- The Washington Times - Tuesday, March 14, 2006

Despite setbacks in court, the Department of Defense plans to move ahead with its merit pay system. A scaled-down first step known as Spiral 1.1 is set to begin next month. Most of the feds drafted into the system will be headquarters types.

Workers in other agencies are watching the implementation of Defense’s National Security Personnel System because sooner or later, according to Bush administration goals, most of the civil service will be under it.

Defense and the Department of Homeland Security, which has similar overhaul authority from Congress, had hoped the new pay-for-performance system would be a Cadillac for the masses in government. But thanks to court-ordered delays and some production-line glitches, it is looking more like a Yugo for the few.

Federal unions hope to delay or bury the NSPS system, which ties pay raises to job ratings from supervisors, until it is modified to be more worker- and union-friendly, or a Democratic president or Congress drops it.

The Defense plan likely would have five rating levels, with pay tied to performance.

For other civil servants, the administration has proposed a three-level pay system. If approved by Congress, it could go into effect in January.

Backers of the proposed pay changes say it is a must for the government to operate in the 21st century. They say many, if not most, successful private-sector firms use similar systems.

Opponents argue that the proposed pay systems invite favoritism and could damage morale, especially in teams and groups if some team members got bigger raises than others.

Half-century club

If you turn 50 any time this year, or if you already have broken the half-century mark, rejoice — sort of.

Folks whose employers offer a 401(k) plan — and Uncle Sam has one of the biggest and best — who are 50 or older can sock away an extra $5,000 tax-deferred this year. That means investors can put in a total of $20,000, which does not affect any matching employer contribution.

The other advantages of being 50 escape me at the moment.

Buyout primer

If you are looking for a buyout from Uncle Sam, welcome to the club.

The government has a bumper crop of more than 700,000 retirement-eligible people. That group would be even larger if agencies offered early retirement — at age 50 with 20 years service or any age with 25 years as a fed.

There is a good chance some agencies will offer limited buyouts. What will not happen, however, is any change in the amount of the buyout. It will continue to be $25,000 gross — about $16,000 to $18,000 after all deductions.

Defense continues to be the lead agency in buyouts. It has paid buyouts to 120,000 civilians. During a three-year period in the mid-1990s, roughly 40,000 feds who were in non-Defense agencies also got buyouts.

• Mike Causey, senior editor at Federal News Radio AM 1050, can be reached at 202/895-5132 or [email protected]

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