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

A Possible Pay Raise, A Panel Pushes Benefits Cuts, and More

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A House panel on Tuesday released its blueprint for fiscal 2019 spending, which echoes the Trump administration’s proposals targeting federal employee retirement programs.

Republicans on the House Budget Committee said its “Budget for a Brighter American Future” would balance the budget within nine years through a mixture of cuts to mandatory spending and other federal programs. The plan also calls for a number of cuts to federal retirement programs, as outlined by the White House’s fiscal 2019 budget proposal, under the headline “Reform Civil Service Pensions.”

“This budget . . . calls for federal employees, including members of Congress and congressional staff, to make greater contributions to their own defined benefit retirement plans,” the committee wrote. “It would also end the special retirement supplement, which pays federal employees the equivalent of their Social Security benefits at an earlier age.”

The package also calls for “parity” between employees in the federal and private sector by “transitioning to defined contribution plans.” These proposals mirror Trump administration plans, outlined by Office of Personnel Management Director Jeff Pon in a letter to Speaker Paul Ryan last month, to eliminate Federal Employees Retirement System supplements for federal workers who retire before Social Security kicks in at age 62 and to increase the amount feds contribute to FERS by 1 percentage point per year until they reach an overall contribution level of 7.25 percent, matching the government’s contribution.

But so far, the Senate seems loath to take up the administration’s compensation proposals. That chamber’s appropriations committee is slated to act on a spending bill that not only would not include cuts to federal workers’ retirement programs, but would mark the first formal objection to the White House’s plan to freeze civilian employees’ pay in 2019.

The Senate’s version of the fiscal 2019 Financial Services and General Government appropriations bill, unanimously approved at the subcommittee level Tuesday, includes a 1.9 percent across-the-board pay increase for civilian federal workers next year. That figure is in line with the raise feds received in 2018, but falls short of the 2.4 percent proposed for military personnel next year.

The move comes months after Democrats in both chambers reintroduced legislation that would provide a 3 percent raise for federal employees.

On Monday, the Office of Government Ethics released guidance that states federal employees must begin disclosing their Bitcoins in annual ethics and financial disclosure forms.

In a memo to agency ethics officials, OGE Acting Director and General Counsel David Apol wrote that his agency has decided that “virtual currency” is considered a form of investment property, not “’real’ currency or legal tender,” and thus must be part of financial disclosures under the Ethics in Government Act.

“OGE recognizes that virtual currencies are experience a surge in use and access, and as a result, employees who hold virtual currencies are increasingly seeking guidance from their ethics officials concerning their financial disclosure reporting obligations,” Apol wrote. “[Accordingly], we are issuing this guidance to address reporting requirements for employees who hold virtual currency and note that we may need to issue further guidance as the nature of virtual currency becomes better defined.”

Employees now must include holdings of virtual currencies in their financial disclosures, provided they own at least $1,000 worth at the end of a reporting period, or if income produced by the currency exceeds $200. Additionally, workers must include the purchase, sale or exchange of cryptocurrencies in their annual and periodic transaction reports. Bitcoins are considered to be commodities, although some other forms of virtual currency may be considered securities.

The ownership of a form of cryptocurrency must also be incorporated into the potential for conflicts of interest, OGE said.

“Agency ethics officials should therefore analyze whether their employees’ official duties would have an effect on the value of their virtual currency, just as they would any other property held for investment or the production of income,” Apol wrote. “They should also alert their employees to the potential conflict of interest risk posed by ownership of virtual currency.”

Erich Wagner is a staff correspondent covering pay, benefits and other federal workforce issues. He joined Government Executive in the spring of 2017 after extensive experience writing about state and local issues in Maryland and Virginia, most recently as editor-in-chief of the Alexandria Times. He holds a bachelor's degree in journalism from the University of Maryland.

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