Pay and Benefits Watch: Pieces of the pay puzzle

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The pieces of the federal pay puzzle for next year are falling into place, but federal employees won't know exactly how much total compensation they'll be getting from Uncle Sam in 2000 until December.

There are several pieces to the pay puzzle. Let's take them one at a time.

1. Pay Raise

The 2000 Treasury-Postal appropriations bill, signed into law at the end of last month, ensured federal employees an average pay raise of 4.8 percent. But President Clinton has not yet announced how the raise will be split between an across-the-board raise and locality-based increases. Once he does that, most likely at the end of November, the Office of Personnel Management will publish the General Schedule pay table for 2000. Then employees will know exactly what their pay raise will be, based on where they live. Some employees are also due within-grade increases, which will also figure into their total pay raise.

Senior executives will also find out in December what raises they'll get in 2000.

2. Retirement Contributions

Under the 1997 Balanced Budget Act, federal employees will pay more into their pension fund in 2000 than they did in 1999. The act raised retirement contributions 0.25 percent in 1999, 0.15 percent in 2000 and 0.1 percent in 2001. However, Sen. Paul Sarbanes, D-Md., and Rep. Tom Davis, R-Va., are working to get the increase in contributions eliminated. If they manage to get their bills (S. 1472 and H.R. 2631, respectively) passed, or rolled into an appropriations bill, federal pay checks will be a bit beefier next year.

3. Health Insurance Premiums

Health insurance premiums for federal employees will rise an average of 9.3 percent next year. Some employees have discovered that their premiums will go up much higher than that if they stay with the same insurance company. Employees will have a chance to change companies during the Federal Employees Health Benefits Program open season from Nov. 8 to Dec. 13. (See GovExec.com's Open Season Guide.) If employees decide to vote with their feet and choose less expensive plans, they'll find a few more dollars in their wallets in 2000.

4. Life Insurance

Basic life insurance coverage is automatically provided to federal employees unless they waive the coverage when they're hired. Coverage is equal to the employee's annual basic pay, rounded to the next $1,000, plus $2,000. (So if you make $63,412 a year, you get basic coverage of $66,000.) The government pays one-third of basic premiums. The other two-thirds is deducted from employees' paychecks. For each thousand dollars of coverage, employees pay 15.5 cents every two weeks toward their basic life insurance. OPM reduced the biweekly charge from 16.5 cents earlier this year. Additional life insurance options increase the cost (See the rates under the Federal Employees Group Life Insurance program on OPM's Web site).

5. Liability Insurance

The fiscal 2000 Treasury-Postal appropriations bill recently signed by President Clinton contains a new requirement: Federal agencies must reimburse their employees for half the cost of purchasing professional liability insurance. The cost is typically $260 per year, so if employees opt to get the insurance, they will pay about $130 a year and their agencies will pay about $130 a year. (See "A Look at Liability," June 17.)

Some of the other puzzle pieces to consider are bonuses, quality step increases, the various caps on overtime pay and total compensation and Thrift Savings Plan contribution levels (especially with two new investment funds debuting in May 2000).

Many of the pieces are still not ready to add to the puzzle, but Pay and Benefits Watch will continue trying to put it all together between now and the end of the year.

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