Workers worried that transition from NSPS could hurt them down the road

As the Defense Department retreats from its discredited pay for performance program for civilians, some of the workers who denounced it are saying, "Whoa, not so fast."

They are glad to see the National Security Personnel System (NSPS) go, but they don't want their pockets picked in the process.

John H. James Jr. has the Herculean task of moving 226,000 Defense workers, almost the population of Orlando, from NSPS, which Congress has terminated. Most will return to the General Schedule (GS). It's kind of like putting toothpaste back in the tube, but James has proven to be very efficient at it.

So efficient that he expects 75 percent of the NSPS workers to transition from the system by the end of September, more than a year before the January 2012 deadline set by Congress, with "minimal impact to employees."

"We've had good success making that transition from an administrative perspective," James said, in his thoughtful, deliberate way.

Usually, beating deadlines is something that would bring government managers great praise. But in this case, NSPS's efficient termination may come at a cost some workers fear they will personally pay.

In a May 14 letter to members of the Senate Armed Services Committee, Patricia J. Niehaus, president of the Federal Managers Association, said, "We are increasingly concerned with the rush of DOD officials to transition employees out of NSPS without taking a close look at the number of employees likely to be subject to pay retention rules."

Pay retention rules hit workers who received greater raises under NSPS than they would have in the GS and who are returning to it at a higher wage than designated for their GS classification. Under pay retention, their raises will be limited to half of the regular GS increases until the pay rate for their classification catches up to their wage.

"Many of these dedicated employees have crunched the numbers and determined that the General Schedule will not 'catch up' with them by the time they retire over the next decade," Niehaus, wrote. "This is unacceptable."

Although workers will not see their pay decrease under pay retention, for many it would affect their potential retirement income, which is based on the "high three" years of average pay over three consecutive years.

"No employee should lose current, future or retirement pay as a result of a pay cap when converting back to the General Schedule," added Niehaus, who also is a labor relations officer at Travis Air Force Base. She expects to be under pay retention for the rest of her career.

So far, about 17 percent of the 8,800 employees who have been moved from NSPS are on pay retention, according to Pentagon figures. If that rate holds, more than 38,000 workers ultimately would be affected. That estimate isn't far off from information FMA said it gathered from a members survey, which found that "roughly 40,000 or more employees could be facing a decrease in future pay," Niehaus said.

Employees may challenge their assigned GS-grade level, but pay retention, James said, is the "sole provision available under the General Schedule system to ensure NSPS employees suffer no loss of or decrease in pay upon their conversion out of NSPS."

Niehaus differs on that point.

She said the U.S. Code allows "DOD to circumvent pay retention rules under certain circumstances" and pointed to Office of Personnel Management guidance that, FMA says, would allow Defense to promote workers to a higher GS grade than the one they left, based on the impact of the person on the position. This would allow them to get the full pay raises."

Sen. George V. Voinovich (Ohio), the top Republican on the subcommittee that oversees the federal workforce, said he asked Obama administration officials about the pay retention problem, but they had no answer.

He might get answers on June 9, when Sen. Daniel Akaka (D-Hawaii), chairman of the Homeland Security and Governmental Affairs subcommittee on oversight of government management, the Federal Workforce and the District of Columbia, holds a hearing on the NSPS transition.

They probably will hear from people like Annette Cross, an FMA board member who works at a Defense installation in Texas. "I shouldn't be penalized for my performance in the past, and it's been exceptional and I've been rewarded," she said.

Costs on the rise

The Congressional Budget Office estimates legislation that would provide fringe benefits for same-sex partners of federal employees "would increase direct spending by $101 million over the 2010-2015 period and $310 million through 2020." Most of the increase would come from higher health insurance costs through the Federal Employees Health Benefits Program.

"That figure is based on information previously gathered from state and local governments as well as more recent research on the experience of organizations that have adopted similar policies," the agency said in a report released last week.

In December, Sen. Joseph I. Lieberman (I-Conn.), chairman of the Senate Homeland Security and Governmental Affairs Committee, which has approved the bill, cited Office of Personnel Management figures indicating that the measure would add $63 million yearly. A House committee advanced similar legislation in November. In June, President Obama permitted limited benefits for same-sex partners.

More information about NSPS can be found at its Web site, http://www.cpms.osd.mil/nsps/