FMA Legislative Accomplishments

Winter 2010

As a member of the oldest and largest association representing federal managers, one of the most important benefits you receive is advocacy. The Federal Managers Association (FMA) strives to bring issues that are important to you, and to the enhancement of public service, to the forefront of Congress and the Administration. At the start of the second session of the 111 th Congress, the following are FMA’s recent major accomplishments.

FMA Priorities on Capitol Hill

BILL CREDITING FERS EMPLOYEES FOR UNUSED SICK LEAVE SIGNED INTO LAW

Legislation signed into law by the President on October 28, 2009 as part of the Fiscal Year 2010 National Defense Authorization Act (P.L. 111-84) affords employees under the Federal Employees Retirement System (FERS) a credit for unused sick leave at the time of retirement, a benefit currently enjoyed by members of the Civil Service Retirement System (CSRS). According to the new law, those who retire before January 1, 2014 will receive fifty percent of their unused sick leave credited towards their annuity. After the four year phase-in, FERS employees will receive full credit for unused sick leave, on par with the benefit afforded to CSRS employees. The new credit took effect upon the bill becoming law on October 28

For years, FMA members throughout the country expressed their concerns over the negative impact on office productivity caused by FERS employees’ use of exorbitant amounts of sick leave as they neared retirement, aligning with the facts presented in the CRS report. With the cost of sick leave taking its toll on managers’ ability to effectively supervise their workforce, FMA set about crafting a legislative proposal to address the challenges posed by the lack of an incentive to conserve leave.

FMA worked hand in hand with Congressman James Moran (D-Va.) and his staff in early 2008 to develop language which would credit FERS employees for unused sick leave. When legislation to this effect was included in the House-passed version of the Defense Authorization Act, FMA aggressively lobbied Members of Congress to include the measure in the bill’s final conference report, ultimately proving successful in this endeavor.

The sick leave credit will be instrumental in enhancing federal managers’ ability to effectively supervise their employees and achieve agency missions, as managers will no longer have to grapple with the challenges posed by FERS employees who use disproportionately more sick leave towards the end of their careers.

PRESIDENT SIGNS LEGISLATION EXTENDING LOCALITY PAY

Since 1948, federal employees who reside in Alaska, Hawaii, and the U.S. Territories have received a tax-free non-foreign area cost of living adjustment (COLA) in their pay. However, the federal government failed to credit this COLA towards basic pay for retirement purposes, and these federal employees were excluded from receiving locality pay benefits established under the Federal Employees Pay Comparability Act of 1990 (P.L. 101-509). This practice had a devastating effect on the retirement benefits rightly earned by these hardworking civil servants.

As part of the FY10 National Defense Authorization Act (P.L. 111-84), the President approved legislation which will phase-out the COLA and phase-in locality pay in the non-foreign areas over a three year period combined with an annuity buy-in aimed at stabilizing the current retirement eligible workforce. The measure also provides for a 35 percent offset to COLA to protect the pay of all federal employees as they transition from COLA to locality pay.

FMA members in Hawaii worked with the Association’s National Office staff to develop legislation that would set this transition in motion. The measure approved in the Defense Authorization Act, introduced by Senator Daniel Akaka (D-Haw.) as the Non-Foreign Area Retirement Equity Assurance Act, closely mirrored FMA’s original proposal.

The new law will help advance the federal government’s status as an employer of choice by enabling agencies in Hawaii, Alaska and the Territories to compete with the private sector and high locality areas on the mainland. Managers and supervisors in these locales are now equipped with a powerful tool to recruit and retain the best and the brightest.

REEMPLOYED ANNUITANTS LEGISLATION SIGNED BY PRESIDENT

President Obama signed into law legislation introduced by Senator Susan Collins (R-Me.) and attached to the FY10 National Defense Authorization Act (P.L. 111-84) which will allow federal agencies to reemploy retired civil servants on a limited basis without forcing these employees to take reductions in salary corresponding to their retirement annuities. The Federal Managers Association fought for this legislation as a means to stem the loss of institutional knowledge through the impending wave of retirement facing the federal workforce.

Federal employees seeking a return to service following retirement were previously penalized in the form of a pay reduction to offset their federal retirement annuity. Under the new law, reemployment will be limited to 520 hours in the first six months following retirement, and 1,040 hours in any 12 month period without a reduction in compensation. Reemployed annuitants will be able to contribute a total of 3,120 hours of service before any offset to annuity occurs. While the individuals will receive both salary and annuity payments, they will not be considered employees for the purposes of retirement and will receive no additional retirement benefits based on their service.

The law contains further restrictions to ensure reemployed annuitants would not monopolize the workforce. Mandating agencies fill no more than 2.5 percent of their workforce with these individuals, the provision also requires any agency exhibiting a workforce consisting of over one percent reemployed annuitants to file a report to Congress and the Office of Personnel Management detailing the need for the additional waivers.

FMA SUCCESSFUL IN FIGHT TO SECURE SSA FUNDING FOR 2010

The Social Security Administration’s (SSA) Office of Disability Adjudication and Review (ODAR) currently faces a backlog of 718,000 pending hearing requests, a daunting number which impedes the agency’s ability to deliver needed services to the American public. Ensuring that SSA has the funds to meet the American people’s needs remains a top priority for FMA, particularly as the agency faces a flood of disability claims as a result of the economic downturn facing the nation.

Due to the lobbying efforts of FMA and others vested in SSA’s success, the agency reduced the number of hearing requests by 38,000 cases at the close of fiscal year 2009, marking the first time in a decade the agency has successfully driven down the hearings backlog. The agency also reduced the average processing time required by each case, improving from 514 days to 491 days during the same time period. The agency could not have achieved this success without FMA’s and others’ efforts to secure adequate funding for FY09.

The Association aggressively lobbied Congress to secure the President’s requested funding figure of $11.4 billion for ODAR’s administrative expenses in the Fiscal Year 2010 Labor, Health and Human Services and Education Appropriations Act, H.R. 3293, to ensure the continued success enjoyed by the agency. FMA delivered several letters to Congress urging approval of the President’s request, which SSA Commissioner Michael Astrue has said is necessary to combat the backlog. The Association also presented testimony before Congress in March requesting greater financial support in order to equip SSA with the necessary tools to attack the backlog.

On July 24, the House passed the President’s budget request for SSA’s Limitation on Administrative Expenses (LAE), a ten percent increase over FY09 funding. The Senate Appropriations Committee approved the same figure, but the bill stalled while awaiting consideration by the full Senate. Congress ultimately included the President’s funding request, however, in the $446.8 billion 2010 omnibus appropriations bill, which the President signed into law on December 16 (P.L. 111-117).

CHANGES TO THRIFT SAVINGS PLAN BENEFITS ENROLLEES

FMA is a member of the Employee Thrift Advisory Council (ETAC), a collection of federal employee groups vested in the success of the Thrift Savings Plan (TSP). ETAC meets with the TSP Board throughout the year to recommend changes to the TSP that assist federal employees. FMA, as a member of the ETAC, was instrumental in helping craft several changes during the spring of 2009 benefitting civil servants enrolled in the TSP.

The President signed legislation in June which includes language instituting several adjustments to the TSP. As part of the Family Smoking Prevention and Tobacco Control Act, P.L. 111-31, newly hired federal employees will be automatically enrolled in the TSP, diverging from past practices where individual employees were required to opt into the plan. The default contribution rate will be set at three percent, but the TSP Board reserves the right to adjust this figure between two and five percent. The government securities fund (G Fund) will serve as the default for new automatic enrollees. Following enrollment, employees will be able to adjust their contribution levels and direct investments to the various other available funds. Employees can also opt out of the TSP completely.

Another provision calls for the creation of a Roth IRA option, which taxes the contributions of participants when they are first made, insulating individuals from future tax increases. Under the current system, participants’ accounts are taxed upon withdrawal, and establishment of the Roth option, which may take one to two years, is expected to be popular among those enrolled in the TSP. Surviving spouses of participants will also be able to retain an inherited account under the new law.

Advocacy Before Congress

FMA DISCUSSES STRATEGIES FOR COMBATING SSA BACKLOG

Federal Managers Association Chapter 275 Immediate Past President James Fell presented testimony on the Association’s behalf during a joint hearing in March to discuss strategies to eliminate the current disability hearing backlog impeding the Social Security Administration’s (SSA) delivery of needed services to the American public. Presented before the House Ways and Means Subcommittees on Social Security and Income Security and Family Support, Fell’s testimony offered insight into the challenges facing SSA’s Office of Disability Adjudication and Review (ODAR) and the steps Congress should take to ensure the agency affords taxpayers the level of service they expect and deserve. As a current ODAR supervisor, Fell offered a unique perspective on the situation.

After years of underfunding, ODAR is close to receiving the President’s budget request of $11.4 billion for administrative expenses, a ten percent increase over FY09. FMA is pleased to have worked with other stakeholders in achieving this figure. FMA has testified three times before the Ways and Means subcommittees and has submitted an additional four statements for the record to both the House and the Senate on the matter over the past few years.

FMA HIGHLIGHTS CHALLENGES FACING DEFENSE PAY SYSTEM

Federal Managers Association National President Darryl Perkinson provided testimony before the House Armed Services Readiness Subcommittee on April 1 to elucidate many of the challenges currently facing federal managers engaged in the National Security Personnel System (NSPS), the Pentagon’s divisive pay-for-performance program. During the hearing, Perkinson made several recommendations to correct deficiencies present in the program impeding managers’ ability to operate effectively.

As a current Department of Defense (DOD) employee, Perkinson provided a unique outlook on the system. He detailed his own experiences and discussed how many FMAmembers expressed their desire to dispel with the system entirely based on inequities in the system. He continued by urging the Subcommittee to work with NSPS officials and federal employee groups to determine how best to implement personnel reforms in a manner that affords those charged with its execution the tools to succeed. Perkinson also laid out several recommendations should DOD employees return to the General Schedule.

As part of the FY10 National Defense Authorization Act (P.L. 111-84), the President ordered Secretary of Defense Robert Gates to begin moving employees enrolled in NSPS back into their previous personnel systems within six months, with final termination of NSPS slated for January 1, 2012. Gates could propose an alternative personnel system to replace the program and prevent moving DOD employees to their previous systems, but the law provides only six months to craft such a proposal, and final approval would rest on Congress.

FMA is now focused on ensuring employees’ pay is not negatively affected during the transition. Although the law explicitly states employees will not suffer any loss of pay resulting from the conversion out of NSPS, the Association is fighting to ensure employees who received large raises under the system through exceptional performance do not face a pay freeze if placed back at the top of their GS grade.

FMA TESTIMONY PROVIDES SUGGESTIONS TO IMPROVE CIVIL SERVICE

Federal Managers Association Chapter 167 President Patricia Niehaus presented testimony on April 22 before the House Oversight and Government Reform Subcommittee on the Federal Workforce, Postal Service and the District of Columbia, outlining several of the Association’s suggestions for improving the civil service during this challenging work environment.

In her testimony, Niehaus covered several areas of concern FMA has placed on the forefront of its agenda, including the need for mandatory managerial training, greater use of recruitment and retention tools such as student loan repayment and an end to the proliferation of multiple personnel systems, particularly in regard to pay-for-performance. Significant attention must be directed towards streamlining the federal hiring process as well, Niehaus recommended, in order to equip agencies with the necessary talent to advance their missions in the face of rising workloads.

For more information on FMA’s advocacy efforts or to view copies of FMA testimony, please visit: www.fedmanagers.org.