Congressional Movement on Federal Benefits

A number of readers have been asking about the status of bills that would change the federal benefits program. A new conference report has rolled several of these proposed benefits changes into one bill. Here is a summary of the these changes in the conference report.

We have received numerous queries from readers recently asking about the status of legislation that would provide new benefits or modify existing benefits for federal employees.

In at least some cases, the person who inquired was apparently delaying a decision on retirement in hopes of obtaining a greater financial benefit by delaying retirement based on potential action by Congress.

In general, predicting what will happen to a particular bill during the legislative process is a fool’s game. Too many things can happen that make a prediction on most topics meaningless. We have previously advised readers to make their retirement decisions based on current benefits; delaying your retirement for a year or more waiting or hoping that Congress will change your benefits package may be a good excuse if you really don’t want to retire right away but, if you are serious about retirement, you should ask yourself if the potential gain is worth losing a year (or more) out of your retirement years for the possibility of a financial gain in the future.

Having said that, there is legislative action on several human resources topics of interest to readers. Please note that these items have not been finalized. However, a big step has been taken on these issues that could lead to changes in your benefits package.

A press release outlining the results of a conference on the Defense Authorization Bill has been released. Please note also that even if these items do pass in Congress, in at least some cases the actual implementation may be delayed while implementing regulations are written to interpret and apply the benefit changes.

Here is a summary of the changes most likely to be of interest to a wide range of our readers. Most of these are human resources topics that will impact a number of federal employees:

  • Repeals the authority for the National Security Personnel System (NSPS) and requires the transition of NSPS employees to previously existing civilian personnel systems, while providing DOD with new personnel flexibilities – in the areas of hiring and assigning personnel and appraising employee performance.
  • Phases in the allowance of unused sick leave to be applied toward length of service for purposes of computing a retirement annuity under the Federal Employee Retirement System. (See FERS, Sick Leave and Your Future Retirement)
  • Prohibits the release of detainees from Guantanamo Bay to the United States, its territories, or possessions for the period beginning on October 1, 2009 and ending on December 31, 2010.
  • Allows former federal employees who receive a federal annuity from other than the Civil Retirement and Disability Fund to retain their annuity if reemployed by DOD.
  • Authorizes federal agencies to reemploy retired federal employees under certain limited conditions, without offset of an employees’ annuity against their salary, and requires the Comptroller General to report on the use of this authority.
  • Phases out cost of living allowances for federal employees working in Hawaii, Alaska, and other non-foreign U.S. territories, and would phase in locality comparability pay in place of the allowances. (See FERS Sick Leave Credit and Locality Pay for Some Federal Employees Passes in House)
  • Allows former federal employees under the Federal Employee Retirement System who withdrew their contributions to the retirement trust fund, thereby waiving retirement credit for those years of service, to redeposit their earlier contributions, plus interest, upon reemployment with the federal government.
  • Allows employees under the Civil Service Retirement System to take their highest salary, including their deemed full-time salary for years of part-time work, to be used in computing benefits derived from a pre-1986 salary.

With the conference report containing these provisions, there is a good chance that these provisions will become law. If and when that occurs, we will provide a summary of the changes.

About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters on federal human resources. Follow Ralph on Twitter: @RalphSmith47