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Pay Raise Battle Lines Drawn, and More

A weekly roundup of pay and benefits news.

In the months since the Democrat-controlled House passed a spending bill that would provide federal civilian employees with an average 3.1% pay increase in 2020, it had been unclear what Senate Republicans’s initial counter offer would be.

On Tuesday, observers got their answer. A Senate Appropriations subcommittee advanced a spending bill that was silent on federal compensation, effectively endorsing President Trump’s alternative pay plan, which calls for a 2.6% across-the-board raise in 2020 and no changes in locality pay. The House’s legislation would provide the same across-the-board increase, along with an average 0.5% increase in locality pay.

Unless senators successfully amend the bill when it is considered by the full Senate Appropriations Committee Thursday, lawmakers will have to negotiate during a House-Senate conference over whether to include the locality pay increase. Lawmakers have until the end of September to reach agreement on fiscal 2020 spending bills, but the House is expected to vote on a short-term continuing resolution later this week that would push the deadline to Nov. 21. 

In a statement, National Active and Retired Federal Employees Association National President Ken Thomas accused senators of shirking their duties by not weighing in directly on the pay raise issue.

“On a bipartisan basis, the Senate Appropriations Subcommittee on Financial Services and General Government failed to exercise its authority to provide federal employees any pay raise next year,” Thomas said. “Private-sector pay increases continue to outpace federal pay rates, and Congress has approved a 3.1% pay raise for the uniformed service members often working side by side their civilian counterparts. Yet, Senate appropriators have abrogated their responsibility and put their trust in the president, who has indicated support for a below-market 2.6% pay raise.”

Meanwhile, the Federal Retirement Thrift Investment Board, which administers the Thrift Savings Plan, on Monday announced a request for proposals to consider new vendors to provide annuities to TSP participants.

When federal employees retire, they can elect to receive regular payments from the TSP, make lump sum withdrawals, or purchase an annuity, which is administered by a third party contractor. TSP spokeswoman Kim Weaver said most participants elect to keep their money with the TSP as opposed to selecting an annuity, so that their money can remain invested in stocks and securities.

So far in 2019, the TSP has processed 910 annuities.

The contract, which currently is held by MetLife, is for a three-year period, with two one-year optional extensions based on performance. The agency said it will award the contract by Jan. 1, 2020.