July 8, 2008

 

A summary of daily news relevant to the federal workforce produced by the Partnership for Public Service.

1. Register Today for the Sixth Annual Public Service Town Hall and Career Fair
2. Retirements Slowing Down
3. Border Officers Get Retirement Benefits Boost
4. Fed, SEC Team Up On Bank Oversight

Register Today for the Sixth Annual Public Service Town Hall and Career Fair

The Partnership for Public Service

The Partnership's sixth annual Public Service Town Hall and Career Fair will bring hundreds of interns and young professionals together with federal recruiters from more than 50 government agencies. Participants will hear from young, inspiring government employees who are making a difference through their federal service. With more than half of the federal government retiring in the next five years, the town hall will carry a simple, but important message to young people throughout the country:  Uncle Sam needs you!

Wednesday, July 16, 5:30p.m.
The National Building Museum

Encourage the interns, students and young professionals you know to RSVP at ourpublicservice.org/careerfair.
If you would like to register your agency, please email Katelin Kennedy at kkennedy@ourpublicservice.org.

Retirements Slowing Down

Federal Times
By Stephen Losey
 
After years of seeing retirements regularly outpace official projections, 2006 and 2007 witnessed a shift: Fewer federal employees retired than expected.

And for the first time in at least five years, the Office of Personnel Management this year revised its future retirement projections downward. The reason: the souring economy.

Tamara Adams, a human resources manager at the General Services Administration office in Chicago, noticed the change.

"It's not a wave," she said. "It's just a slow trickle."

Experts like John Palguta, vice president for policy at the Partnership for Public Service, attribute the trend to $4-a-gallon gas, the housing market crash and turmoil in the stock markets that has left federal employees’ Thrift Savings Plan (TSP) funds battered.

"Look at the news," he said. "If I'm counting on a decent sum in my TSP and I know my balance has been going down, I may hang in for another year or two to see if the economy improves."

Also, it's not a good time to find a second career or a part-time job, which many retirees do as they ease into their golden years.

The ones most able to ignore the current economic problems are those who possess specialized and marketable skills, or who are in the higher-income brackets and can afford to weather the downturn, experts say.

"People who have skills that are more marketable are more likely to retire," said John Crum, acting director of the Merit Systems Protection Board’s Office of Policy and Evaluation. "This lull isn't likely to affect people with information technology and other tech skills."

Palguta said this is likely one big reason why members of the Senior Executive Service are still retiring at even greater rates than OPM projects.

"Part of being SES is that you've demonstrated management capability that may be more transferable than someone in a line job," Palguta said. "They may believe that even in an economic downturn, they have more options available to them, and they’re probably right."

But OPM isn't sure that this lull is significant, and cautions agencies about growing complacent and neglecting their future work-force planning.

"These retirements will happen because people will only work for so long," said Nancy Kichak, OPM's associate director for strategic human resource policy. "On average, people work for another four years after they become eligible for retirement. I can’t say they won't work five years instead because of economics, but I can tell you they won’t work for another 20 years."

Federal managers who spoke to Federal Times agree, even if some are suspicious of the retirement wave hype. They say that even if some federal employees are putting off retirement, their agencies must use that time to better prepare the next generation of employees to take over.

Delayed retirements could give veteran employees more time to mentor younger employees, and agencies can collect their expertise through knowledge-retention programs that will let employees access crucial information years from now.

"We're making sure we organize things better," said Thomas Marks, a supervisor for the Environmental Protection Agency's Region 5 Superfund division in Chicago. "We're collecting good written processes and procedures. As jobs change, people put down in writing what they do so they can pass it on to the people taking their place."

Marks knows of at least two people in his office who are putting off retirement for now. Such delays could help Marks’ division better manage its staff.

As the Superfund program matures over the next few years, Marks said it will need fewer people. If employees retire quickly, Marks would have to hire younger employees to replace them, and then would not have enough work for them to do in a few years. But if those veteran employees hang on for a few more years, he said, they could coordinate their retirements and leave as their workload shrinks.

Crum said that delays give agencies more time to find new employees to replace retirees.

"It's also giving them some time to ripen," Crum said. "If you have more of a window, that helps. I don't think the window will be huge, but it may be out there."

There could be some downsides to delayed retirements. Palguta warns that an up-and-coming employee could grow impatient and go elsewhere if the veteran employee he is supposed to replace keeps putting off retirement.

"What you can do in that situation is start looking for ways to use the old guy differently so the new person can start exercising some authorities," Palguta said. "Find a way for the new guy to be engaged and have plenty of work to do, and in the meantime, use the retiring guy for mentoring. If left unaddressed, [delayed retirements] could be a problem, but a good manager with a good HR staff can turn it into a positive." 

 

Border Officers Get Retirement Benefits Boost

Government Executive
By Brittany Ballenstedt

A measure that took effect on Sunday will grant more than 18,000 Customs and Border Protection officers enhanced retirement benefits.

The provision, passed by Congress late last year as part of a catchall spending bill, gives CBP officers law enforcement status, increasing their pension benefits and allowing them to retire earlier.

Federal employees classified as law enforcement officers can retire at age 50 after 20 years of service or at any age after 25 years of service, whereas other federal employees must put in 30 or more years of service and be at least 55 years old when they retire.

There is one caveat; the enhanced benefits are not retroactive. This means the new retirement eligibility criteria will apply only to officers hired after July 6. Other officers will still begin to receive the pension boost, however, and that is expected to translate to thousands of dollars in additional benefits annually when compounded.

The Bush administration opposes granting law enforcement status to CBP officers, and in his fiscal 2009 budget request, the president sought to repeal the program. The administration claims that CBP officers do not meet the definition of law enforcement officers and therefore should not qualify for the early retirement option.

But the House Appropriations Committee rejected Bush's proposal and in late June approved $217 million to continue the retirement program for CBP officers in fiscal 2009. The bill also provides funding for an additional 100 CBP agriculture specialists and 734 more CBP officers -- significantly more than the 539 proposed by President Bush.

In January, CBP Assistant Commissioner Robert Hosenfeld praised Congress' passage of the retirement program, noting that the enhanced benefits "will aid CBP's recruitment and retention of the best and brightest officers and build a vigorous workforce for the future."

The National Treasury Employees Union, which has led a years-long fight to secure enhanced benefits for CBP officers, praised the launch of the new retirement program, noting that the benefits are "long-delayed and unfairly denied."

"It has taken a long time, but it was the right thing to do from the beginning," NTEU President Colleen Kelley said. "These employees put their lives at risk for the rest of us every day. LEO status and benefits are well-deserved recognition for their efforts."

Fed, SEC Team Up On Bank Oversight

The Washington Post
By Neil Irwin

Two top regulators reached a formal agreement to coordinate their oversight of Wall Street yesterday, as the government attempts to build a new system to guard against a meltdown of the financial system.

Leaders of the Federal Reserve and the Securities and Exchange Commission signed a memorandum of understanding that explicitly allows for the two agencies to share information about the inner workings of investment banks. The move formalizes what has been a reality since the rescue of Bear Stearns in March and marks an end to an era in which the two agencies held information close to their vests.

"It requires consultation between the SEC and the Fed in areas that the SEC had thought previously were its exclusive business. But the world has changed," said David Becker, a partner at law firm Cleary, Gottlieb, Steen & Hamilton and former general counsel at the SEC. "This mostly ratifies facts on the ground."

The agreement is a baby step in a broader path toward changing the way the nation's financial system is regulated. The Bush administration proposes streamlining the oversight of banks and investment firms while giving the Fed new powers to guard against financial crises. Fed Chairman Ben S. Bernanke will address the topic in a speech today and in congressional testimony Thursday.

Bernanke is considering whether to extend a special lending program for investment banks, implemented during the Bear Stearns episode, that is scheduled to end in September. He is considering extending that program beyond the end of the year if the strains in financial markets continue.

Currently, investment banks voluntarily agree to have the SEC as their primary regulator, a situation that Bernanke worries weakens the SEC's oversight ability. In his view, and that of many experts outside the government, Congress should grant stronger legal authority to those who regulate investment firms.

Bernanke also favors exploring new procedures by which the government can ensure that if investment firms fail, they could do so in a way that inflicts less damage on the overall economy. Such a formal procedure, which is in place for regular banks, might have made the dissolution of Bear Stearns more orderly.

The Fed chairman is open to taking on formal responsibility for the stability of the financial system, which the Bush administration advocates, but to do so the central bank wants the ability to gather information and order changes in a wide range of financial companies.

Any major overhaul will require changes to the law -- a sprawling and complicated task that is unlikely to happen this year. Yesterday's agreement shows how the agencies involved are trying to find ways to prevent a recurrence of the financial crisis in March using the tools and legal authority they already have.

"Once you try to do a major overhaul, you get into a lot of turf wars and you can get very bogged down," said Martin Neil Baily, a senior fellow at the Brookings Institution. "This is working within the existing system, which can be a more effective way to go."

The SEC-Fed agreement came about because of what happened in March, when the Fed agreed to make an emergency loan to Bear Stearns, which otherwise would have filed for sudden bankruptcy, and then gave financial backing to the acquisition of Bear Stearns two days later. The Fed also made loans available to all investment banks, to prevent the run on the bank that enveloped Bear Stearns from bringing down other major firms.

As it made those loans, leaders of the Fed insisted they get new access to the inner workings of the investment firms so as to be sure that their loans would be paid back. New York Fed employees have been working alongside SEC regulators in the large banks since March, doing just such monitoring.

Under current law, the SEC is the primary regulator of investment banks, such as Goldman Sachs and Morgan Stanley, while the Fed has explicit authority over commercial banks such as Citigroup and Bank of America. But that distinction has become increasingly blurry in a world in which commercial banks have big investment banking arms and investment firms are so intertwined in world markets that their downfall could threaten the world economy.

According to the new agreement, the SEC will provide the Fed with "information and analysis regarding the financial condition, risk management systems, internal controls and capital, liquidity and funding resources" of the firms it oversees, and the Fed will do likewise for the SEC.

"This agreement will permit the expanded sharing of information on a confidential basis," said SEC Chairman Christopher Cox in a statement, "and help ensure that regulated entities receive a coherent message from Uncle Sam."

Congressional Democrats praised the agreement while saying that there is still major work to be done to make financial regulation more effective.