Federal Diary Live
Wednesday, May 21, 2008; 12:00 PM
The Post's Stephen Barr is the author of The
The transcript follows.
Stephen Barr: Thanks to all joining this discussion today. The government's march toward "pay for performance" continues, with the intelligence community last week announcing a plan to phase in pay bands and use job ratings to better reward the best employees. Importantly, officials say that the system will not let employees in the intelligence agencies fall behind the General Schedule raises. What do you think of performance-based pay supplanting the GS, and what promises do you look for from your agency leaders on pay? This is an important topic, and I hope many of you will use part of your lunch break to respond. Thanks again!
Northern Virginia: As a retired NGA employee, I can attest that the new pay system is a way to remove objectivity from the personnel system. The new system gives cover to unqualified and incompetent personnel. It lets "history majors" and "education majors" designate themselves as "engineers"." Competency is subjugated to personality. If you are happy with the "intelligence failure" that contributed to the invasion of Iraq, the next one will be even bigger.
Stephen Barr: Interesting. An official with the National Geospatial-Intelligence Agency, or NGA, said last week that the agency's nine-year experience with performance pay was highly successful. In fact, it will be the model that the rest of the intelligence agencies will build on. Hopefully, congressional committees will track implementation of this broader effort.
Rockville, Md.: I'm glad Congress is looking into the sick leave disparity between CSRS and FERS employees (as I'm FERS). I think the current plan will mitigate -- but not solve -- the problem. When I retire, I will be in one of three groups: less than 500 hours of sick leave, between 500 and 1,500 hours, or greater than 1,500 hours. At a salary of about $150,000 (or $72/hour), 1,500 hours causes me to hit the max of $10,000 payout (paying on 15 percent of hours in excess of 500).
If I'm in the groups with than 500 hours or more than 1,500 hours, I'll burn my sick leave, as it won't have any benefit to me -- just like now. And if I'm in the middle group, I'll still burn my sick leave instead of using annual leave. If I start my last year working with 240 hours of carried-over annual leave and plan on retiring at the end of the year, I will earn another 208 hours. These 448 hours will be paid out at 100 percent of my salary. If I want a day off, I can use annual leave (and forgo the 100 percent payoff) or use sick leave (and forgo a 15 percent payoff). Hmmmm, which will I use? And every other day I want off, the question is "is this day 'worth' 15 percent of a day in pay?" Almost always, the answer will be yes.
washingtonpost.com: Sick-Leave Abuse Prompts Calls to Compensate for Unused Time (Post, May 15)
Stephen Barr: Thank you for this feedback. Certainly one way to look at it. Would it be best for Congress to ignore this issue, because the CSRS folks will be out of government in a few years and the equity issue should fade away at that point?
Washington:"Importantly, officials say that the system will not let employees in the intelligence agencies fall behind the General Schedule raises." Ha! My agency went off GS more than a decade ago and moved to paybands. I looked at my pay this year and realized I was about 5 percent lower than where I would be had we stayed on GS -- assuming no Quality Step Increases. However, I did get some "pay bonuses" (i.e. extra raise) during the years, which probably would have been QSIs. Therefore, I likely am more than 5 percent lower than GS. GS is pay-for-performance. It has worked for many years and there's nothing better.
Stephen Barr: Thanks, D.C. My sense is that only each individual will have a sense of where he or she stands compared to the GS, because most of the data on these systems is presented in averages.
Baltimore: Stephen, regarding yesterday's column, if the tax-free Roth option is approved for the TSP, when will any matching funds be taxed? Will they be taxed currently and be tax-free upon withdrawal, or will they be tax-free currently (as they are now) and be taxed upon withdrawal? The latter option would mean that the matching funds (and their earnings) would need to be kept separate from the employee contributions (and their earnings).
washingtonpost.com: Tax-Free Roth Option Proposed for Savings Plan (Post, May 20)
Stephen Barr: Baltimore, this is an area where we need the help of a pension plan expert, so if one is in the audience today, now is the time to speak up.
From what I know, to realize the benefit from a Roth account and receive tax-free earnings, the distribution from the account must be "qualified." That means you are at least 59 1/2 years old and you have at least five years of participation in the Roth account. The earnings portion of a non-qualified distribution is subject to ordinary income tax and a 10 percent early withdrawal penalty. Under Roth rules, participants cannot elect to withdraw only contributions, and leave taxable earnings to be withdrawn at a later date.
As you can see, this is difficult for me to explain. TSP is worried that sorting out the different tax treatments of earnings with standard/pre-tax and the Roth accounts will cause them accounting nightmares, because these Roths, if put into the TSP, will likely create incentives for some participates to invest differently.
Silver Spring, Md.: Greetings and thanks for addressing my question. Now that Maryland, New Jersey and several other states have mandated family health insurance plans covering children up to 25 years old, what is happening to the federal health plans that currently only cover children until their 22nd birthday? Are there any bills in Congress that are being considered and for which we can lobby?
Stephen Barr: Rep. Danny Davis (D-Ill.) has proposed raising the age to 25. So your best bet is to contact his office and ask how you can help.
Falls Church, Va.: In terms of pay for performance, should a computer scientist get a higher pay than an IT specialist or an analyst (assuming they are in the same band)? Thanks.
Stephen Barr: Pay bands are split along occupations, so, yes, just as today, some jobs will be paid more, even when they are in the same band.
Washington:"My sense is that only each individual will have a sense of where he or she stands compared to the GS, because most of the data on these systems is presented in averages." Ten years ago, I got my GS-14 at my agency. At that time, I could map my salary almost exactly to a GS-14/5 (off by a couple $100). After 10 years, I should be a GS-14/9. I know what a 14/9 makes in Washington in 2008 ($124,175). I'm making $6,000 less than that. There's no sense to it -- it is concrete.
Stephen Barr: Agencies adopting performance pay anticipate being able to move their best employees up through the bands faster than what is possible under the GS. So some people will be ahead of the GS, perhaps many, if the agency receives strong and consistent payroll funding from the Congress.
Sick leave: I'm CSRS, 56 years old, and plan to work another 14 years ... I don't think we should wait 15-20 years to address the FERS sick leave problem ... they already get much less pension guaranty than I do...
Stephen Barr: Yes, the FERS pension guarantee is smaller, but FERS employees get matching contributions for the TSP, and an analysis by the Congressional Research Service suggests that the retirement income from CSRS and FERS are about equal. This assumes, of course, that the TSP stock funds are not in the tank for an employee's entire career....
Arlington, Va.: There has been much discussion about the retirement wave and the need to attract young employees. What are some parts of workday life that are being discussed to keep younger employees? Has there been any discussion on changing the roles beginning employees take on? Are efforts being made so new employees can see their efforts as more rewarding, and worth sticking with as a career?
Stephen Barr: Your questions go to the core of some of Paul Light's research. A New York university professor, Light worries that agencies show little interest in rearranging jobs to make their work more interesting and challenging. But it is hard to generalize on this, because agencies vary widely in their work, and many do a good job of orienting employees and making new hires feel a part of the team.
Washington: I'm not sure if this is the right chat for my question, but it's worth a shot. I'm currently looking for a federal job in Boston, but need to stay in Washington until I find something in that vicinity. The job announcements for the few available jobs in my field often indicate that they only are taking applicants currently in the commuting area. My spouse already has moved to Boston and we just bought a home there. Do you have any suggestions on how to get around this, like listing my address as the local Boston address? Thanks!
Stephen Barr: Okay, HR experts, help us out here.
I don't see any harm in listing two addresses. If that is not feasible, then I would make it clear in a cover letter that your household is in transition from D.C. to Boston, and that you will be able to meet any requirements for a local address, etc.
Peoria, Ill.: TSA has used a pay-for-performance banded system (based on or inherited from the FAA's) since its inception. Most of the personnel stories about TSA concern high turnover and poor morale. Because this program has been going on for more than five years and has not been a success, why the continued emphasis on pay for performance when it does not seem to work?
Stephen Barr: Most new pay systems go through a shake-down cruise, as managers learn how to administer them. TSA has modified its pay system a few times, and it will likely evolve some more.
Agencies with jobs that require high skill levels and advanced degrees are finding it increasingly difficult to compete for talent. Agencies also are not certain they are getting the best applicants for entry level jobs, given the mostly negative views many college graduates hold toward federal service. So agencies look at pay and other benefits to see if changes can be made.
Arlington, Va.: When will all GS be converted to NSPS? I have heard off and on about this plan in my Defense agency. Thank you
Stephen Barr: Although NSPS initially sought to fold in almost all Department of Defense civilian employees, that is no longer the case. At least two more waves of employees will be converted this year and next. After that, the conversions should slow, because Defense will have to negotiate with unions on employees covered by labor agreements.
Rockville, Md.:"Would it be best for Congress to ignore this issue, because the CSRS folks will be out of government in a few years and the equity issue should fade away at that point?" It isn't an equity issue -- it's a value of sick leave issue. When working, sick leave has a value. Currently, when a FERS employee retires, the value drops to zero. As a result, people "abuse" sick leave near retirement. To prevent that, Congress needs to make the value of sick leave after retirement similar to the value when working. Anything less will lead to "abuse." "Abuse" will be reduced as the value after retirement increases.
I'm willing to bet most FERS employees would stop "abusing" sick leave if each hour of sick leave would convert to half an hour for years in service for pension. If I retire with 1,000 hours of sick leave (roughly half a year), I would get an extra quarter year of service, so I would get an additional 0.25 percent of my salary as pension each year. It's a value which, I believe, is high enough to have me keep my sick leave even though it's only about $400 per year (based on a salary of $150,000). It would take more than 25 years for that to equal the $10,000 it means more to employees.
Stephen Barr: Sick leave is to be taken when you are ill or injured. It is an employer provided benefit for a specific purpose. It is not vacation time or annual leave. Isn't the very definition of sick leave getting lost here?
Washington: Telecoms newsletter TR Daily is reporting that there's a memo from Josh Bolten going around telling regulators not to start new rulemakings after June, and to finish any outstanding ones by November. Is this standard operating procedure during a transition? What will the good folks at the FAA, FDA, FCC, SEC, FEC, etc., do until spring? (Okay, the FEC will be busy...)
Stephen Barr: Don't know anything about that report. Interesting, though. One of my colleagues here at The Post recalls that Bill Clinton urged agencies to push through rules right up to the end.
Vienna, Va.: It seems like every time you write about NSPS or other pay-for-performance systems people come out of the woodwork in your chat to bash on them as a whole. But while debating the individual policies and procedures is a legitimate and worthy task, the fact is that pay-for-performance is the norm in the United States, and that as a whole it has done an admirable job of driving the U.S. economy forward. I guess my question for you, as well as those chatters who have bashed these systems, is this: What specific problems do you see with NSPS that you believe will make it worse at encouraging employees to perform better?
Stephen Barr: A good question. Thanks, Vienna!
Atlanta: Sick leave is really a form of disability insurance. It saddens me to see that near-retirees are focused on using up their "unused" leave instead of simply being content with counting their blessings.
Stephen Barr: Good point, Atlanta. Many personnel officials view sick leave as the equivalent of short-term disability insurance. It does serve that purpose for people who have managed to save their hours, but some new employees can find the going rough if they suffer a big illness or injury.
Washington: I am a federal employee with more than five years of service, and my wife is also a federal employee with more than three years of service. We are newlyweds and we are looking buy a house/condo within the next year. Is borrowing against my TSP as a way of financing our down payment a good idea?
Stephen Barr: It is possible, and some people like the idea. But it is possible that a lender will offer you a good rate. So I think you have to get the various scenarios on the table and compare them. Personally, I prefer to not take such loans from my retirement savings accounts, in part because you never know when a true hardship will pop up that forces you to dip into savings. These are all individual decisions, so best of luck! Happy house hunting!
Rockville, Md.:"Sick leave is to be taken when you are ill or injured. It is an employer-provided benefit for a specific purpose." Ah, but CSRS employees already get a non-ill/injured benefit from sick leave -- namely, additional pension when retired. The government has blurred the line between the specific purpose and general income benefit. Without change, it's one type of benefit to one group of employees and another type of benefit to another.
Stephen Barr: Well said. The line is blurred.
Throat-Clearer Update: I'm the other person with this problem from two weeks ago (I had someone in my area who had been clearing his throat every few minutes since he arrived in September). I'm just writing in to let you know that the issue resolved itself: The person left -- pretty much right after I wrote in! So, I'm giving credit to everyone in this chat who must have been wishing me well, because I don't know how else to explain the coincidence. You cannot imagine what a relief it is not to have the poor guy around anymore.
Stephen Barr: Thanks for that update! Let's wish the chap well in his new workplace!
Once again, we've run out of time today. Thanks for the feedback and the questions. We'll see you back here at noon next Wednesday!
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