NSPS Cost of Living Payout

[kannon8833]

This week we received information on how the cost of living adjustment was goint tobe paid out under NSPS. As I read it, 50% of the COLA will go to your salary, the other 50% to you in the form of a bonus.

So I thought - no big deal. But as with everything the gov't does, there is something behind the scenes. So I pulled up my trusty Excel spreadsheet and did some calculations.

Assumption: Salary $100K, COLA 3%

Calculations:

Base salary change = 50% x 3% times previous year's base salary.
Bonus = 50% x 3% x previous year's base salary.


Results:
1st year no difference between new NSPS and old method of all COLA is put into change in base salry. No sursprise.

But - subsequent year's the total payout between NSPS (base salry change and bonus) vs the old method shows that over 10 yrs, a difference of about $78K. Reason is that the subsequent year's have the 50% COLA in bonus being multiplies by a base salary that is only going up 1/2 the rate as in the old payout method.

Am I reading this wrong??? Thanks for your comments.

 

[Show-me]

Looks like your reading it right. Just another bait and switch. Looks good on the surface, but your salary is defiantly reduced.

Nice way to save money by cutting salaries. Some manager will get a big pay for performance bonus for coming up with and implementing that.

Welcome to the MB!!! By the way is that a knife I see sticking out of your back? :blink:

 

[nnuut]

Still a GS, not NSPS, this is good, but how long can it last? View attachment 2158

 

[EW_ret]

All 2009 COLA money for spiral 1.1 employees is going into performance pay. Spiral 2 employees will likely get 50% COLA for 2009. That is ashame that nothing will go for the yearly COLA. This is the primary reason for the NSPS. As you near retirement your salary will not increase at all because you are locked in at the upper area of pay band. You just get a bonus which does nothing for increasing you high three salary. This is the article at Goverment Executive: Pentagon changes policy for NSPS pay raises in 2008

 

[nnuut]

All 2009 COLA money for spiral 1.1 employees is going into performance pay. Spiral 2 employees will likely get 50% COLA for 2009. That is ashame that nothing will go for the yearly COLA. This is the primary reason for the NSPS. As you near retirement your salary will not increase at all because you are locked in at the upper area of pay band. You just get a bonus which does nothing for increasing you high three salary. This is the article at Goverment Executive: Pentagon changes policy for NSPS pay raises in 2008

Still a GS, not NSPS, this is good, but how long can it last? View attachment 2158

That does it, when they switch me over, I'm putting in my retirement papers. Then I'll get a real cost of living raise. :nuts:

 

[Wrngway]

Personally, I'm glad I'm a ways off from conversion to NSPS. Personally, I don't see how they can apply objective ratings to my job as a contract specialist where I'm working now.

I don't mind the idea of pay for performance, but the use of bonuses has a negative effect on your base salary and subsequently your retirement pension. The whole thing makes me very wary.

Also, I was under the impression that the pay bands would increase over time along with COLA. I suppose that if one was repeatedly rated higher than a 3 that you may bump up against the upper portion of the band.

 

[EW_ret]

I speak from personal experience of being in a Demonstration pay system the last eight years I was employed for U.S Navy. I received bonus points every year, but no continuing pay points because I was at the 90% percentile of the pay band. They would not give me that final 3% of pay (step 10 of GS 13) to reach 100% of band. That was reserved for favored employees in staff or group lead positions. The only reprieve is we did get the full COLA every year.

The NSPS pay-for-performance will take about three years for management to fine tune. The majority of employees will do fine until they reach the upper echelon of a pay band. Then they must get promoted, or lay dormant with no pay increases. Not everyone can get that next promotion. I know of young employees (6 to 8 years) who are doing great now, but in 10 or 15 years they will likely have a different opinion. They need to figure out how to get on the "favored employee" list. This requires office politics, and doing the right things that makes management look good. Its not how well you do your job that gets you ahead. It’s who you know that matters.

Personally, I'm glad I'm a ways off from conversion to NSPS. Personally, I don't see how they can apply objective ratings to my job as a contract specialist where I'm working now.

I don't mind the idea of pay for performance, but the use of bonuses has a negative effect on your base salary and subsequently your retirement pension. The whole thing makes me very wary.

Also, I was under the impression that the pay bands would increase over time along with COLA. I suppose that if one was repeatedly rated higher than a 3 that you may bump up against the upper portion of the band.

 

[nnuut]

I've been topped out for 15 years, don't see a promotion in the future, might as well retire NOW!!!!!!!!!

 

[Elgallo]

Personally, with NSPS ,I feel that the DOD has shot itself in the head yet again. My observation over my 30 year career is that the DOD, and the government as a whole has refined that into an art.

Current longtime employees will leave, and I do not believe the government going forward is going to be viewed as an employer young folks are going to want to work for if you ask me.

Anyone in the DOD now under NSPS, and who is over 40, needs to understand that this system discriminates against you due to your generally longer lengths of service, and your generally higher rates of pay. The DOD wants rid of folks like us and NSPS is their vehicle. This is inherent in the system.

We are also subtly being Constructively Discharged (you may want to google that legal term so one better understands it). By this I mean that because of the nature of the system and it's effect on your retirement you have no real incentive to stay and further enhance your high three. So you just up and quit or retire if you can. This is what they are hopeing for.

You can stay with the DOD under NSPS but that funny feeling in your back side ain't your hemorrhoids!

 

[Rick]

So if I am at the top of the pay Band with no future pay increases in sight why would I work for the Gov. past the 1st day I am eligble for retirement?

Stupid Hurts

 

[EW_ret]

You would continue to work for one of two reasons: you have to to pay the bills, or you like your job and the people you work with. The first reason is likely due to not saving enough in retirement accounts like TSP. The second reason you could live with, but is likey do to not having a life outside of work.

The primary reason for NSPS is to drive the federal pay scales down, and bust the unions. The government is just doing what companies have been doing for over thirty years. The political clot of big companies has grown and the unions have weakened.

So if I am at the top of the pay Band with no future pay increases in sight why would I work for the Gov. past the 1st day I am eligble for retirement?

Stupid Hurts

 

[Spaf]

Six reasons to continue working!

6. Less fish get caught.
5. The greens have fewer golfers.
4. More shoe polish is sold.
3. Grandkids get more home time.
2. Your wife has to weed the garden.
and the No 1 reason!
1. You don't have to give the dog a bath!........:laugh:

So if I am at the top of the pay Band with no future pay increases in sight why would I work for the Gov. past the 1st day I am eligble for retirement?

Stupid Hurts

 

[nnuut]

I have 34 and 1/2 years with the DOD. When I get time I'm going to make a list of how many times they have had sex with the Civil Servants sense I was hired, it's a long list! NSPS is just the last straw they have put on the poor camel's back!
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