Task Force Proposes Eliminating FERS

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By on February 7, 2020 in Human Resources, Pay & Benefits with 0 Comments
Pink piggy bank getting squeezed by a belt wrapped around it

Most readers are probably not aware of the Government, Efficiency, Accountability and Reform Task Force. There is no way of knowing what Congress will do, but this task force has issued a new report entitled 100+ Commonsense Solutions to a Better Government.

In large part, the report urges Congress to make changes that the authors say would create a more efficient government.

Some of the proposed changes would if enacted, directly impact federal employees. Here is a summary of some of the most significant proposals.

Reforming Personnel Policies

The report includes this statement:

Sadly, the behavior of the worst bad actors in the federal government undermines the commitment of our hardworking civil servants. The Task Force commends those federal workers that approach each day as an opportunity to serve the American people but are guided by the age-old truth that a chain is only as strong as its weakest link. With this in mind, the Task Force seeks to advance reforms that ensure that the federal government has the strongest links possible for the sake of ensuring the American people are served by an efficient and accountable government.

Page 50 of 100+ Commonsense Solutions to a Better Government.

The report concludes that the process of hiring new federal employees is a mess. In part, this is based on these observations: “On average, it takes federal agencies three times longer than private entities, to complete the hiring process for a single employee. In 2017, it took an average of 106 days to complete a hire within a federal agency.”

To correct this, the task force cites a pilot program that was successful. This program put hiring managers and subject matter experts at the center of the hiring process.

The Department of Interior and Department of Health and Human Services placed eight subject matter experts in the hiring process for every two human resources staff. Selecting a new hire took an average 37 days in the tested categories. During the pilot, selection took 11 and 16 days respectively.

The task force also recommends maintaining a continuous flow of employees to meet current needs rather than just hiring when a new position is open. All federal agencies should continuously vet current civil servants for vacant roles across government: “Continuous vetting of federal employees would maximize the utility of the federal workforce and would likely be more efficient than passive recruiting efforts including non-targeted job postings.”

Removing Toxic Employees

The new report strongly emphasizes the passage of the Merit Act. The Merit Act would:

  • Streamline the process and shorten the amount of time required to remove underperforming employees.
  • Permit agencies to remove a senior executive for performance reasons, rather than just demoting them.
  • Limit retirement benefits of employees who are removed from their position due to a felony conviction related to their official duties.
  • Authorize agencies to recoup bonuses and awards when performance or conduct issues are discovered.
  • Extend the probationary period for competitive appointments and promotions from one year to two years so that there is adequate time to evaluate a new employee.
  • Curb the ability to use intermediaries to overrule or undermine Merit Systems Protection Board (MSPB) precedent.
  • Uphold critical whistleblower protections.

The report states that the Merit Act would shorten the timeframe necessary to remove a bad employee to 30 days. “On average, it currently takes over 300 days to remove a toxic federal worker” according to the report.

Firing Federal Employees Who Commit Crimes

The task force report states that “Under current law, agencies may indefinitely suspend without pay an individual who committed a serious crime, while their removal is processed.”

Currently, agencies sometimes claim they are required to keep employees in the workforce who are guilty of committing serious crimes as firing them would “equate to wrongful termination.”

Changing Evidentiary Standard for Removal

The government’s personnel policy “should be to provide the best possible value to the American taxpayer, not make Washington bureaucrats even less accountable for their actions.”

Currently, managers seeking to fire an employee must demonstrate with a “preponderance of evidence” to support the removal. The standard should be “substantial evidence” supporting the removal decision.

By creating a new evidentiary standard that appropriately entrusts a manager’s ability to make a judgement pertaining to efficiency while simply requiring reasonable grounds for that judgment, firing practices in the federal government will become more businesslike and less like arduous court proceedings.

Page 55 of Task Force Report

Ban Use of “Official Time” for Union Activity

The task force report states the “concept of ‘official time’ violates basic principles of stewardship to the American taxpayer. As such, it should be explicitly banned and treated as a fireable offense.”

The Report urges passage of the Official Time Reform Act that would place more restrictions on the use of official time by federal employees acting as a union representative.

Merit-Based Compensation for Federal Employees

Currently, the Report notes that “federal employees get a raise for merely not getting fired” through the step increase process that is virtually automatic based on an “acceptable level of competence.”

In addition, in most years federal employees receive an annual pay raise. With a compensation package that has little regard for performance, “employees have little incentive to perform at a higher level that would ultimately benefit the American taxpayer.”

Reform the GS Pay Scale to Attract Higher Performing Employees

The Report cites conclusions of the Congressional Budget Office that federal employees with a high school diploma or less receive pay 34 percent higher than those of their private-sector counterparts, while federal employees with advanced degrees are underpaid by an average of 24 percent.

The natural result of this system is to provide an incentive to less qualified and less competent people to remain as federal employees and driving away the best qualified and best-performing employees.

The Report urges expanding the GS system at both ends to accommodate the highest and lowest paid federal employees and also making greater use of Special Rates.

Reform the Federal Pension System

The Report states that “retirement benefits account for the largest benefit-based expense of the federal government.”

The authors of the Report strongly disagree with the current retirement structure. Federal employees also receive benefits worth about 14% percent of their salaries. The average retirement benefit for private-sector employees is 3%. The federal pension system also requires a very low rate of error based upon many assumptions to be correctly implemented.

The task force urges getting rid of the FERS system for future federal employees and offering an enhanced TSP-only system. This would raise the base federal TSP contribution as the current cap on federal government’s matching contribution. This approach would create savings for the taxpayer, and also provide “greater certainty to future contributors” according to the task force.

Restructure the Federal Employee Health Benefits System

Currently, the government pays about 70% of the cost of health insurance for federal employees. This remains the same whether the employee chooses an expensive health plan or a less expensive plan.

The task force recommends a different system. Under the proposed system, the federal government would offer a standard, flat federal contribution toward purchasing health insurance. Each employee would be responsible for paying the rest.

The purpose of this option would be to encourage employees to purchase plans with the amount of coverage they need and would save the government a significant amount of money each year.

Summary

The recommendation of the Government, Efficiency, Accountability and Reform Task Force would require Congressional action. That is unlikely to happen with one party controlling the House and another the Senate. Political divisions between the parties generally lead to a lack of action in Congress.

Democrats in the House are unlikely to support most (or any) of these proposed changes. It is also very unlikely all of the proposals would be passed in the Senate.

In the absence of a general agreement between the parties to take action on the structure of the federal civil service system, little change will be forthcoming. That could, of course, change after any national election and with a renewed drive to enact “good government” legislation.

At the moment, an action along those lines is unlikely.

© 2020 Ralph R. Smith. All rights reserved. This article may not be reproduced without express written consent from Ralph R. Smith.

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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

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