The January 2000 white-collar civilian federal pay raise will be:
1) 4.4 percent.
2) 4.8 percent.
3) 3.8 percent.
4) None of the above.
Actually, that's a trick question, although it isn't intentional.
The official amount, for the moment, is 3.8 percent. That's a surprise to folks who track federal pay for fun or profit.
The amount is expected to go up. It will either be an "average" 4.4 percent, as proposed by President Clinton, or as much as 4.8 percent if Congress gives federal workers the same raise it is proposing for uniformed military personnel. But the exact amount could vary from city to city.
Normally by this time of year, federal workers know roughly--or precisely--what they will be getting in January. But not this year.
Because the president didn't submit an "alternative" plan by the Aug. 30 deadline, the across-the-board federal pay raise for 2000 becomes 3.8 percent. That figure is based on data from the Employment Cost Index, which measures the cost of labor (primarily pay raises) in the private sector. Under the pay law, which provides for both a national and locality adjustment, the White House still must decide how geographic differentials will be divided up. That means the "average" overall raise will be 4.4 percent (or perhaps 4.8 percent), with federal employees in some cities getting more, and others less.
Federal pay watching is a group sport. The raise is of interest to ex-wives getting alimony and children of federal workers whose support payments are indexed to raises. Merchants live for federal raises.
In a town like Washington, trade associations, unions, foreign embassies and other organizations based here often give their workers raises that match federal pay increases.
For federal workers, any increase translates into bigger pensions down the line. It also boosts the value of life insurance and of unused annual leave they can cash in at retirement. Federal workers planning to buy a house, or refinance a mortgage, need pay raise data for lenders. The ripple effect of any federal pay raise extends throughout the area. The amount is important news.
The good news is that the raise is set. It will be effective in January.
Workers who wait until Dec. 31 to retire will get lump-sum annual leave payments in January. Those payments will be at the higher 2000 rates, even though employees retired on Dec. 31.
Everything that can be known about the 2000 raise--when, where and who--is known.
Except, of course, how much?
Pension Plan Costs Several readers complained that Tuesday's Federal Diary--about the cost of the two federal pension plans--skipped the impact of Social Security and government contributions to the 401(k) plan accounts of workers under the Federal Employees Retirement System.
The column said that FERS costs the government slightly more than the Civil Service Retirement System (17.9 percent of payroll vs. 17.2 percent), and much more if matching contributions to the thrift savings plan are considered. It also addressed the issue of matching government contributions to Social Security and to the thrift savings plan. It said:
"According to OPM and the Congressional Research Service, the CSRS program costs 24.2 percent of payroll. Employees contribute 7 percent, with the government contributing the remaining 17.2 percent.
"The cost of FERS is 11.5 percent of payroll for basic pension benefits. The government contributes 10.7 percent of that. FERS employees also contribute 6.2 percent to Social Security, and that is matched by the government."
That's where the CSRS cost to government is estimated at 17.2 percent vs. the 17.9 percent estimate (government pension costs plus Social Security contributions) for FERS. It continued:
"All FERS employees get an automatic 1 percent match (from the government) to their thrift accounts, and up to 5 percent if they contribute 5 percent themselves. The bottom line, according to the Congressional Research Service and OPM data, is that the FERS programs cost the government at least 17.9 percent--and much more if employees get the full 5 percent government match to the Thrift Savings Plan, as most do."
The point is that workers shouldn't react to rumors--that CSRS is going to be abolished because of its cost--because CSRS costs government and the taxpayers less than the FERS program that replaced it.
Mike Causey's e-mail address is firstname.lastname@example.org