Welles: 2005 ? The good, bad and ugly

or federal employees and retirees, 2005 will bring a mixture of the good, the bad and the ugly as government agencies tighten their belts. With a slight expansion of pay and benefits, more money will come from employees' own wallets, especially for health care. Competitive sourcing and the potential for staffing rollbacks could get messy.

For military and civilian federal employees, lawmakers passed a 3.5 percent pay increase for next year, although it could be reduced to 2.5 percent through a freeze on locality pay for General Schedule employees.

Those in the Senior Executive Service who are staying in government can look forward to accruing more annual leave — at the rate of eight hours every two weeks. Those leaving government can use new Web job banks to search for opportunities in the private sector and also post their résumés, courtesy of the Senior Executives Association (www.senior execs.org) and Avue Technologies.

Employees who commute to the Commerce, Justice and State departments could find more opportunities to telecommute next year. When the 2005 omnibus appropriations bill becomes law, officials at those agencies will have two months to make telecommuting available to 100 percent of the eligible workforce. If they don't, the departments will face penalties of $5 million.

The Federal Employee Dental and Vision Enhancement Act will allow federal employees and retirees to purchase supplemental insurance at their own expense for dental or vision benefits at rates negotiated by the Office of Personnel Management. The benefits will take effect in 2006. 

Rates for the Federal Employees Health Benefits (FEHB) program will rise in 2005 at a slower rate than in previous years. But health savings accounts, which provide a tax-free option with high deductibles, could drive up premiums by siphoning off healthier, younger employees from FEHB, said Colleen Kelley, president of the National Treasury Employees Union.

Retiring employees might have an option to elect — and pay for — survivor benefits in excess of the current 55 percent level (50 percent for those in the Federal Employees Retirement System said officials at the National Association of Retired Federal Employees (NARFE).

For federal employees who compete for their jobs, more competitive sourcing or contracting out of federal jobs is likely because proposed limits were stripped from the omnibus appropriations bill.

Union officials "will continue to work with Congress to slow down or stop the drive to move work out of the federal government," Kelley said.

So what's the outlook for 2005? "Not too optimistic," said Judy Park, NARFE's legislative director. "I think 2005 is without question a year when we will all have to play defense."

2005 appears to be a year to get a life.

Welles is a retired federal employee who has worked in the public and private sectors. She lives in Bethesda, Md., and writes about work life topics for Federal Computer Week. She can be reached at judywelles@fcw.com.