Most of the 1.2 million white-collar federal workers will get the same percentage pay raise next month, but it will vary slightly depending on the employee’s locality.
Thanks to the one percentage point President Bush set aside for locality pay adjustments (from the 3.1 percent increase Congress authorized), feds will get as much as a 5.6 percent raise in Raleigh-Durham-Chapel Hill, N.C., to as little as 2.9 percent in Phoenix.
The Washington-Baltimore area will get 3.44 percent. The pay increase is official, and it is effective with the first pay period beginning on or after Jan. 1.
The increase is considered part of basic pay for retirement purposes, which is important because federal annuities are based on the length of service and the employee’s highest three-year average salary. That means that a GS 7, or 12 or 15 employee who spends a career in Washington will get a bigger annuity than his counterpart in Nashville, Tenn., but less than the same worker at the identical grade and time in service in San Francisco.
Feds who retire by next Tuesday under the old Civil Service Retirement System and who turn in unused annual leave will get a lump-sum payment for most of that leave at the higher pay rate.
Pay raises for federal white-collar workers are based not on the cost of living, but on local private-sector wages as measured by the Bureau of Labor Statistics. That is why feds in Houston (with all those oil companies, engineers, etc.) typically get bigger raises than their counterparts in the Washington area.
The January pay raise will be the last time that many workers in the Homeland Security and Defense departments (especially in the Washington headquarters) get the same raises as employees of the Interior, Agriculture and other departments.
Homeland Security and Defense plan to phase in a pay-for-performance system that will mean different raises for workers based on their annual performance ratings — and the amount of money in their pay pool. Many feds are leery of the system, which they concede looks good on paper but might be skewed by budgets and favoritism by bosses. Federal unions are fighting in court to block, or at least delay, implementation of the system.
Dental benefits plan
Beginning in November, federal and postal workers will be offered the option to purchase dental insurance that will supplement their regular federal health insurance plans. Details haven’t been ironed out. The number of plans offering the optional coverage (meaning you pay the entire premium) isn’t known. The coverage will be effective starting 2007.
Because dental benefits are generally poor in the federal health plan (as in most private-sector health plans), this is yet another reason to floss every night.
Mike Causey, senior editor at Federal News Radio AM 1050, can be reached at 202/895-5132 or email@example.com.