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Removing Poor Performers, Avoiding Bad Financial Advice, Extending Probation for New Feds and More

A weekly roundup of pay and benefits news.

When an agency has to reduce the size of its workforce, should poor performers be first in line to go? That’s a no-brainer for most private sector organizations. But the issue is less straightforward in government. Senate lawmakers are considering a provision in the 2016 Defense authorization bill that would make performance the only factor officials need consider when conducting a reduction in force. But House Democrats and some labor groups aren’t happy about it.

“Current law requires agencies to consider following four factors: tenure, veterans’ status, length of service and performance ratings. We believe all four of these factors are important and should be preserved,” a dozen Democrats wrote in a letter to the chairmen and ranking members of the House and Senate Armed Services Committees July 15.

The lawmakers view two other provisions in the 2016 National Defense Authorization Act (H.R. 1735) as hostile to federal workers as well. One would extend the probationary period of new employees from one year to two and give the military departments authority to extend the probationary period indefinitely. The other would delay automatic pay increases for poor performers.

“Since employees have fewer civil service protections during the probationary period, an extension of this period to two years or longer would undermine merit system principles and due process rights on which the federal civil service is based. The provision also would make it easier for managers to retaliate against whistleblowers during the longer probationary period, and it could hurt the department’s recruitment and retention of efforts as candidates may seek employment at other agencies,” the lawmakers wrote.

The pay provision is unnecessary because agencies already are permitted to deny or delay the award of step increases when warranted.

Rep. Elijah Cummings, ranking member of the House Oversight and Government Reform Committee said in a statement:

“We must stop these latest Republican attacks on the core principles that serve as the foundation of our federal civil service – merit, veterans’ preference, and due process. These provisions are especially troubling because their application to Defense Department civilian employees would establish a bad precedent for the rest of the federal workforce.”

Matt Biggs, legislative director of the International Federation of Professional and Technical Engineers, told the Washington Post, “These provisions are anti-worker, but they are particularly troublesome for veterans. Extending the probationary period is a policy position in search of a problem.  It assumes that managers will fire more newly hired federal workers in two years than they would if the probationary period were to remain at 12 months.”

The Labor Department has proposed a new rule to define who qualifies as a “fiduciary” of an employee benefit plan.

The proposed rule aims to protect people – including federal employees and retirees – from receiving unsound retirement investment advice. “If finalized, the rule should result in better investments and/or lower fees and, therefore, in greater returns on the hard-earned retirement savings of millions of Americans,” said Richard Thissen, president of the National Active and Retired Federal Employees Association, in a letter in support of the proposed rule.

NARFE is especially concerned that federal employees and retirees invested in low-fee TSP funds are vulnerable to unscrupulous or incompetent financial advice.

“Because rollovers are not covered by the existing definition of fiduciary investment advice, financial advisers may legally recommend that TSP account holders roll over their TSP holdings into an IRA, where the money could be invested in mutual funds providing the same, or essentially similar, products, such as an S&P 500 index fund, for as much as 50 times the cost. Due to economies of scale, TSP funds charge very low administrative fees – on average, 0.029 percent – that are far cheaper than alternatives that provide the same, or essentially similar, returns,” Thissen wrote.

And finally, the Office of Personnel Management is issuing guidance for federal workers who need help caring for aging family members. The "Handbook on Workplace Flexibilities and Work-Life Programs for Elder Care" offers a roadmap for employees and managers trying to navigate various leave and scheduling options available.  

“Promoting a culture in which managers and employees understand the workplace flexibilities and work-life programs available helps attract, empower, and retain a talented and productive workforce in the 21st century,” wrote Beth Cobert, acting OPM director in a memo.

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