2000 Year in Review: The year in pay and benefits

If you've missed the past few editions of our weekly Pay and Benefits Watch column, here's a roundup of federal employee benefits that were approved in 2000:

• Long-term care insurance. Federal employees now have the option of buying long-term care insurance at a discounted rate thanks to H.R. 4040, signed into law in September. Long-term care insurance covers the medical costs of extended illness, including home health care, nursing home care and care in assisted-living facilities.
• Erroneous retirement coverage corrections. H.R. 4040 also provides relief to federal employees and their families who, through no fault of their own, became victims of retirement coverage mistakes. Up to 18,000 federal workers may have been affected by the foul-up, which occurred in the mid-1980s during the transition from the old Civil Service Retirement System to the Federal Employees Retirement System.
• Higher retirement contribution rates. A repeal next year of the 0.5 percent retirement contribution increase imposed on federal employees as a budget-reduction tactic was included in the fiscal 2001 Transportation appropriations bill, which became law in October. Higher employee contributions began in January 1999 and were not scheduled to end until 2002.
• TSP for the troops. The Defense authorization bill, H.R. 4205, which became law in early November, allows service members to participate in the federal Thrift Savings Plan retirement program. Previously, the 401k-style plan was only open to civilian federal employees.
• Instant TSP gratification. Newly hired federal employees can begin investing immediately in the Thrift Savings Plan and employees can roll over funds from private sector retirement plans into their TSP accounts under a bill, H.R. 208, that became law in late October.
• TSP contribution limits. Legislation that raises the maximum annual employee contribution to Thrift Savings Plan accounts by 1 percent of salary per year for the next five years was included in the Labor-HHS-Education appropriations bill approved in late December. After the five-year gradual increase, the limits on the amount of money federal employees can contribute to their TSP funds will be eliminated.
• Child care subsidies. Funding for a child care subsidy for lower-income government employees was reauthorized for another year. The law permits agencies to use appropriated funds to help lower-income employees cover the costs of child care in licensed child care centers.
• SES pay hike. Pay for members of Congress was boosted by 2.7 percent to $145,100 next year. Since pay for members of the Senior Executive Service is tied to the pay scale for members of Congress, SESers will get a pay boost in 2001. However, a cap on executive pay has left SESers at the top pay levels with the same pay rates.