Pentagon pay transition remains on track, data shows

The Defense Department has moved roughly 75 percent of those employees housed in its now-defunct personnel system back onto the government's General Schedule pay scale, according to the latest data.

Of the 226,000 employees included in the National Security Personnel System, the department had shifted 171,985 back into the GS system as of Sept. 30. The NSPS program office has estimated about 75 percent of the NSPS workforce will return to the General Schedule. In February, the office said most employees would be back to their old pay systems by October, and that appears to be the case.

But ensuring Pentagon employees do not lose salary as a result of the transition from the pay-for-performance system continues to be a concern for groups such as the Federal Managers Association. The average pay raise under NSPS exceeded raises under the General Schedule, so many NSPS employees are now, in terms of salary, a GS level above where they were when they entered NSPS. When these employees return to the GS grade they occupied prior to their conversion into NSPS, their salary could exceed the GS Step-10 level. Surveying its members, FMA had estimated an average of 20 percent to 25 percent of NSPS employees were subject to pay retention rules governing the transition -- and that percentage could increase, said Jessica Klement, government affairs director for the association. Under pay retention rules, these employees would receive only half the annual pay raise until the GS system catches up with them.

The latest data from the NSPS program office seems to bear out FMA's estimates, indicating 35,117 NSPS employees (21 percent) of the 171,985 employees to date who reverted to the GS system were subject to pay retention. Seventy-two percent, or 124,200 employees who shifted from NSPS back to the GS system, received an average pay increase of $1,454. Seven percent, or 12,668 employees, reverted to a grade and step within the GS system that matched the salary they earned while in NSPS.

Employees who might have earned more money under NSPS than they will now -- at least until the GS schedule catches up with them -- perceive the situation as unfair, especially when those who earned less money under the pay-for-performance system will end up with a salary bump when they return to the General Schedule, said Klement. "Above all else, it is demoralizing," she said.

The NSPS program office also just announced 2010-2011 pay pool tools and guides for employees who have moved out of NSPS or will do so before Jan. 2, 2011, as well as for workers who will remain under the system. For personnel who have transferred out of NSPS, pay pool shares are no longer tied to an NSPS rating. For those still covered by NSPS, the governmentwide pay increase tab located on the worksheet reflects a projected NSPS general salary bump of 0.9 percent for 2011. The projected 0.9 percent figure is consistent with President Obama's proposed 1.4 percent raise in 2011, which includes both base and locality pay.

Congress scrapped the National Security Personnel System in the fiscal 2010 Defense authorization law, giving the department until Jan. 1, 2012, to roll back the controversial pay-for-performance system completely.