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Defense Authorization Bill Repeals NSPS

By Ed O'Keefe

Federal employees and their unions should remember Oct. 7, 2009: It's the day they got to cross several items off their wish list.

The conference committee working on a compromise version of the Defense authorization bill (pdf) delivered several long-sought reforms impacting current and former federal employees, their salaries and the way the government measures their performance.

The big one: a repeal the controversial National Security Performance System, the Bush-era pay-for-performance program approved by Congress in 2003.

The Department of Defense would maintain more performance management and hiring flexibility than other agencies, but must end NSPS by Jan. 1, 2012. It cannot enact a new pay-for-performance system without submitting detailed proposals to Congress for approval.

Roughly 30 percent of the Defense Department’s civilian employees are part of NSPS, according to the Pentagon. Of those, only 749 employees are members of federal workers unions. But employees, federal unions, outside experts and lawmakers of both parties have long agreed that the program is ineffective, confusing and detrimental to employee morale.

“It’s a big day for us,” said John Gage, president of the American Federation of Government Employees. He thanked lawmakers for repealing what he called “a terrible idea.”

“It was just bad for employees and bad for the country. It wasn’t a motivator for federal employees. it wasn’t fair or open. It was a gimmick,” Gage said.

Lawmakers “could have punted on this issue,” said William R. Dougan, president of the National Federation of Federal Employee. Instead, “The committee took bold action, and I believe it was the right thing to do.”

“The system didn’t work,” said Rep. Stephen F. Lynch (D-Mass.), one of the lead House negotiators advocating for repeal. The new arrangement will ensure Congress maintains a voice in how the Defense Department measures employee performance, he said.

The compromise announced Wednesday includes several other important changes for current and retired federal employees. Members of the Civil Service Retirement System will be able to phase down to part-time status towards the end of their career without jeopardizing their pensions. In a big change for members of the Federal Employee Retirement System, workers will be able to have sick leave credited to them when they retire. That provision will be phased in over the next four years to alleviate the cost to the government. FERS members returning to government work will also have the option of repaying their prior contributions with interest to the civil service trust fund, putting them on par with members of CSRS. Agencies will also be able to hire back federal retirees under certain conditions and these annuitants will be able to receive a new salary while keeping their pension.

“Altogether these improvements will bolster the morale of current employees and strengthen the federal government’s ability to attract and retain the high-quality workforce required to meet our national challenges,” Rep. Steny Hoyer (D-Md.) said in a statement.

Rep. James Moran (D-Va.), who has long advocated for changes to FERS, agreed.

“This is probably the biggest issues that we’ve gotten through in the last few years. We really weren’t able to get anything for federal employees in the last eight years. This is the first major achievement for federal employees since 2000,” Moran said.

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By Ed O'Keefe  | October 7, 2009; 6:28 PM ET
Categories:  Congress, Workplace Issues  
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