Senate Panel Drops TSP Catch-Up Contribution Restrictions, A Blow to Pay Parity, and More

A weekly roundup of pay and benefits news.

Less than a week after floating the idea that older employees should no longer be able to make extra contributions to their retirement accounts before taxes, that proposal appears to be off the table, for now.

Senate Finance Committee Chairman Orrin Hatch, R-Utah, had filed an amendment to the chamber’s tax reform legislation last week that would restrict so-called “catch-up” contributions for workers aged 50 and above to 401(k), 403(b) and 457(b) retirement accounts and the Thrift Savings Plan to Roth investments, which are taxed before the money is invested. His plan also banned the use of catch-up contributions for employees making at least $500,000 per year.

But when the committee marked up its version of the Tax Cuts and Jobs Act Thursday, those proposals were not included, following outcry from federal retiree and employee groups and the retirement savings industry.

The House approved its version of the Tax Cut and Jobs Act (H.R. 1) Thursday. That legislation similarly does not include any changes to how Americans can make catch-up contributions to their retirement accounts.

Elsewhere on Capitol Hill, the Senate Appropriations Committee released the initial version of its fiscal 2018 financial services and general government spending bill Monday. The legislation contains less steep cuts to agencies than requested by the Trump administration last spring, but it does not include a provision to mandate an across-the-board pay raise for civilian federal employees.

If adopted in its current form, Congress would allow President Trump to determine how much of a pay increase to give civilian feds next year. In August, Trump authorized a 1.9 percent pay increase for civilian federal workers in 2018, and he must finalize that plan before the end of the year.

Federal employee groups and some lawmakers have vowed to press for pay parity between the federal government’s civilian and military workforces, in light of the fiscal 2018 National Defense Authorization Act, which was approved by Congress last week and includes a 2.4 percent across-the-board pay hike for military service members.

The Office of Personnel Management last week granted federal agencies fast-track hiring authority for temporary jobs related to IT modernization projects in the 2017 and 2018 fiscal years. As Nextgov’s Mohana Ravindranath reports, the provision, which provides access to “excepted service” hiring, will allow departments to fill high skill jobs more quickly, as well as help them to better prepare for recruitment efforts in the future.

Agencies can only make appointments between now and Sep. 30, the memo notes, though the appointments can be extended by up to a year at a time.

Modernization programs rely on a highly specialized workforce, but “the lengthy and cumbersome federal hiring process often turns top candidates away,” Margot Conrad, director of education and outreach for the nonprofit Partnership for Public Service, said in an email statement. The new authority can expedite that hiring process, she said.