More than 30,000 federal workers in Hawaii got a boost in their pensions after President Barack Obama signed the nearly $700 billion 2010 Defense Authorization Act.

The bill includes a 3.4 percent pay raise for all service members — 37,800 military in Hawaii in 2008 — and kills the controversial National Security Personnel System, designed to link pay raises to job performance for Defense Department employees. It also terminates production of the F-22 fighter jet and the replacement helicopter program for the president's own fleet, which is six years behind schedule.

Cost-of-living adjustment rates for Hawaii federal workers will be frozen as of today, U.S. Sen. Daniel Akaka said, and the transition to locality pay will start in January. Akaka plans to set up information sessions on implementation for federal employees in Hawaii.

“;Federal workers in Hawaii, Alaska and the territories now finally have equity in their retirement pay,”; Akaka said. “;For too long, Hawaii federal employees received far less in retirement than employees on the mainland doing the same jobs. Those who wished to receive the full retirement benefits had to leave their families and work on the mainland for several years. That ends with this new law.”;

Mike Fitzgerald, president of the local chapter of the Federal Managers Association, which has 420 members, said federal employees have been working on this issue since 1998.

“;It's been a long time coming,”; Fitzgerald said.

Under the current federal pay structure, federal employees here receive an annual cost-of-living adjustment to help meet higher living costs. The difference between local and mainland workers comes at retirement. Mainland locality pay counts toward retirement when pensions are computed; COLAs do not. As a result, mainland employees get higher retirement pay than their Hawaii counterparts.

“;It's a matter of fairness,”; said U.S. Rep. Neil Abercrombie, who attended the White House bill signing yesterday.

“;Federal employees in Hawaii, Alaska, Puerto Rico and the Pacific Islands shouldn't have to settle for less financial security in their retirement.”;

Fitzgerald added: “;The big struggle in the past was how locality pay would impact younger workers since the COLA was untaxed compensation while locality pay is taxed.”;

The defense bill also includes a provision drafted by Akaka that allows Obama to upgrade the Distinguished Service Cross awarded posthumously during the Korean War to Maui-born Army Pfc. Anthony T. Kahoohanohano to the Medal of Honor.

Kahoohanohano, a St. Anthony graduate, was killed at Chupa-ri on the Korean peninsula on Sept. 1, 1951, protecting the withdrawal of his squad. He was assigned to Company H, 2nd Battalion, 17th Infantry Regiment, of the 7th Infantry Division. Kahoohanohano killed more than a dozen enemy soldiers, including two using just an entrenching shovel.

Obama has three years to present the medal posthumously to the Kahoohanohano family, which lives in Pukalani.