A weekly round-up of pay and benefits news.
The debate over the practice where federal employees who are union members are paid to perform representational duties heated up last week, beginning with a contentious hearing on Capitol Hill and ending with an executive order that aims to significantly curb its use.
Last Thursday, Republicans on the House Oversight and Government Reform Committee assailed the practice of official time during a hearing that lacked in-person input from employee groups. The Republicans called official time a waste of taxpayer dollars and a “subsidy” for union internal and political work.
Democrats, conversely, argued that official time actually saves agencies money, because they foster a collaborative relationship between labor and management, reducing formal grievances and litigation and allowing parties to work together to make operations more efficient and prepare for upcoming initiatives.
Republican lawmakers particularly derided the fact that in fiscal 2017, 981 federal employees spent at least 50 percent of their time on official time, of whom 221 earned at least $100,000 per year. That issue seemed prophetic, as the next day, President Trump signed a series of executive orders aimed at making it easier to fire malfeasant and poor performing federal employees and significantly limiting the use of official time.
One of the orders instructs agencies to limit employees’ use of official time to 25 percent of their overall workday when they next negotiate collective bargaining agreements with unions. It also bars employees from using official time to lobby Congress or to represent employees who have filed a grievance or are appealing an adverse personnel action.
Federal employee unions have decried the executive orders since their release, calling them an “assault” on collective bargaining. Both the American Federation of Government Employees and the National Treasury Employees Union have said they are exploring possible legal action to prevent the orders from taking effect.
Meanwhile on Wednesday, officials with the Thrift Savings Plan said they are in the planning stages of increasing the default contribution rate for new federal employees so that they automatically take full advantage of the federal government’s matching contribution when they enter public service.
TSP Executive Director Ravindra Deo said at the monthly meeting of the Federal Retirement Thrift Investment Board, which administers the TSP, that beginning in October 2019, all new federal civilian employees will automatically defer 5 percent of their pre-tax income into the 401(k)-style retirement savings program rather than the current 3 percent.
According to TSP spokeswoman Kim Weaver, the program already sees about 70 percent of participants contributing at least 5 percent, which is the most that the federal government provides in matching funds, but that proportion has plateaued in recent years. Weaver said announcing plans to increase the default contribution rate now will allow agencies time to incorporate the new policy into their budget proposals for fiscal 2020.
TSP officials also announced plans to implement last year’s law making it easier for federal employees and retirees to withdraw money from their retirement savings accounts. By September 2019, officials said participants will be able to make partial withdrawals as frequently as once per month after they leave federal service, and four times a year for those still in-service and at least 59.5 years old.
And the new rules will allow participants already receiving regular withdrawals or annuities to change the amount and frequency of payments whenever they want, instead of during a designated open season period.