Federal Daily - October 6, 2008

Senate Approves Alaska, Hawaii Shift to Locality Pay

The Senate by unanimous consent approved on Oct. 1 a bill that would phase out the cost-of-living allowances (COLAs) for federal employees living in Alaska, Hawaii and U.S. territories, and replace them with locality pay. The bill, S. 3013, if it becomes law, would phase in locality pay over three years. The bill is necessary because of concerns over how federal employee retirement benefits are calculated, said Sen. Daniel  Akaka, D-Hawaii, bill sponsor. Federal employees working in those areas receive a COLA ranging from 13 percent to 25 percent. While those payments are not subject to federal income or payroll taxes, they do not count toward federal retirement benefits. They also don’t qualify as part of basic pay eligible for Thrift Savings Plan matching funds. The measure would move employees in Alaska, Hawaii and the territories into the “rest of the U.S.” category of locality pay over a three-year period. The bill would affect approximately 46,000 federal employees working in Alaska, Hawaii, Puerto Rico, the U.S. Virgin Islands, Guam and the Northern Mariana Islands, according to Congressional Budget Office (CBO) estimates. Increased retirement benefits would accrue to approximately 13,000 federal employees anticipated to retire between Fiscal Years (FY) 2009 and 2018, CBO said. As a result, CBO estimates that direct spending would increase by a total of $302 million over 10 years—$295 million for additional retirement benefits and $7 million for higher Social Security benefits. Under S. 3013, an estimated 8,000 employees of the U.S. Postal Service would not convert to locality pay and would continue to receive COLAs, but a provision of the bill would adjust the COLA calculation, CBO said. To see more, go to: http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=110_cong_bills&docid=f:s3013es.txt.pdf or the CBO report at www.cbo.gov/ftpdocs/96xx/doc9638/s3013.pdf.

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GAP Says White House Blocking Whistleblower Bill Vote

A whistleblower advocacy group alleges that the White House, along with a handful of Republican lawmakers, is blocking a vote on a final Whistleblower Protection Act bill.  The Government Accountability Project (GAP) on Oct. 2 said the measure was being blocked through secret “holds” by multiple unknown senators from the Republican Caucus. A “hold” is a Senate procedure that allows one member to temporarily freeze action on legislation. The Senate measure in question reconciles differences between the House whistleblower bill, H.R. 985 and the Senate version, S. 274. Both drew overwhelming support. Late last month, a bipartisan group in the Senate came to agreement on a final whistleblower bill, but the hold procedures are blocking it from coming to the floor, said Tom Devine, legal director GAP. “It appears a small handful of senators are following the marching orders of the Bush administration, which strongly opposes efforts to protect federal workers who blow the whistle on waste, fraud and abuse,” he said. The White House previously has threatened to veto both Senate and House versions of the legislation. To see more, go to: www.whistleblower.org/content/press_detail.cfm?
press_id=1503&keyword=.

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DHS Abandons New Personnel System

The Department of Homeland Security (DHS) Oct. 1 said it has abandoned plans to implement a new personnel system after Congress cut funding for the effort. Employees covered under the new personnel system will be immediately returned to Title 5 regulations that cover the vast majority of federal civil servants. DHS said in a statement that a provision in the Fiscal Year 2009 Consolidated Security, Disaster Assistance and Continuing Appropriations Act (H.R. 2638) “prohibits spending funds to operate our new DHS human resources management system.” Parts of the plan have been ruled illegal in court and DHS attorneys earlier this year pulled back from implementing new labor relations regulations that were intended to be part of the new system. National Treasury Employees Union (NTEU) President Colleen Kelley applauded the move. “The fact that Congress included this funding prohibition in the continuing resolution demonstrates that these proposed rules were a terrible idea for everyone—the agency, its employees and our nation,” said Kelley, whose union has opposed the system. “DHS now has an opportunity to work with employees and their representatives to improve morale that is at or near the bottom among major federal agencies.” To see more, go to: www.nteu.org/PressKits/PressRelease/PressRelease.aspx?ID=1328.

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TSP Monthly Returns for September 2008

Rates of Return were updated on October 1, 2008.

The monthly G, F, C, S, and I Fund returns represent the actual total rates of return used in the monthly allocation of earnings to participant accounts. The returns are shown after deduction of accrued TSP administrative expenses. The F, C, S, and I Fund returns also reflect the deduction of trading costs and accrued investment management fees. The most current G, F, C, S, and I Fund rates of return are shown above. Returns are updated after the monthly allocation of earnings, usually by the fourth business day of the month.

For more on TSP, click here.

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