart said.
There were no changes for servicemembers on Okinawa.