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Key developments in the world of federal employee benefits: health, pay, and much more.

Legislative winners


As is true in all years, most federal pay and benefits proposals on Capitol Hill failed to make the leap into law in 2001. But some did, including provisions affecting buyouts and special payments to federal workers affected directly by the Sept. 11 attacks.

There were plenty of issues to keep House and Senate lawmakers occupied, so it's no surprise that this was not a year of major legislative upheaval in civil service rules. Those pay and benefits changes that made it to the President's desk tended to slip by in larger packages-most in the 2002 Treasury-Postal Appropriations bill and the 2002 Defense Authorization bill.

Here is a wrap-up of the legislative winners that Pay and Benefits Watch kept track of this year. (If you know of some more, please let us know and we'll mention them in the next column.) In an upcoming column, we'll review the legislative proposals-many of them very popular among the federal workforce-that didn't make it through.

2001 Legislative Winners

  • The Federal Long Term Care Amendments Act (H.R. 2559), which cleared the Senate this week and will soon be signed by President Bush, exempts federal employees' long-term care insurance premiums from state and local taxes. The bill also allows personnel who receive deferred annuities to participate in the long-term care insurance program, which debuts next year.
  • The Federal Firefighters Retirement Age Fairness Act, which became Public Law No. 107-27, increased the mandatory retirement age for federal firefighters from 55 to 57.
  • President Bush's tax cut legislation included a provision boosting the amount that federal workers can contribute to the Thrift Savings Plan, their 401k-style investment program. The current annual limit on TSP contributions is $10,500. Under the tax bill, the limit will rise to $11,000 in 2002, $12,000 in 2003, $13,000 in 2004, $14,000 in 2005 and $15,000 in 2006.
  • The 2002 Defense Authorization bill (See Title XI of the conference report, printed in the Dec. 12 Congressional Record House Section, No. 68) includes provisions that:
    • Let the Defense Secretary boost pay for Pentagon security personnel;
    • Create a pilot program for retraining laid off Defense Department employees;
    • Allow federal agencies to pay employees a special $150 payment in months when they are exposed to hostile fire while on duty, retroactive to Sept. 11;
    • Allow federal agencies to pay for employees to obtain professional credentials;
    • Slightly modify the wage-grade salary adjustment formula;
    • Instruct the Office of Personnel Management to write regulations that would let employees involved in work "critical to the mission" of their agencies receive premium pay above normal limits for biweekly pay periods;
    • Let federal employees keep frequent flier miles earned on government travel;
    • Remove the requirement that employees who transfer between non-appropriated and appropriated fund employment systems have five or more years of service in a system to elect to continue in the Civil Service Retirement System, Federal Employees Retirement System, or Non-appropriated Fund Retirement System, as applicable;
    • Make buyouts and early outs available to 2,000 Defense employees in 2002 and 6,000 in 2003 so that the Defense Department can restructure its workforce.
  • The 2002 Treasury-Postal appropriations bill's most important pay-related feature was a 4.6 percent average raise for federal employees in 2002. Other provisions:
    • Made child-care subsidies for low-income federal employees available permanently;
    • Create an awards program with major bonuses for senior level and senior technical professionals;
    • Allow air traffic controllers older than 56 to continue to work, depending on how many years they have served.

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

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