- The Washington Times - Monday, August 15, 2005

When Congress approved the plan to overhaul the civil service system, federal unions hoped they could delay implementation in the Departments of Defense and Homeland Security and retain bargaining rights.

At best, the unions want to maintain some of the status-quo features of federal job rules and prevent the spread of “reform” to other agencies.

Unions were concerned about losing automatic pay raises to those based on performance ratings, as well as elimination of longevity pay raises and the impact of pay banding, that is lumping three or four civil service grades into one big pay band.

But their only legal avenue was to challenge the impact on collective bargaining rights that Congress granted years ago.

Now, thanks to a team of dogged union attorneys and union lobbyists and the misgivings of many rank-and-file feds, the unions are beginning to think that they have a real shot at delaying the changes until the White House and/or Congress is under new management.

Although many federal workers say they would welcome a private-sector style of merit pay, the vast majority say such a system — which often is based on the profit motive that drives the private sector — cannot work in a service-oriented government. Although some politicians seem to agree that the new system will not work, the courts have concentrated on narrow interpretations of law and civil service rules.

And they keep ruling in favor of unions that say the White House plan, which now includes “reforming” the entire civil service by 2010, is both unfair and a breach of contract with employees.

The administration suffered its latest cut with the late-Friday ruling by Judge Rosemary M. Collyer of U.S. District Court in Washington. Unions had asked the court to strike down work rules changes proposed for the Pentagon and the DHS, which employ about half the white-collar federal work force. The judge, who was appointed by President Bush, said the sweeping White House-proposed changes simply go too far.

The civil service reform plan was fast-tracked through Congress. But over the past few months, target dates have been upset repeatedly. That could convince politicians of both parties that doing nothing on this subject is wiser than doing anything.

L funds

The new Lifecycle funds of the federal Thrift Savings Plan are only 16 days old, but they already are showing distinct personalities.

Thousands of feds have switched millions of dollars into one of the five L Fund options. The allocation of funds, among high-risk stocks, bonds and a Treasury fund, are based on the date the investor plans to start tapping his or her account. The so-called L Income Fund is for people approaching or at that point.

The L 2040 Fund is for people who don’t plan to touch the fund for another 35 years. Although feds retire earlier than the average American worker, many don’t touch their TSP accounts until long after they have retired, so the 35-year time horizon for a young fed is not unreasonable.

As of last week, the “share” price of the L Income Fund was $11.62; the L 2010 Fund value was $12,74. The L 2020 Fund was at $13.29 per share, and the L 2030 and L 2040 funds were $13.68 and $14.08, respectively. The farther out the drawn-down date, the larger the share of high-risk/high-reward stocks, which, this year, have been doing very well.

Retiree COLA

The January cost-of-living adjustment (COLA) for retired civil servants, military retirees and Social Security recipients is set to be 2.7 percent, but that will go up if living costs for this month and September rise. That is likely given the increasing cost of oil.

The federal pay raise due in January remains a political football. Congress wants the feds to get 3.1 percent, like the military, but the White House is insisting 2.3 percent is more than generous when private-sector wage gains are considered.

• Mike Causey, senior editor at Federal News Radio AM 1050, can be reached at 202/895-5132 or mcausey@federalnewsradio.com.

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