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Update: Office politics, the NSPS transition and available tax credits for retirees

Dorothy Ramienski | Internet Editor | FederalNewsRadio

March 10, 2010

Update: How is the NSPS transition going?

NSPS is officially dead, and many in both systems are concerned about how the transition will go and whether everyone will be treated fairly.

Jessica Klement of the FMA confirmed that some in NSPS are making much more than they would in the GS system.

“I can’t speak for how many people this affects and what their pay raises actually were, but in general the pay raises under NSPS — the average pay raise — exceeded the General Schedule pay raises over the three or four years. There are folks under NSPS who never received a performance rating under NSPS. It’s the position of FMA that those folks should be the first ones converted back to the General Schedule.”

She said the NSPS employees who converted a year ago or less will be the easiest to move back into the GS system. She added that the FMA’s biggest concern has to do with those feds who have exceeded Step 10 of their corresponding GS level.

“What to do with their pay is really what we’re on the lookout for. FMA recently released a position paper detailing some recommendations that we have to fix this problem, and I cannot tell you the amount of emails that have come through my inbox saying that this is a big problem. It is our belief that there are more than 4,000 employees who are going to experience this, as previously stated by the NSPS transition office.”

Klement said her organization is watching these issues carefully because the NSPS Transition Office has laid out such an aggressive schedule. She said FMA wants to make sure everyone is treated fairly.

Update: Whatever happened to those $250 payments or tax credits for federal and postal retirees?

Dan Adcock, legislative director of the National Active and Retired Federal Employees (NARFE), said retirees can file for it in the 2009 tax year.

He explained that the tax credit could cover most, or sometimes all, of the increase in health insurance premiums as they go up past the rate of inflation. In addition, it’s cheaper than a two percent COLA increase, because a COLA’s interest compounds, whereas tax credits do not.

Adcock said, because of this, NARFE is pushing for another credit in 2010.

In addition, his organization is carefully watching the overall issue of healthcare reform.

“Probably the most immediate thing is, of course, what’s going to happen on healthcare reform and how it affects [FEHBP]. Another issue is . . . this group of public sector retirees that don’t receive Social Security. They experienced a 14 percent increase in their Medicare Pat B premiums. Others who are on Social Security — other government workers and private sector workers who receive Social Securtiy were protected from that increase. So that is an issue that continues to be unresolved.”

Adcock said NARFE is also supporting premium conversation legislation that would allow federal retirees and military retirees to pay for their health insurance with pre-tax dollars.

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