Government Executive Magazine - 9/7/00 Pay and Benefits Watch: More pay on the way

Get ready to widen your wallet. Here's a look at why federal employees will see more take-home pay in fiscal 2001:

Pay Raise
President Clinton did not exercise his authority to set a different pay raise for next year, so the 3.7 percent across-the-board increase that he proposed in the fiscal 2001 budget is set. On average, the increase will give federal employees an extra $1,962 next year.

Locality Pay
Later this year, the Clinton administration will decide how to divide the 3.7 percent increase between an across-the-board increase and an increase in locality pay based on the cost of labor in local areas. Last year, employees received an average 1 percent locality pay raise.

Retirement Rollback
The fiscal 2001 Treasury-Postal and general government appropriations bill includes legislation that would repeal higher contributions towards retirement that federal employees have been paying since January 1999. The higher rates were required by the Balanced Budget Act of 1997. According to the Office of Personnel Management, employees will save on average of $262 per year in their retirement contributions when rates are restored to pre-1999 levels. Those levels are 7 percent for employees covered by the Civil Service Retirement System and 0.8 percent for employees covered by the Federal Employees Retirement System.

Health Premiums
Federal employees should save $434 per year on average on their federal income taxes next year under a plan to remove health insurance costs from federal employees' taxable income. That plan is set to go into effect in early October, according to OPM.

On Time

Finally, pay checks should be returned to their normal schedule this year as the fiscal 2001 budget reverses action taken last year to delay into 2001 the last fiscal 2000 paycheck of many federal employees.

The conference report on the fiscal 2001 Treasury-Postal and general government appropriations bill is expected to be debated this week.