Federal Daily - October 20, 2008

Federal Annuitants to Get Biggest COLA Boost in Decades

Due to the quickly rising costs of goods and services, federal retirees will get the biggest cost-of-living adjustment (COLA) since 1982. Federal annuitants who retired under the Civil Service Retirement System (CSRS) will receive a 5.8 percent COLA hike next year. Retirees under the Federal Employees Retirement System (FERS), which uses a different formula, will receive a 4.8 percent increase. By comparison, last year's increases were 2.3 percent for CSRS retirees and 2 percent for FERS recipients. FERS retirees over age 62 also receive a Social Security benefit, which will increase by 5.8 percent. The increases are based on the Consumer Price Index for Urban Wage Earners and Clerical Workers, which measures the changes in costs of goods and services over the year ended Sept. 30. The boost in annuities will be reflected in January payments to federal retirees. “These increases of 4.8 and 5.8 percent are a small bit of welcome relief for retired federal workers who contributed so much to our nation,” said National Treasury Employees Union President Colleen M. Kelley. Margaret L. Baptiste, president of the National Active and Retired Federal Employees Association, applauded the increase, but worried that the COLA hike will be outpaced by the recent surge in inflation affecting food prices, utility bills and health insurance premiums. To see more, go to: www.narfe.org/departments/hq/guest/articles.cfm?ID=1590 or www.nteu.org/PressKits/PressRelease/PressRelease.aspx?ID=1331.

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MSPB: Agencies Should Offer Alternate Discipline Training

Few federal agencies have formal policies or provide training on alternative discipline, leaving supervisors to fend for themselves when considering remedies other than traditional disciplinary measures for misbehaving employees, said a Merit Systems Protection Board (MSPB) report released Oct. 15. According to the report, “Alternative Discipline: Creative Solutions for Agencies to Address Misconduct,” traditional discipline is most often a reprimand (sometimes called an admonishment), suspension, change to lower grade, or removal. But while federal agencies have a responsibility to manage their workforces effectively, alternative discipline may—under the right circumstances—be a more efficient and effective approach than traditional discipline, the report said. In a survey of 22 departments and agencies, MSPB said only seven of 46 responding organizations reported having established a formal agency-wide policy—even though 80 percent of those organizations without such a policy are permitted to use alternative discipline on an ad hoc basis. The report also noted that a handful of agencies use alternative methods automatically, with little or no assessment of the employee or of possible nuances of the particular situation. And, some agencies limit the use of alternative discipline to low-level offenses or early offenses, while others use it primarily as a final effort before removal. “Alternative discipline is a great tool for supervisors to consider if they have an employee who is engaging in misconduct,” said MSPB Chairman Neil A.G. McPhie. “It empowers proposing and deciding officials to work with the misbehaving employee in order to craft a solution that has the greatest potential to change that employee’s conduct.” To see more, go to: www.mspb.gov/sites/mspb/pages/MSPB%20Studies.aspx.

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OPM Cancels Hewitt Portion of RetireEZ Contract

The Office of Personnel Management (OPM) on Oct. 16 announced it canceled a 10-year, $290 million contract with Hewitt Associates of Lincolnshire, Ill., after the company failed to deliver a functioning retirement calculation engine for the RetireEZ program. The termination takes effect immediately. No work under the contract had been performed since OPM issued a stop-work order in May 2008, OPM said in a statement. The online calculation engine was to enable retirees to plan for retirement and calculate their payments. Additional elements of the overall RetireEZ program, including the process improvement element and data conversion, are unaffected by this termination, OPM said. OPM Acting Director Michael W. Hager noted the data conversion element, one of the three main facets of RetireEZ, is moving forward. OPM said it has integrated data from multiple sources for more than 1.5 million active federal employees, as well as captured more than 8 million imaged records for more than 1 million active employees. “Since the stop-work order was issued, we have worked diligently to carry through with the other elements of RetireEZ, and the progress we have made is significant,” said Hager. No final decision on what to do about the RetireEZ calculation engine has been made, Hager said. To see more, go to: www.opm.gov.   

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