Obama Budget Pushes Paid Parental Leave, Phased Retirement

President Obama’s fiscal 2016 budget supports increasing flexibility for civilian federal workers through benefits like paid parental leave and phased retirement, in addition to a 1.3 percent pay raise for next year.

The budget document reiterated the Obama administration’s proposal to offer federal workers paid leave to care for the birth, adoption, or foster placement of a child. The goal is to establish a “federal family leave policy that is on par with leading private-sector companies and other industrialized nations,” the document stated.

House Democrats last week reintroduced legislation that would give new federal parents six weeks of paid leave. Earlier this month, Obama signed an executive order allowing feds to use up to six weeks of paid sick leave up front to care for a new child or an ill family member. Now, federal workers can take up to 12 weeks of unpaid leave through the 1993 Family Leave Act, or tap their accrued sick and annual leave to avoid three months without a paycheck.

The $4 trillion budget released Monday also plugged phased retirement, despite the fact that no agency has implemented it yet, and some have said they might never offer the benefit. Phased retirement allows eligible feds to work 20 hours per week, receiving half their pay as well as half their retirement annuity, while mentoring their successors.

“These efforts are essential for developing a nimble, efficient 21^st century workforce that can help ensure agencies achieve their important missions under a tightening fiscal climate,” the budget document said of phased retirement. The Office of Personnel Management issued final rules on partial retirement in August, more than two years after Congress passed the law, and the agency said eligible federal employees could submit applications starting on Nov. 6, 2014. But the reality is that most feds will have a longer wait because individual agencies have to devise their own plans for implementing phased retirement that meet the needs of their missions as well as collective bargaining agreements.

Obama’s proposed budget acknowledged the sacrifices the federal workforce has made over the last few years – pay freezes and increased contributions to retirement benefits, for example – coupled with furloughs resulting from sequestration and the 2013 government shutdown.

“During five years of delayed budgets, sequestration, pay freezes and award caps, federal employees have come in every day to serve their country,” the White House document said. “In 2014 alone, federal employees addressed a wide range of national priorities – from responding to the Ebola outbreak to working to end veterans’ homelessness to implementing the Affordable Care Act…. Thanks in part to the efforts of federal employees, the economy is recovering.”

Some federal employee advocates were not thrilled with the president’s 1.3 percent pay raise proposal, which is slightly more than the 1 percent raise in 2014 and 2015. Before that, federal civilian employees were under a three-year pay freeze. “Let’s be real – a 1.3 percent pay raise will be eaten up by higher costs for groceries, health care and other essentials,” said American Federation of Government Employees National President J. David Cox Sr., in a statement. “Like other middle-class workers, federal employees need a meaningful pay raise to make up for years of stagnant wages, and unfortunately the president’s proposal falls short.” The National Treasury Employees Union called the recommended 1.3 percent pay boost “inadequate,” but applauded the White House for seeking an end to sequestration, which returns to full strength in fiscal 2016.

The National Active and Retired Federal Employees Association said that it was “time to start closing the growing gap between public- and private-sector wages” and the recommended 1.3 percent pay bump doesn’t go far enough in doing that. Still, NARFE praised the administration for not including in its fiscal 2016 budget proposals a switch to the chained CPI for retirees’ annual cost-of-living adjustments, or increases in how much current feds contribute to their pensions. Those ideas have been part of past Obama budgets.

The fiscal 2016 budget proposal includes a lot of data on the size and compensation of the federal workforce over the decades, as well as comparisons between public- and private-sector pay for certain occupations. The push for increased flexibility for federal workers to improve recruitment and retention, including “breaking down barriers” to telework, indicate that the administration is emphasizing better benefits rather than seeking major boosts in pay. The latter has been the subject of much debate for years – namely, whether federal employees are over- or underpaid compared to their private sector counterparts.

“Compensation for highly educated federal workers (or those in more complex jobs) is lower than for comparable workers in the private sector, whereas the Congressional Budget Office found the opposite for less educated workers,” said the fiscal 2016 budget analysis. “These findings suggest that across-the-board compensation increases or cuts may not be the most efficient use of federal resources.”

On the military personnel side, Obama also is seeking a 1.3 percent pay raise for troops next year. The White House also continues to call for reforming the military compensation system to rein in ballooning costs while providing “robust” pay and benefits to honor service members and their families. Some proposals echo recommendations from the recently-released Military Compensation and Retirement Modernization Commission report, including auto-enrolling service members into the Thrift Savings Plan. Other proposals, such as creating an enrollment fee for new TRICARE for Life beneficiaries and tying TRICARE fees to retired recipients’ income, have been part of previous Obama budgets.

The fiscal 2016 budget document also calls for replacing TRICARE by Jan. 1, 2017, with a “consolidated health plan that incorporates cost-sharing for certain members.” The commission has recommended moving family members and some retirees out of TRICARE and onto health insurance plans in the private sector, similar to the menu of choices civilian federal employees have under the coverage. 

The budget proposes a 1.5 percent increase in the basic housing allowance for service members, and a 3.4 percent increase in the basic subsistence allowance. 

(Image via Photographee.eu / Shutterstock.com)