Pay & Benefits Watch Pay & Benefits WatchPay & Benefits Watch
Key developments in the world of federal employee benefits: health, pay, and much more.

Where things stand

Based on readers' questions and e-mails, here's an update on six pay and benefits issues: presidential pay, long-term care insurance, retirement error corrections, new Thrift Savings Plan funds, the special rates back pay case and some last-minute legislation in the 106th Congress. President's PayGeorge W. Bush picked a good year to become President. His salary will be double what President Clinton-and Clinton's five predecessors-made while in office. Bush will make $400,000 a year thanks to a provision tucked into the 2000 Treasury-Postal appropriations act. The provision gave the higher pay rate to whomever took office on Jan. 20. Bush is the first President to get a raise since Richard Nixon in 1969, when presidential pay was boosted from $100,000 to $200,000. The increase provides more room for pay increases for the rest of the federal government, where presidential pay traditionally serves as a cap. The salaries of the President's subordinates were creeping up to the $200,000 mark. The Vice President's salary has moved from $62,000 to $175,400 in the 30 years that the President's salary was stuck at 200K. Under the 1998 IRS Restructuring and Reform Act, up to 40 IRS officials can earn the same salary as the Vice President.

Federal executives and judges are among those hoping that the new presidential salary will bolster their efforts to convince Congress to increase their pay.

Long-Term Care Insurance

Long-term care insurance, which covers severe illnesses and disabilities not normally covered under standard health insurance, will be offered to federal employees by October 2002.

In September, President Clinton signed a bill instructing the Office of Personnel Management to set up the long-term care insurance program. As of this month, OPM is talking to insurance experts about how the program should be designed. OPM officials hope to offer the insurance at significantly discounted rates. Once they get a basic design together, OPM officials will post their plan on the Web for public comment.

Fixed Retirement Income

After Congress created the Federal Employees Retirement System in the mid-1980s, some agencies placed employees in the wrong retirement systems. Those employees are finally going to see their agencies' errors corrected.

Last year's long-term care insurance bill also included language instructing OPM to help the employees get their retirement situations fixed.

If you think you were placed in the wrong retirement system, go to and enter your information into the Federal Erroneous Retirement Coverage Corrections Act database. OPM will use the information to track down your personnel records and to provide you with retirement coverage options.

OPM will also issue regulations by March 19 that explain the procedures that affected federal employees must follow.

The New TSP

Even though the agency that manages the Thrift Savings Plan doesn't know when its new computer system will be ready for prime time, two new investment options will still enter the TSP's lineup on May 1.

The Federal Retirement Thrift Investment Board was originally going to debut the new 'S' and 'I' funds, along with the new computer system, in May 2000. But the agency and its contractor, American Management Systems, aren't sure when they'll finish de-bugging the new system. About 11,000 bugs have been discovered since testing began, with more than 2,600 bugs still needing resolution.

Rather than wait for the new system, the TSP board figured out a way to debut the two new funds this May using the old computer system. The 'S' Fund will invest in small capitalization stocks. The 'I' Fund will invest in international stocks.

For more on TSP changes, see the Jan. 18 Pay and Benefits Watch

Special Pay Rate Case

Where, oh where, is the fat lady?

Federal employees who received special pay rates at any time between fiscal years 1982 and 1988 have been waiting and waiting for their lawsuit to be over. Once the 18-year-old lawsuit is comes to a close, the employees will get back pay that a federal judge says they're entitled to.

But first the National Treasury Employees Union and the Justice Department have to sign a written agreement outlining a settlement. Here's what NTEU had to say as of Jan. 23:

"NTEU is now hopeful that a finalized written agreement will be achieved in the very near future. That assessment assumes that the government will continue to invest its resources--as it has done in recent months--to concluding an agreement. NTEU's evaluation further assumes that the new administration will not retreat from the material elements of the settlement to which the parties have agreed."

You can follow the case at

Last-Minute Laws

Some minor federal pay and benefits provisions snuck into the 2001 omnibus appropriations bill that President Clinton signed at the end of December. OPM Associate Director Henry Romero issued a memorandum last week that goes over the changes.

Read the memorandum if you are a law enforcement officer; member of the Reserves or National Guard; an administrative appeals judge; a National Transportation Safety Board accident investigator; a federal firefighter; or a federal physician; or if you live in Las Vegas; Austin, Texas; Louisville, Ky.; Nashville, Tenn.; or Raleigh, N.C. The memorandum is at


Brian Friel is founder of One Nation Analytics, an independent research, analytics and consulting firm for the federal market.

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