Today we packed a lot into an hour for this week’s Your Turn!
NSPS Transition Issues
Many are happy that NSPS is no more, but some feds are having a bit of a rough time.
Some who excelled under NSPS got bonuses. As a result, they’re making more money than they would be according to their job classification under the GS system. Thus, when they move back into the old system they will be essentially taking a pay cut.
The problem is, there are no firm numbers about how many feds this actually effects. Some have said only a handful of feds are dealing with this. Others claim that this is affecting thousands.
Jessica Klement is legislative director at the Federal Managers Association and says her organization is hearing from many who are having problems with the transition.
“I will concede that we don’t have firm numbers yet. Many groups, including some members of Congress, have been asking DoD for this information. They have not released it. We have surveyed some of our members in places where FMA has representation. . . . These were our members that went under NSPS, and I can tell you it is way more than 3,000 to 4,000.”
Klement is not, however, completely defending the NSPS system. She says she has gotten a lot of emails asking why the FMA is supporting those who only got bonuses because of favoritism.
“Was that true in certain cases? It probably was. Do I know if it was true? No, but I think in certain cases it probably was. [I have heard] the argument, too, that these raises were not sustainable and they just wanted people to like the system. I can tell you, I got a lot of members who received large raises and are looking at pay retention, and those large raises did not make them like NSPS anymore than they would have otherwise.”
That being said, Klement explains that FMA thinks tens of thousands of federal employees are facing questions about their pay that no one is really able to answer right now, “Are they $1,000 over? Will the GS system catch up with them in a year or two? Or are we talking $10,000? I think that’s an important distinction to make, and unfortunately DoD has not been able to answer that question for us.”
Rolling Annual Leave into the TSP
We’ve also been telling you about that bill that would let those leaving federal service move their unused annual leave into their TSP account.
Klement says she doesn’t see why this bill won’t eventually pass.
“It’s already passed the House committee, which is a good first step [and] now the next step is getting it to the floor. We don’t have a Senate companion for it yet, but I think we’re in pretty good shape. This all came about because the President had urged private companies to allow their employees to do this. . . . You can’t do that with the TSP without legislation. In terms of support in Congress and the administration, it’s pretty strong. The bill has bipartisan co-sponsors.”
One potential fly in the ointment, however, is the cost of the move. During a segment with The Daily Debrief, Mike Causey talked about the recent CBO estimate that puts the cost of the proposed plan at $317 million over 10 years.
Klement says this is typical on Capitol Hill and TSP participants shouldn’t be concerned at this point about the bill dying.
“Per current pay-go rules, every bill that gets introduced in the House and Senate that has a cost to it, [Congress] is responsible for finding an offset. As you remember, that’s what happened last year with the FERS sick leave bill being attached to the tobacco bill. [Congress] could pay for it with revenue generated from another provision in the tobacco legislation. . . . You either have to cut a program or find other ways to generate revenue.”
Your Money, the Stock Market, and Panic
Do global events, like the weakening of the Euro, volcanoes in Iceland and trouble off the coast of the Korean peninsula have you worried about the state of the dollar?
Will the stock market crash again? Will your retirement be wiped out?
Certified Financial Planner Rebecca Schreiber says you shouldn’t be panicking and that things aren’t looking all that bad when it comes to the direction of the U.S. Economy.
“You have to look at where the U.S. Is in perspective. I was reading a recent article . . . about China buying up more U.S. Treasuries. China is the last country that wants to buy up more U.S. treasuries. They are up to their eyeballs in U.S. treasuries, but when you look around the world, if you want safe debt to buy, the U.S., out of everyone, is looking the best. Consumer confidence is up. Unemployment is being chipped away. In terms of our productivity, the numbers are up. The U.S. seems to be the first one coming out of the global recession. There are other countries who never really got into it, but in terms of the countries that got hit, the U.S. is recovering faster.”
Just like when TSP participants got scared a few years ago and moved their money into the G fund, Schreiber says countries like China are looking at the U.S. in the same manner.
“It helps me feel better about the economy, not only because I’m looking at what the catalysts are — housing prices and things like that — but when the rest of the world says, ‘We’ve got money, we want to put it some place safe, we’re going to put it in [the U.S.], that makes me feel better.”
And about all the ‘bad news’ out there — Schreiber says you have to look at whether it is really relevant to the U.S. economy, and, more importantly, yourself.
“There might be urgent, sort of spicy things being thrown at you, but you have to ask yourself, ‘Is this relevant to me right now? Is this money I’m going to be spending in the next five years?’ If it’s not, put it aside. Take that article and print it out or save it — save it for another day, because that information may be urgent, but it is not important right now.”