Transitioning Out of NSPS

The Pentagon said Wednesday that it will temporarily cut pay raises in half for more than 11,000 civilian workers transitioning out of the derailed National Security Personnel System.

John James, director of the NSPS transition office, told the Senate Homeland Security and Governmental Affairs Subcommittee on Oversight of Government Management, the Federal Workforce and the District of Columbia that 21 percent of the 53,057 that have shifted back to the General Schedule since May 23 earn salaries that exceed the maximum rate for their positions' GS grade. According to the government's pay retention rules, he said, these employees must be put on pay retention, meaning they will receive only half of the annual pay raise all other GS employees receive until the General Schedule's maximum step 10 pay rate catches up to their salary.

"In other words, pay retention protects the employee's current pay and limits pay increases," James said. "Each time a GS annual adjustment occurs, the employee's pay comes closer to being appropriate for the grade level of the work he or she performs."

Still, while pay increases will be cut for some employees, approximately 71 percent of the employees that have transitioned back to the GS system since May 23 received a pay increase, with an average salary bump of $1,363 per year, James said. Eight percent remained at their same rate of pay because their salary matched a step within their new GS grade, he added.

The Pentagon is in the process of creating a new personnel system to replace NSPS, and James assured lawmakers that the department is fully committed to working with management, employees, unions and other stakeholders. Success in designing the new system will depend on whether it is fair, credible and transparent, several witnesses testified. "In order for any new system to succeed at [Defense], we must learn from the implementation mistakes made under NSPS," said Patricia Niehaus, national president of the Federal Managers Association.

It's unclear how many employees will be impacted by the pay retention rules as the Defense Department continues transitioning the 226,000 total employees out of NSPS and back to the General Schedule. What are your thoughts on the transition? Are the pay retention rules fair, and how might they impact Defense's ability to retain employees?