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Dear Mr. [xxx]:
We have reviewed the claim that you submitted to the General Accounting Office (GAO) on April 9, 1996. For the reasons expressed herein, your claim is denied.
The record establishes that in September 1990, you received an overseas promotion from grade GS-11 to grade GS-12. Five years later, on October 1, 1995, while at the sixth step of grade 12, you exercised your re-employment rights and returned to your original Mechanical Engineer, GS-830-11, special rate position with the [agency]. See 5 C.F.R. 335.102.
In accordance with the retained pay provision in 5 C.F.R. 536.104(a)(4), you were entitled to retained pay, and while on retained pay, you were entitled to receive full locality pay adjustments and half of any annual increases until your pay was within the rate range of your actual grade. See 5 C.F.R. 536.205(c). As a consequence, notwithstanding your change to a lower grade, your salary actually increased -- with the $2,599 locality pay adjustment that is not available for overseas employees -- from $49,324 to $51,923.
However, in January 1996, the pay for step 10 of grade 11 overtook your retained rate of basic pay. As a consequence, your retained pay ceased [see 5 C.F.R. 536.205(d)] and your entitlement to locality pay ceased.
Murray M. Meeker Senior Attorney