Federal Managers Association

More information on the Council’s activities may be found at: www.lmrcouncil.gov and on FMA’s Web site at: www.fedmanagers.org.

FMA UNVEILS NSPS TRANSITION PAPER

Responding to a plethora of concerns regarding the looming transition of Defense Department (DOD) civil servants out of the National Security Personnel System (NSPS), the Federal Managers Association (FMA) unveiled a position paper outlining several recommendations the NSPS Transition Office should consider to protect all civil servants during the conversion process. Chief among the Association’s concerns is the potential impact facing DOD’s top-performers, those employees that excelled under NSPS, who will be subject to a cap on pay due to current rules on pay retention when they return to the General Schedule (GS).

While the 2010 National Defense Authorization Act (P.L. 111-84), which ended of the controversial pay-for-performance system, specifically states that no employee shall lose pay as a result of the transition, NSPS Transition Office Director John James, Jr. said employees whose salaries exceed Step 10 of their GS level will receive retained pay. This policy enables employees to maintain their core salaries, but restricts future earnings by affording these individuals only half of the annual pay raise until the GS system “catches up” with them.

“Employees affected the greatest are those who time and time again carried out their assignments at an exceptional level and were correspondingly recognized by their supervisors,” commented FMA National President Darryl Perkinson. “Placing a cap on their pay sends a clear message that these civil servants operate in a system that fails to recognize and reward performance.”

In a subject directly related to the impact of pay retention on top-performers, FMA urged Pentagon officials to devote significant time to the reevaluation of job classifications. Some employees currently serving under NSPS hold positions that do not directly correlate to those under the GS or other systems. If a significant percentage of employees adversely affected by the pay cap hold similar positions, the Association’s position paper argued, “the Pentagon should consider modifying their classification to more accurately align managers’ and supervisors’ job descriptions with the duties they perform on a routine basis.” Any action to address this issue requires an accurate calculation of the number and type of employees to adequately asses the dilemma, the paper continued.

Additionally, with an aggressive conversion schedule planned by the NSPS Transition Office, FMA supported a process that converts employees who were most recently transitioned into NSPS first so as to enable DOD officials maximum time to convert those who have served under NSPS the longest and may face the greatest difficulties changing systems. With James calling for the majority of NSPS participants to transition out of the system by September 30, 2010, over a year ahead of the schedule mandated by P.L. 111-84, it is critical DOD organize the process in a manner that ensures essential details are not overlooked.

FMA’s NSPS transition paper, which is subject to modification as the process moves forward, may be found at: www.fedmanagers.org.

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WHAT’S HAPPENING ON CAPITOL HILL?

LAWMAKERS APPALLED BY AMBIGUITY IN FEHBP DRUG PRICING

Lawmakers continued to challenge the role played by Pharmacy Benefit Managers (PBMs) during a February 23 hearing focusing on legislation that would restructure the relationship between PBMs and health care providers under the Federal Employees Health Benefits Program (FEHBP). In their primary role as prescription drug price negotiators, PBMs carry significant influence over the government’s total FEHBP expenditure. A lack of oversight and a failure to enforce accountability have created a system where FEHBP participants, and by extension American taxpayers, are at the mercy of contractual arrangements for prescription drugs that fail to secure maximum benefit at the best price, members of the House Oversight and Government Reform Subcommittee on the Federal Workforce, Postal Service, and the District of Columbia argued.

Subcommittee Chairman Stephen Lynch’s FEHBP Prescription Drug Integrity, Transparency, and Cost Savings Act (H.R. 4489) seeks to elucidate the process of establishing prescription drug pricing while restructuring how the Office of Personnel Management (OPM) administers the federal government’s health care plan. The Chairman said he was “baffled” by the government’s inability to leverage the power of the nine million FEHBP participants to lower the price of prescription drugs. Lynch challenged OPM Senior Advisor to the Director John O’Brien and OPM Inspector General Patrick McFarland, both providing testimony before the Subcommittee, to lead reform efforts that could realize billions of dollars in potential savings.

“In this day and age, when every effort is being made to reduce federal spending and to find money to fund healthcare reform and other domestic policy priorities, the level of ambiguity around costs and drug prices under the FEHBP is appalling and must change,” stated Lynch.

O’Brien cautioned that legislating pricing and contractual stipulations PBMs and FEHBP insurance providers must adhere to, as H.R. 4489 intends, restricts the inherent flexibility built into the FEHBP to allow the program to adapt to changing industry practices. While acknowledging that further efforts are required to provide greater pricing transparency, O’Brien asserted that initiatives currently underway at OPM independent of the proposed bill are moving in the right direction. Expressing disappointment in OPM’s testimony, Chairman Lynch nonetheless said he looks forward to working with the agency to ensure FEHBP participants receive the level of service they deserve.

Jasmin Weaver, Healthcare Initiatives Legislative Director for Change to Win, a partnership of five unions, provided perhaps the starkest evidence that the current PBM-insurance provider relationship fails to adequately serve FEHBP participants. According to a recently released Change to Win report documenting prescription drug prices negotiated by Caremark, which manages 80 percent of all pharmacy benefits under the FEHBP, a person with no insurance who signs up for the CVS Caremark generic discount program can purchase 85 percent of the offered generic prescription drugs at a price lower than that available to the federal government.

“Our report suggests that if CVS Caremark charged the [FEHBP] and plan participants the same price it offers to members of its discount program for just three commonly prescribed drugs, federal employees and the government could save tens of millions of dollars every year,” claimed Weaver. “And if CVS Caremark offered its lowest price for generic drugs to the government for all the drugs that are part of its discount program, federal employees and the government could save hundreds of millions of dollars.”

For more information on the hearing, please visit: http://oversight.house.gov.

SENATE REJECTS $250 PAYMENT FOR SENIORS

The Senate rejected a proposal by Senator Bernard Sanders (I-Vt.) on March 4 that would have provided roughly 55 million senior citizens, veterans and people with disabilities a one-time $250 payment to combat the lack of an automatic Social Security cost of living adjustment (COLA) in 2010. The payment would have also applied to retired civil servants who never paid into Social Security.

Despite the support of President Obama and Social Security Administration Commissioner Michael Astrue, the proposal failed to secure the necessary votes to consider the payment “emergency spending,” which would have allowed the Senate to approve the measure without offsetting its $12.7 billion price tag. The legislation was designed to compliment a similar $250 payment received by Social Security recipients as part of the American Recovery and Reinvestment Act (P.L. 111-5).

"In the midst of a major recession, with health care and prescription drug costs rising rapidly, we cannot forget about the millions of seniors and disabled veterans who are struggling hard to keep their heads above water," said Sen. Sanders.

With no Social Security COLA for the first time since 1975, Obama pushed Congress this past fall to approve the payment.

"Even as we seek to bring about recovery, we must act on behalf of those hardest hit by this recession,” said Obama. “That is why I am announcing my support for an additional $250 in emergency recovery assistance to seniors, veterans, and people with disabilities to help them make it through these difficult times. These payments will provide aid to more than 50 million people in the coming year, relief that will not only make a difference for them, but for our economy as a whole, complementing the tax cuts we’ve provided working families and small businesses through the Recovery Act.”

Sen. Sanders said he will continue to fight for the $250 payment despite the recent setback. Sanders must receive the support of eleven additional colleagues for the measure to gain approval.

"It is extremely unfair that at a time when this Congress bailed out Wall Street...to say ‘well, we're sorry we can't afford to take care of some of the most vulnerable people in our society,'" the Senator told Vermont Public Radio.

For more information on the measure, please visit: http://sanders.senate.gov.

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WHAT’S NEW IN THE EXECUTIVE BRANCH?

IMPLEMENTATION OF TSP ADJUSTMENTS ON TRACK

The Family Smoking Prevention and Tobacco Control Act, P.L. 111-31, included language restructuring several key components of the Thrift Savings Plan (TSP) to enhance delivery of service to federal employees and retirees participating in the government’s retirement savings and investment program. The Federal Retirement Thrift Investment Board, charged with overseeing the TSP, provided an update in a February memo detailing the Board’s progress towards implementation of the modifications to the program included under the new law.

Newly hired federal employees will be automatically enrolled in the TSP per the law in August at a default contribution rate of three percent, and the government securities fund (G Fund) will serve as the default for new enrollees. These individuals will have 90 days from their first contribution to request a refund of the payment and adjust their contribution level or withdraw from the program. The Board also announced that implementation of spousal beneficiary accounts, which allow surviving spouses of participants to retain an inherited account, is targeted for December 2010. The new benefit will also provide separated participants various options for the withdrawal of account balances.

The Board is on pace to complete establishment of a Roth IRA option, which taxes the contributions of participants when they are first made, by the first payroll period in January of 2012. The Roth option will insulate individuals from future tax increases, as opposed to the current system which taxes participants’ accounts upon withdrawal, and is expected to be popular with participants. Implementation of the Roth option is a timely endeavor, according to the memo, as execution requires “changes to virtually every system with the TSP.”

Agencies are currently providing automatic contributions per the law, the Board confirmed, as Federal Employees Retirement System hires no longer have to wait six to twelve moths before receiving these contributions. Many of the provisions detailed above were included in P.L. 111-31 at the request of the Employee Thrift Advisory Council (ETAC), which consists of several labor unions and federal employee groups including the Federal Managers Association. ETAC convenes on a regular basis to provide the Board with recommendations to improve the delivery of services provided by the TSP.

For more information on the TSP and the Federal Retirement Thrift Investment Board, please visit: www.tsp.gov.

SSA DRIVES DISABILITY BACKLOG TO LOWEST LEVEL IN FIVE YEARS

The Social Security Administration’s (SSA) Office of Disability Adjudication and Review (ODAR) has successfully driven down the backlog of pending disability case hearings to the lowest levels since 2005, SSA Commissioner Michael Astrue announced in a March 2 press release. In a little over a year, the agency reduced the number of pending hearings to 697,437 cases, a decrease of roughly 71,000 cases since December 2008.

ODAR also reduced the average hearing decision processing time by 72 days over the same period after the agency reached a high of 514 days at the conclusion of fiscal year 2008. Astrue credited the hiring of an additional 147 Administrative Law Judges (ALJs) and over 1,000 support staff during FY09 with helping the agency achieve its success. Plans to further expand SSA’s capability to process claims include the hiring of another 226 ALJs over the course of the year, according to the agency.

“We have decreased the number of hearings pending by almost 10 percent over the last 14 months and cut the time it takes to make a decision by nearly two and a half months.  This remarkable progress shows our backlog reduction plan is working,” said Astrue. “With ongoing support from the President and Congress as well as the efforts of our hardworking employees, I am confident the hearings backlog will continue to diminish.”

Four National Hearing Centers outfitted with video conference equipment enabling ODAR employees operating in the economically hardest hit regions across the country to process claims remotely have streamlined operations significantly. The agency is also looking to expand its presence through the addition of fourteen new hearing offices and three satellite offices by the close of 2010.

As previously detailed in the Washington Report, the President’s FY11 budget proposal would provide SSA with $12.38 billion for the agency’s administrative expenses in 2011, a nearly $933 million boost over enacted funding for 2010. Astrue praised the proposed funding level in a formal statement following the budget’s release, calling the $12.38 billion critical in efforts to continue ODAR’s success in combating the backlog of disability claims while allowing the agency to prepare for the influx of new claims anticipated in light of unemployment rates that are expected to remain high through 2011. The Federal Managers Association remains committed to supporting the President’s budget in the appropriations process.

For more information on SSA’s recent success and plans for the future, please visit: www.ssa.gov.

OPM DISTRIBUTES REDESIGNED FEDERAL EMPLOYEE SURVEY

The Office of Personnel Management (OPM) announced the agency is in the process of distributing its 2010 Federal Employee Viewpoint Survey, a tool the government will use to gauge the success of federal agencies. A new and improved version of the former Federal Human Capital Survey, the Viewpoint Survey will target over 500,000 civil servants to record their take on agency performance.

"In these times of unprecedented change, it is more important than ever to maintain a focus on the Federal Government's most valuable asset - its employees," said OPM Director John Berry. "Every Federal employee plays a role in fulfilling the mission of each Federal agency or department. More than ever, their work is critical to the well-being and security of our Nation."

The survey presents participants with a series of questions designed to provide senior leaders, Chief Human Capital Officers and agency managers with information relating to human resources management in order to “make the Federal workplace a model one,” according to a news release announcing distribution of the survey. Responses to the survey will remain confidential, and OPM anticipates widespread participation will enable agencies to address a range of issues impacting federal operations.

Among the changes to previous versions of the survey is the addition of a work/life issues section, soliciting employees’ perceptions of the balance they enjoy in their current positions. Focus will also be directed towards measuring employee engagement, a metric which has received increased attention as of late in the federal human resources arena.

"The Administration has set a course to make the Federal Government America's model employer for the 21st Century," Berry continued. "With the cooperation of those taking the survey, we will be better able to gauge what is and isn't working to create a workplace that attracts the best and brightest."

For more information, please visit: www.opm.gov.

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GET INVOLVED AT THESE EVENTS!

REGISTRATION STILL AVAILABLE FMA’s 72nd NATIONAL CONVENTION

Registration is still available for the Federal Managers Association’s 72nd annual National Convention and Management Training Seminar. Held March 14-17, 2010, in Arlington, Virginia, the Convention will feature a mix of association business, management training and FMA’s annual lobbying day, Day on the Hill. Office of Personnel Management Director John Berry will kick off the training day, which will feature four panels of experts covering topics from the recent changes to the federal government’s Thrift Savings Plan to strategies to enhance operations in the workplace.

For more information or to register, please visit: http://www.fedmanagers.org/public/events.cfm.

TELEWORK SPRING TOWN HALL MEETING – FREE TO FEDS
April 8, 2010
Ronald Reagan Building and International Trade Center, Washington, D.C.

The Telework Exchange will host its Spring Town Hall Meeting on Thursday, April 8, 2010. The meeting will focus on how telework fits into the bigger picture for federal government and how to move the participation needle beyond 10 percent. Consisting of two tracks, the event program will explore telework policies, performance, management, and technology. Join agency executives, program managers, telework coordinators, industry partners, and affiliated organizations – all working collectively to achieve demonstrable progress in this area.

To register or for more information, visit: https://www.teleworkexchange.com/townhallmeeting/2010-spring-attendee-reg.asp

DEFENSE FINANCE 2010
March 25-26, 2010
Hilton Alexandria Mark Center, Alexandria, VA

Defense Finance has become the meeting place for Department of Defense financial experts to present updates, share lessons learned and test new ideas for improving and transforming defense finance business operations in support of the war fighter. As you continue the struggle to successfully transform your financial operations, the annual Defense Finance conference is a trusted resource you can depend on to arm you with the tools you need to achieve your goals. Register now and receive a $200 discount with booking code 10479XQ99CL.

For more information, please visit: http://www.wbresearch.com/defensefinanceusa/.

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Long Term Care Partners, LLC , FMA Corporate Partner. Long Term Care Partners is the administrator of the Federal Long Term Care Insurance Program. Sponsored by the U.S. Office of Personnel Management, the Program is available to Federal and U.S. Postal Service employees and annuitants, active and retired members of the uniformed services, and their qualified relatives. With more than 210,000 enrollees, it is the largest employer-sponsored long term care insurance program in the country. FLTCIP policies are simple to understand and offer enrollees some distinct advantages, including comprehensive coverage, competitive and stable rates, international coverage, and administrative service standards that are the highest in the long-term care insurance industry. Policies are sold direct through a highly-trained, non-commissioned staff with no high pressure sales tactics – simply sound advice. Visit www.LTCFEDS.com or http://www.opm.gov/insure/ltc/index.asp for more information.

FSAFEDS, the Federal Flexible Spending Account Program, FMA Corporate Partner. FSAFEDS provides consumers and corporations a single source of health management decision guidance through its integrated suite of consumer-driven healthcare solutions. Its innovative consumer experience offers comprehensive care, planning, spending, productivity and strategic management services that help guide participants to be healthier and more productive. Visit www.fsafeds.com for more information.

Blue Cross and Blue Shield Association Federal Employee Program, FMA Corporate Partner. The Blue Cross and Blue Shield Association represents the independent, locally operated Blue Cross and Blue Shield plans. The 40 local member companies of the Blue Cross and Blue Shield Association have provided millions of families with top-quality, affordable health insurance for more than 70 years. For the one in four Americans who carry Blue Cross and Blue Shield cards, the Blue Plans symbolize health security. Visit www.fepblue.org and join the best, most-recognized group of health insurance providers in the world.

GEICO, FMA Corporate Partner. GEICO was created over 60 years ago to insure Federal employees. Over the years GEICO has continuously strengthened its affiliation with the Federal workforce. GEICO’s Federal program supports the GEICO Public Service Awards, which have honored federal workers (active and retired) who have contributed to the public good since 1980. Find out how much you could save with GEICO auto insurance as an FMA member by getting a quick, line-by-line rate quote at http://www.geico.com/landingpage/go51.htm?logo=00781. When you request a quote, GEICO will make a contribution to support the work of FMA.

Shaw, Bransford and Roth, P.C. SBR concentrates its law practice on the representation of Federal employees, with a special emphasis on the representation of executives and managers. SBR serves as General Counsel to the Federal Managers Association and is uniquely situated to recognize the interests and viewpoints of Federal managers. For up to two free half-hour legal consultations and reduced legal fees as an FMA member, please visit: www.shawbransford.com.

FEDS (Federal Employee Defense Services) provides premier professional liability insurance benefits to the federal employee community. The FEDS liability insurance policy costs only $270 a year, and if you are a manager, supervisor, or law enforcement officer, your agency will reimburse you up to ½ of the cost. Your net cost would be $135 per year. FEDS provides federal employees with the protection they need to do their jobs. You simply can’t afford not to have it! SPECIAL OFFER: Three months free when you make the switch from another federal employee professional liability program. To learn more, visit: http://www.fedsprotection.com. Be sure to note your FMA membership when you join FEDS.

The Federal Managers Association and Management Concepts have teamed up to present the Federal Managers Practicum — a targeted certificate program for Federal managers. As the official development program for FMA, the Federal Managers Practicum helps FMA members develop critical skills to meet new workplace demands and deepen their managerial capabilities. Also, FMA members receive 20% off any book purchase and each book is guaranteed to win you a promotion! For more Practicum information, click here. For a catalog of discounted publications, go to Management Concepts. To order, call Vanessa Gillette at 703-270-4107.

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The Washington Report is published biweekly by the Federal Managers Association.
Jessica Klement, Editor; Karl Gruss, Staff Writer

The Federal Managers Association, established in 1913, is the oldest, largest, most influential association representing the interests of the 200,000 managers, supervisors and executives serving in today’s Federal government.

1641 Prince Street ~ Alexandria VA 22314-2818 ~ (703) 683-8700 ~ FAX (703) 683-8707 ~ E-Mail Info@fedmanagers.org

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