- The Washington Times - Tuesday, January 1, 2002

Even with their 4.77 percent pay raise for 2002, Washington- and Baltimore-area federal workers like the rest of us can’t take it with them.
But depending on their geographic location, some white-collar federal workers will have more to leave their heirs or to spend than their grade and job twins elsewhere.
The locality pay salary gap between some federal employees has increased to about 10 percent, which over an extended period can mean tens of thousands of dollars (plus or minus) in salary, lifetime annuity benefits, 401(k) investments, plus the value of unused annual leave when you cash in, or your life insurance policy when you check out.
The 4.77 percent locality pay raise that Washington- and Baltimore-area workers will get next month moves them further ahead of those in places such as Norfolk which will get a 4.52 percent raise and Richmond, where employees will get a 4.62 percent adjustment.
The 4.77 percent means the Washington-Baltimore area will remain in the middle-of-the-pack list of cities for federal pay purposes.
Test your federal pay I.Q. Federal workers in the Washington-Baltimore area are paid about the same as their counterparts in what cities?
Federal workers in this area earn almost exactly the same as their counterparts in Seattle, Portland, Philadelphia, Minneapolis, Sacramento and Cincinnati.
Federal workers in Denver, Miami, New York, San Francisco, Houston and Los Angeles make considerably more.
The locality part of each annual federal pay raise is determined by how much of the general (average) raise the president earmarks for city-by-city adjustments, and then the federal-versus-private sector pay differential in each city.
It doesn’t matter that federal employees in Houston (the second-highest-paying government town after San Francisco) enjoy lower local taxes and don’t have to buy snow shovels. The number of high-paying oil-related jobs there puts them near the top of the federal pay totem pole.
The federal employee pay tables for 2002 can be found on the Internet at www.opm.gov.

Pay facts
The pay raise is based on salary and political and budgetary considerations. It has nothing to do with the cost of living. That’s why federal workers got a 4.6 percent average raise while retirees whose annuities are linked to national inflation will get only 2.6 percent in January.

Retirement timing
If you retired by Jan. 3 under the old Civil Service Retirement System, than most of the unused annual leave you carried over will be paid to you in a lump sum at the 2002 pay scale.
For high-income workers with lots of unused leave that will be a dandy check even after taxes. So why do you get the higher pay even though you’ve left the payroll? Because the law says your annual leave is to be paid at the rate in effect when you would have used it, not when you earned it.

Retiree raises
You can’t retire in December and get the January COLA. If you retired in mid-2001, than you will get a pro-rated share of the total 2.6 percent increase.

After retirement
Federal workers with Thrift Savings Plan (TSP) accounts can leave their money in TSPs when they retire, subject to IRS age-withdrawal rules. But they can’t open TSP accounts after they retire and they cannot as with any 401(k) plan add money to TSPs once they have retired.

Who’s got what?
Are there any TSP millionaires yet? The answer is yes: at least one. In midyear, somebody rolled over his or her private sector 401(k) plan money into the TSP.
One suspects it was a high- (as in very high-) ranking Bush administration appointee who decided that the federal TSP, with its lowest-in-the-business administrative fees and supersafe Treasury fund, was the best and safest place to park the nest egg.

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