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Federal Diary

Beginning the New Year by Wrapping Up Some Old Business

By Stephen Barr
Tuesday, January 4, 2005; Page B02

With the publication of new pay tables, the major issues of 2004 that are important to federal employees are just about settled.

In addition to signing off on the pay raises, President Bush has signed a bill that eliminates "open seasons" in the Thrift Savings Plan and a bill that authorizes new vision and dental benefits for federal employees and retirees.

_____More Federal Diary_____
Most Washington Area Government Workers to Get 3.71% Raises for New Year (The Washington Post, Jan 3, 2005)
Familiar Issues Could Fill the New Year (The Washington Post, Jan 2, 2005)
Before Looking Forward, A Glance Back, With Thanks (The Washington Post, Dec 26, 2004)
OPM Adds Guidelines for Transition Year on Executives' Pay System (The Washington Post, Dec 22, 2004)
Federal Diary Page

The TSP needs to issue guidelines to implement the lawthat allows employees to begin investing at any time and allows participants to change the amounts of their investments at any time. Until then, current restrictions -- under which new investors can wait as much as a year to get started -- will stay in place.

Significant work lies ahead on the enhanced dental and vision benefits. The Office of Personnel Management will have to seek bids and set up a stand-alone program, which will be fully financed by enrollees. Benefits probably will be available in 2006.

Over the weekend, OPM posted the 2005 pay tables for General Schedule and other employees. The pay raise averages 3.5 percent, but because of locality adjustments, it varies by metropolitan area. Today's chart shows the new pay rates in the Washington-Baltimore area, which rose by 3.71 percent.

Significant variations in pay rates have been building over the last decade under the locality pay system. A GS-13, Step 1, worker in San Francisco will make $81,494 this year. Employees at the same level will make $74,782 in the Washington area and $72,035 if they work outside a designated pay zone.

Not all government employees receive locality pay. Raises for senior executives are based on qualifications and performance, and no locality adjustments are made. Most Foreign Service officers and GS employees do not receive locality pay when they are overseas.

Such variations have raised questions of equity, especially in the Foreign Service, because locality pay is considered a part of base pay and counts toward retirement benefits.

Yesterday, the TSP released final returns of its investment funds for 2004. Among the best performers were the international stock fund, up 20 percent for the year, and the small and mid-sized company fund, up 18.03 percent.

E-mail: barrs@washpost.com

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