WEBVTT NOTE This file was generated by Descript 00:00:00.039 --> 00:00:06.380 Lawrence: Welcome to The FED Weekly for 19-25 October 2025, your essential 00:00:06.380 --> 00:00:10.000 weekly briefing on the policies and proposals shaping your career, 00:00:10.319 --> 00:00:12.550 your benefits, and your retirement. 00:00:13.159 --> 00:00:17.360 Whether you’re a current federal employee navigating changes in the civil service, 00:00:17.670 --> 00:00:22.590 or a retiree keeping a close watch on your hard-earned pension and healthcare, this 00:00:22.590 --> 00:00:27.469 is your source for the latest news from Capitol Hill and the executive branch. 00:00:28.043 --> 00:00:32.344 Each week, we cut through the noise to bring you the critical updates on budget 00:00:32.344 --> 00:00:37.783 negotiations, pay raises, workforce policies, and the legislative battles that 00:00:37.783 --> 00:00:39.903 directly impact the federal community. 00:00:40.524 --> 00:00:43.873 Let's get you up to speed on what happened this past week. 00:00:49.565 --> 00:00:52.676 Issues That Affect Current and Retired Federal Workers 00:00:53.302 --> 00:00:57.442 The 2026 Healthcare Cost Shock and Open Season Preparation 00:00:58.026 --> 00:01:02.095 The most pressing financial concern facing the entire federal community 00:01:02.416 --> 00:01:06.656 is the soaring cost of health insurance for the 2026 plan year. 00:01:07.476 --> 00:01:12.566 While the premium rates were calculated earlier in October 2025, their immense 00:01:12.566 --> 00:01:17.435 scale formed the essential financial backdrop against which all retirement 00:01:17.435 --> 00:01:19.836 announcements this week were viewed. 00:01:20.510 --> 00:01:23.940 The Office of Personnel Management confirmed that federal health 00:01:23.940 --> 00:01:28.980 insurance premiums for 2026 will experience a sharp rise. 00:01:29.409 --> 00:01:32.840 For participants in the Federal Employees Health Benefits (FEHB) 00:01:32.840 --> 00:01:37.820 program, the enrollee’s share of premiums will increase by an average of 12.3 00:01:37.820 --> 00:01:38.330 percent. 00:01:38.970 --> 00:01:39.519 For U.S. 00:01:39.519 --> 00:01:42.750 Postal Service participants in the Postal Service Health Benefits 00:01:42.849 --> 00:01:46.890 (PSHB) program, the average enrollee increase is slightly lower but 00:01:46.890 --> 00:01:49.810 still extremely significant at 11.3 00:01:49.810 --> 00:01:50.310 percent. 00:01:50.800 --> 00:01:53.800 These figures confirm a difficult trajectory, as the 00:01:53.800 --> 00:01:57.250 2026 increase follows a 13.5 00:01:57.250 --> 00:02:00.790 percent spike in the enrollee share for 2025. 00:02:01.638 --> 00:02:05.347 OPM attributes this steep increase to several structural factors, 00:02:05.607 --> 00:02:08.937 including rising prescription drug and medical service costs. 00:02:09.588 --> 00:02:13.668 Furthermore, OPM points directly to the demographics of the program participants. 00:02:14.097 --> 00:02:18.678 The average age for the entire FEHB/PSHB enrollee population, including 00:02:18.678 --> 00:02:21.477 retirees, is approximately 60 years. 00:02:22.078 --> 00:02:26.098 Even among active employees, the median age stands at 47 years. 00:02:26.217 --> 00:02:31.008 This older demographic inherently drives up utilization and overall healthcare 00:02:31.008 --> 00:02:35.937 costs, placing a significant financial burden on the system that is now 00:02:35.937 --> 00:02:38.387 being passed directly to participants. 00:02:39.198 --> 00:02:43.827 This dynamic means the financial strain on the program is tied to the successful 00:02:43.827 --> 00:02:48.858 longevity of the federal workforce, which in turn necessitates the high premium 00:02:48.858 --> 00:02:53.597 increases that are drastically outpacing cost-of-living adjustments for annuitants. 00:02:54.318 --> 00:02:58.338 The steep premium increase sets a high-stakes scenario for the upcoming 00:02:58.338 --> 00:03:02.347 Federal Benefits Open Season, which OPM confirmed will run from 00:03:02.347 --> 00:03:05.707 November 10 through December 8, 2025. 00:03:06.358 --> 00:03:10.458 During this time, eligible federal employees and annuitants must review 00:03:10.458 --> 00:03:15.747 their plans, compare options, and make enrollment decisions for FEHB, PSHB, 00:03:15.997 --> 00:03:19.458 and the Federal Employees Dental and Vision Insurance Program (FEDVIP). 00:03:20.118 --> 00:03:26.497 For 2026, the FEHB program will offer 132 plan options across 47 carriers, while 00:03:26.497 --> 00:03:29.878 PSHB offers 75 options from 17 carriers. 00:03:30.471 --> 00:03:33.941 However, the Open Season will require immediate action for some, 00:03:34.162 --> 00:03:40.062 as OPM has also noted that six FEHB plans, one PSHB plan, and one FEDVIP 00:03:40.062 --> 00:03:42.801 plan will be discontinued in 2026. 00:03:43.352 --> 00:03:47.261 Enrollees in these specific plans must actively choose a new plan during the 00:03:47.261 --> 00:03:49.141 November/December enrollment period. 00:03:49.501 --> 00:03:53.432 On a positive note, some carriers are announcing benefit simplifications. 00:03:53.772 --> 00:03:58.571 For example, FEP Blue will eliminate the requirement for prior approval 00:03:58.571 --> 00:04:02.952 for outpatient hospice care and simplify rules for genetic testing, 00:04:03.272 --> 00:04:07.231 provided the enrollee shows signs or symptoms of the condition being tested. 00:04:07.955 --> 00:04:10.836 Administrative Instability and Medicare Claims 00:04:11.431 --> 00:04:16.861 The ongoing federal government shutdown, which commenced on October 1, 2025 00:04:17.361 --> 00:04:21.681 , continues to introduce instability into crucial federal benefit systems, 00:04:22.112 --> 00:04:26.331 as evidenced by administrative actions taken this week regarding Medicare. 00:04:27.121 --> 00:04:31.221 The Centers for Medicare & Medicaid Services (CMS) provided updated 00:04:31.221 --> 00:04:35.572 guidance to its Medicare Administrative Contractors (MACs) on the temporary 00:04:35.572 --> 00:04:37.051 holding of certain claims. 00:04:37.718 --> 00:04:41.658 This complexity arose because various legislative payment provisions, 00:04:41.968 --> 00:04:46.178 particularly those related to the Medicare Physician Fee Schedule and certain 00:04:46.178 --> 00:04:51.128 expanded services previously covered under the Full-Year Continuing Appropriations 00:04:51.128 --> 00:04:53.848 and Extensions Act, 2025 (Pub. 00:04:53.848 --> 00:04:54.118 L. 00:04:54.118 --> 00:04:56.657 119-4), had expired. 00:04:57.287 --> 00:05:01.898 In a move to relieve pressure on healthcare providers, CMS directed MACs 00:05:01.898 --> 00:05:06.638 to lift the claims hold for services provided on or after October 1, 2025, 00:05:07.018 --> 00:05:11.477 concerning several specific areas, including ground ambulance transport 00:05:11.477 --> 00:05:15.868 claims, Federally Qualified Health Center claims, and claims paid under 00:05:15.868 --> 00:05:18.008 the Medicare Physician Fee Schedule. 00:05:18.088 --> 00:05:22.817 This partial release of claims is vital for ensuring that providers continue 00:05:22.817 --> 00:05:27.297 to serve the millions of federal beneficiaries who rely on Medicare. 00:05:27.883 --> 00:05:30.544 However, not all services were released. 00:05:30.824 --> 00:05:35.974 CMS explicitly instructed MACs to continue temporarily holding claims for acute 00:05:35.974 --> 00:05:40.793 Hospital Care at Home and for certain telehealth services, specifically those 00:05:40.793 --> 00:05:45.964 that CMS cannot confirm are definitively for behavioral and mental health services. 00:05:46.454 --> 00:05:50.743 This highly specific claims guidance demonstrates how legislative funding 00:05:50.743 --> 00:05:55.313 gaps, even those unrelated to the immediate shutdown debate, can immediately 00:05:55.313 --> 00:05:57.104 affect the delivery of healthcare. 00:05:57.153 --> 00:06:02.244 The continued hold on specific telehealth services means that beneficiaries who rely 00:06:02.244 --> 00:06:07.114 on these non-behavioral virtual services face reduced access and uncertainty 00:06:07.114 --> 00:06:11.323 regarding payment, highlighting the profound operational vulnerability 00:06:11.323 --> 00:06:13.404 introduced by congressional inaction. 00:06:14.021 --> 00:06:16.511 Issues That Affect Retired Federal Workers 00:06:17.113 --> 00:06:21.364 The 2026 COLA Announcement: A Net Loss of Purchasing Power 00:06:21.909 --> 00:06:27.390 On Thursday, October 24, 2025, the Social Security Administration (SSA) 00:06:27.669 --> 00:06:32.919 formalized the 2026 Cost-of-Living Adjustment, finalizing the annual 00:06:32.919 --> 00:06:35.209 adjustment for federal retirees. 00:06:35.760 --> 00:06:39.509 This announcement immediately defined the financial prospects for the year ahead. 00:06:40.103 --> 00:06:43.663 SSA announced that Social Security benefits, along with annuities 00:06:43.663 --> 00:06:46.884 for retirees covered under the Civil Service Retirement System 00:06:46.884 --> 00:06:49.764 (CSRS), will increase by 2.8 00:06:49.764 --> 00:06:52.314 percent beginning in January 2026. 00:06:53.033 --> 00:06:57.113 This adjustment reflects a moderation in inflation compared to recent years. 00:06:57.544 --> 00:07:01.384 For Social Security recipients, this means an average retirement benefit 00:07:01.384 --> 00:07:04.904 increase of approximately $56 per month. 00:07:05.574 --> 00:07:09.423 Concurrently, SSA noted that the maximum amount of earnings subject to 00:07:09.423 --> 00:07:15.573 the Social Security tax (the taxable maximum) is slated to rise to $184,500 in 00:07:15.573 --> 00:07:20.453 January 2026, up from $176,100 in 2025. 00:07:21.085 --> 00:07:25.046 Critically, retirees under the Federal Employees Retirement System (FERS) 00:07:25.445 --> 00:07:27.775 will receive a lower increase of 2.0 00:07:27.775 --> 00:07:28.356 percent. 00:07:29.036 --> 00:07:32.495 This disparity, where CSRS retirees receive 0.8 00:07:32.495 --> 00:07:36.745 percent more than their FERS counterparts, represents the continuation of a 00:07:36.745 --> 00:07:41.105 long-standing financial penalty built into the FERS COLA formula. 00:07:41.731 --> 00:07:46.012 The overwhelming conclusion reached by analysts immediately following the October 00:07:46.012 --> 00:07:52.152 24, 2025, COLA announcement is that both CSRS and FERS retirees face a guaranteed 00:07:52.152 --> 00:07:54.851 net loss of purchasing power in 2026. 00:07:56.011 --> 00:07:56.742 The 2.8 00:07:56.742 --> 00:07:58.681 percent (CSRS) or 2.0 00:07:58.681 --> 00:08:02.431 percent (FERS) COLA fails to compensate for the average 12.3 00:08:02.431 --> 00:08:06.021 percent increase in the enrollee share of FEHB premiums. 00:08:06.639 --> 00:08:09.619 Legislative Efforts to Achieve FERS COLA Parity 00:08:10.187 --> 00:08:12.267 The announcement of the reduced 2.0 00:08:12.267 --> 00:08:15.957 percent COLA for FERS retirees relative to the 2.8 00:08:15.957 --> 00:08:20.767 percent CSRS increase reignited the debate over FERS benefit parity. 00:08:21.087 --> 00:08:25.177 The disparity is triggered by the statutory FERS COLA calculation mechanism: 00:08:25.528 --> 00:08:30.547 when the annual inflation rate, as measured by the CPI-W, falls between 2.01 00:08:30.547 --> 00:08:31.748 percent and 3.0 00:08:31.748 --> 00:08:34.977 percent, the FERS COLA is capped at 2.0 00:08:34.977 --> 00:08:35.467 percent. 00:08:35.977 --> 00:08:39.867 Since the 2026 inflation rate fell into this range, FERS 00:08:39.867 --> 00:08:41.578 retirees receive the lower rate. 00:08:42.195 --> 00:08:46.396 Federal employee organizations argue that this disparity imposes an arbitrary 00:08:46.396 --> 00:08:50.806 penalty that compounds over time, noting that FERS retirees who retired 00:08:50.806 --> 00:08:55.776 just four years ago have already lost over $1,000 to rising costs 00:08:56.056 --> 00:08:58.185 due to these compounded reductions. 00:08:58.886 --> 00:09:01.776 To combat this, the Equal COLA Act (H.R. 00:09:01.806 --> 00:09:04.105 866 in the House and S. 00:09:04.105 --> 00:09:07.796 3194 in the Senate), championed by Representative Gerry Connolly 00:09:07.796 --> 00:09:11.356 and Senator Alex Padilla, has gained renewed support this week. 00:09:11.976 --> 00:09:16.825 Endorsed by organizations like the National Treasury Employees Union (NTEU) 00:09:17.086 --> 00:09:21.915 and the American Federation of Government Employees (AFGE), the Equal COLA Act is 00:09:21.915 --> 00:09:26.706 specifically designed to eliminate this disparity, ensuring that FERS annuitants 00:09:26.706 --> 00:09:32.345 receive the same adjustment as CSRS retirees when inflation exceeds 2 percent. 00:09:33.236 --> 00:09:38.475 The legislative push following the October 24, 2025, announcement provides concrete 00:09:38.475 --> 00:09:43.725 evidence of the financial detriment caused by the current formula, thereby maximizing 00:09:43.725 --> 00:09:45.705 the political urgency for the bill. 00:09:46.343 --> 00:09:49.694 Ongoing Implementation of the Social Security Fairness Act 00:09:50.251 --> 00:09:53.781 In other news relevant to federal annuitants, the Social Security 00:09:53.781 --> 00:09:58.172 Administration provided implicit confirmation this week that implementation 00:09:58.172 --> 00:10:01.762 efforts continue for the Social Security Fairness Act, which was 00:10:01.762 --> 00:10:04.712 signed into law on January 5, 2025. 00:10:05.632 --> 00:10:10.252 This landmark legislation ended the Windfall Elimination Provision (WEP) 00:10:10.371 --> 00:10:14.882 and the Government Pension Offset (GPO), two policies that historically 00:10:14.882 --> 00:10:19.191 reduced or eliminated Social Security benefits for individuals who received 00:10:19.191 --> 00:10:24.252 a non-covered pension, such as many former federal employees under the CSRS. 00:10:24.875 --> 00:10:29.616 SSA confirmed that it began adjusting monthly benefit payments for individuals 00:10:29.616 --> 00:10:35.475 affected by WEP and GPO starting in February 2025 and is continuing the 00:10:35.475 --> 00:10:39.425 process of delivering additional accrued benefits resulting from the Act. 00:10:40.145 --> 00:10:44.506 While the law benefits many former public workers, SSA emphasizes that 00:10:44.506 --> 00:10:48.436 only individuals receiving a pension based on work not covered by Social 00:10:48.436 --> 00:10:53.395 Security—which includes certain CSRS federal retirees—will see benefit 00:10:53.395 --> 00:10:55.176 increases due to this repeal. 00:10:55.835 --> 00:10:58.426 Issues That Affect Current Federal Workers 00:10:59.037 --> 00:11:02.638 The Shutdown Gridlock: Failure of Emergency Pay Legislation 00:11:03.206 --> 00:11:07.735 The ongoing government shutdown since October 1, 2025 , remains 00:11:07.735 --> 00:11:11.005 the most immediate threat to the active federal workforce. 00:11:11.716 --> 00:11:17.105 On Wednesday, October 23, 2025, the Senate attempted to pass three 00:11:17.105 --> 00:11:21.936 competing bills aimed at ensuring federal employees and contractors would 00:11:21.936 --> 00:11:26.166 be paid during the funding lapse, but all three efforts failed to advance. 00:11:26.749 --> 00:11:30.299 The failure highlighted the political gridlock over defining 00:11:30.299 --> 00:11:34.259 who constitutes an essential recipient of pay during a shutdown: 00:11:34.874 --> 00:11:35.043 1. 00:11:35.043 --> 00:11:36.913 The Shutdown Fairness Act (S. 00:11:36.913 --> 00:11:37.623 3012) 00:11:38.271 --> 00:11:42.791 Introduced by Senator Ron Johnson (R-WI), this bill proposed to pay only 00:11:42.791 --> 00:11:47.511 the "excepted" federal employees—those mandated to report to work during the 00:11:47.881 --> 00:11:51.612 shutdown—along with specific contractors and active duty military members. 00:11:52.131 --> 00:11:53.421 Crucially, S. 00:11:53.421 --> 00:11:57.811 3012 explicitly excluded furloughed employees from immediate payment. 00:11:58.242 --> 00:12:01.971 The bill failed to pass the Senate by a vote of 54-45. 00:12:02.141 --> 00:12:06.652 Its rejection stemmed from legislative concerns that the bill would grant 00:12:06.652 --> 00:12:10.371 the President undue authority to selectively determine which 00:12:10.371 --> 00:12:14.792 employees receive compensation, disregarding the financial hardship 00:12:14.792 --> 00:12:16.572 faced by the furloughed workforce. 00:12:17.226 --> 00:12:17.375 2. 00:12:17.375 --> 00:12:19.576 The True Shutdown Fairness Act (S. 00:12:19.576 --> 00:12:20.556 3039) 00:12:21.186 --> 00:12:23.965 Senator Chris Van Hollen (D-MD) introduced S. 00:12:23.965 --> 00:12:28.916 3039, a comprehensive measure that sought to pay all federal employees—both 00:12:29.495 --> 00:12:34.005 those working ("excepted") and those placed on furlough—in addition to 00:12:34.005 --> 00:12:36.285 servicemembers and federal contractors. 00:12:36.726 --> 00:12:40.396 This bill also contained specific provisions designed to prevent the 00:12:40.396 --> 00:12:45.496 administration from attempting mass firings, or Reduction in Force (RIFs), 00:12:45.775 --> 00:12:47.886 while the government remained shut down. 00:12:47.976 --> 00:12:52.176 This protective language directly corresponds to legal actions occurring 00:12:52.176 --> 00:12:56.816 during this period, including a court order issued around October 20, 2025, 00:12:57.235 --> 00:13:02.205 that halted an administration’s attempt at mass firings related to shutdown RIFs. 00:13:02.205 --> 00:13:02.665 S. 00:13:03.216 --> 00:13:07.805 3039 failed when Senator Johnson objected to a request for Unanimous 00:13:07.805 --> 00:13:10.935 Consent (UC), preventing its passage. 00:13:11.646 --> 00:13:11.995 3. 00:13:11.995 --> 00:13:14.956 The Military and Federal Employee Protection Act (S. 00:13:14.956 --> 00:13:16.025 3043) 00:13:16.627 --> 00:13:17.788 A third bill, S. 00:13:17.788 --> 00:13:22.908 3043, introduced by Senator Gary Peters (D-MI), also sought to pay 00:13:22.908 --> 00:13:25.248 all employees and military personnel. 00:13:25.717 --> 00:13:30.057 However, its pay provisions were limited, only covering the duration from October 00:13:30.057 --> 00:13:32.547 1st up to the date the bill was enacted. 00:13:33.127 --> 00:13:36.117 This bill also failed after Senator Johnson objected to the 00:13:36.117 --> 00:13:38.438 UC request, blocking the measure. 00:13:39.009 --> 00:13:44.909 The failure of all three proposals on October 23, 2025, demonstrated that 00:13:44.909 --> 00:13:49.169 ensuring basic pay for the federal workforce remains a legislative 00:13:49.169 --> 00:13:53.809 commodity rather than an automatic obligation during a funding impasse. 00:13:54.290 --> 00:13:57.799 Union leaders continue to cite these failures as evidence that 00:13:57.799 --> 00:14:01.129 federal employees are being improperly used as bargaining 00:14:01.129 --> 00:14:03.260 tools in political budget debates. 00:14:04.010 --> 00:14:08.679 OPM’s Digital Transformation: Consolidating 119 Human Capital Systems 00:14:09.251 --> 00:14:14.601 On Monday, October 20, 2025, OPM Director Scott Kupor announced a 00:14:14.601 --> 00:14:19.172 massive, multi-year technological initiative intended to fundamentally 00:14:19.172 --> 00:14:22.111 transform the government’s approach to talent management. 00:14:22.501 --> 00:14:27.392 This plan, described by Kupor as a "big package," aims to solve deep-rooted 00:14:27.392 --> 00:14:31.361 administrative inefficiencies that affect the workforce from the day they 00:14:31.361 --> 00:14:33.892 are hired until the day they retire. 00:14:34.718 --> 00:14:40.477 The problem, as outlined by OPM, is the current existence of 119 distinct 00:14:40.477 --> 00:14:45.177 core Human Capital Management (HCM) systems across the federal government. 00:14:45.668 --> 00:14:49.358 These systems do not integrate, leading to an "inordinate amount of money" 00:14:49.448 --> 00:14:53.268 spent by taxpayers and a complete lack of a single, reliable source of 00:14:53.268 --> 00:14:55.268 truth for basic employee information. 00:14:55.947 --> 00:15:00.578 Consequently, OPM cannot easily track metrics such as accurate payroll data 00:15:00.578 --> 00:15:04.057 by sub-department, the true count of positions in an organization, 00:15:04.307 --> 00:15:06.357 or managerial span of control. 00:15:06.977 --> 00:15:10.787 The fragmentation severely impacts the retirement process. 00:15:11.518 --> 00:15:15.357 OPM currently spends excessive time and resources coordinating with multiple 00:15:15.357 --> 00:15:19.998 agency HR staff to manually assemble a retiring employee’s complete work 00:15:20.807 --> 00:15:22.567 history—often called the "golden file." 00:15:23.148 --> 00:15:27.728 This manual process is error-prone, costly, and directly contributes 00:15:27.728 --> 00:15:31.378 to long, frustrating delays for new annuitants awaiting their benefits. 00:15:31.991 --> 00:15:35.602 The solution proposed by OPM is the development of a single, 00:15:35.832 --> 00:15:38.801 pan-government core HCM system. 00:15:39.182 --> 00:15:43.601 This consolidation is projected to drive significant per-user cost savings 00:15:43.891 --> 00:15:48.021 and provide the government with full, real-time visibility into its workforce. 00:15:48.351 --> 00:15:52.331 By replacing the duplicative, outdated technology, OPM aims to 00:15:52.331 --> 00:15:57.021 free the approximately 44,000 HR professionals (who cost about $5.5 00:15:57.062 --> 00:16:00.312 billion annually) to focus on talent development and 00:16:00.312 --> 00:16:04.251 performance management, rather than navigating technological thickets. 00:16:04.801 --> 00:16:09.361 The agency immediately launched a process to invite industry proposals on how to 00:16:09.361 --> 00:16:11.321 achieve this government-wide objective. 00:16:11.942 --> 00:16:16.292 This shift, while focused on active employees, holds profound long-term 00:16:16.292 --> 00:16:20.321 implications for future retirees by promising to automate and 00:16:20.321 --> 00:16:24.152 accelerate the currently agonizing retirement processing timeline. 00:16:24.811 --> 00:16:27.611 Legislative Debate: Traditional Pay Raise vs. 00:16:27.611 --> 00:16:28.911 Performance-Based Pay 00:16:29.477 --> 00:16:34.257 The discussion around compensation for 2026 for active federal workers is 00:16:34.257 --> 00:16:38.847 currently split between a union-backed push for a standard increase and 00:16:38.847 --> 00:16:42.897 a radical legislative proposal to tie pay entirely to performance. 00:16:43.499 --> 00:16:45.150 The FAIR Act and Pay Parity 00:16:45.758 --> 00:16:50.488 Federal employee organizations, including AFGE and NTEU, continue to 00:16:50.488 --> 00:16:54.038 advocate for the Federal Adjustment of Income Rates (FAIR) Act. 00:16:54.417 --> 00:16:57.177 This endorsed legislation would grant federal employees an 00:16:57.177 --> 00:16:59.398 average pay adjustment of 4.3 00:16:59.398 --> 00:17:01.297 percent in 2026. 00:17:01.987 --> 00:17:05.837 The rationale behind this push stems from evidence suggesting that federal 00:17:05.837 --> 00:17:10.688 salaries lag private sector salaries for similar jobs by an average of 00:17:10.688 --> 00:17:15.128 27 percent, a gap that severely hinders recruitment and retention 00:17:15.128 --> 00:17:17.558 efforts across government agencies. 00:17:18.161 --> 00:17:22.731 The Federal Employee Performance and Accountability Act of 2025 (H.R. 00:17:22.731 --> 00:17:23.592 201) 00:17:24.263 --> 00:17:27.644 In sharp contrast to the FAIR Act, the House bill H.R. 00:17:27.644 --> 00:17:32.593 201 proposes a five-year pilot program that completely upends the 00:17:32.593 --> 00:17:36.753 traditional General Schedule (GS) compensation model for certain employees. 00:17:37.339 --> 00:17:41.819 This program, titled the Federal Employee Performance and Accountability Act of 00:17:41.819 --> 00:17:48.999 2025, mandates participation from 1% to 10% of eligible employees (GS-11 00:17:48.999 --> 00:17:53.629 and above) whose positions feature clearly measurable performance criteria. 00:17:54.099 --> 00:17:58.269 A key provision dictates that participants in this pilot are made ineligible 00:17:58.269 --> 00:18:01.939 for the annual across-the-board and locality-based pay increases 00:18:01.939 --> 00:18:03.650 authorized under current law. 00:18:04.418 --> 00:18:05.238 Under the H.R. 00:18:05.238 --> 00:18:10.197 201 structure, pay changes are rigidly tied to the employee's performance 00:18:10.197 --> 00:18:11.878 rating from the preceding year: 00:18:12.487 --> 00:18:16.768 Significantly Exceeded Performance Metrics: The employee’s pay must 00:18:16.768 --> 00:18:18.788 be increased by up to 10 percent. 00:18:19.365 --> 00:18:23.175 Met Performance Metrics: The employee’s pay may not be increased. 00:18:23.750 --> 00:18:28.259 Below Expectations: The employee’s pay must be reduced by 10 percent. 00:18:28.895 --> 00:18:33.395 This proposed legislation introduces high financial risk, where a successful 00:18:33.395 --> 00:18:37.685 employee could rapidly advance, but an employee rated as simply "Meets 00:18:37.685 --> 00:18:42.345 Expectations" would receive zero inflationary adjustment, and an 00:18:42.345 --> 00:18:46.726 underperforming employee would face a mandatory 10 percent reduction. 00:18:47.382 --> 00:18:49.371 The administrative viability of H.R. 00:18:49.371 --> 00:18:53.522 201 is implicitly linked to the success of OPM’s concurrent 00:18:53.522 --> 00:18:55.762 HCM consolidation announcement. 00:18:56.602 --> 00:18:57.121 For H.R. 00:18:57.121 --> 00:19:02.111 201 to succeed, agencies must establish and track "clearly measurable performance 00:19:02.111 --> 00:19:04.291 criteria" and productivity metrics. 00:19:04.932 --> 00:19:08.862 Given OPM Director Kupor’s finding that the government currently operates 00:19:08.862 --> 00:19:13.922 119 fragmented systems and lacks a single source of truth for workforce 00:19:13.922 --> 00:19:18.081 data , the effective implementation of a high-stakes, performance-based 00:19:18.182 --> 00:19:22.831 pay system would be nearly impossible without the simultaneous overhaul 00:19:22.962 --> 00:19:26.771 of the underlying IT infrastructure announced just days earlier. 00:19:27.471 --> 00:19:31.611 The proposed legislative reform, therefore, demands a massive technological 00:19:31.611 --> 00:19:34.131 investment simply to be administrable. 00:19:34.767 --> 00:19:37.817 And that’s a wrap on this week’s Federal Workforce Roundup. 00:19:38.398 --> 00:19:43.648 The landscape for federal employees and retirees is constantly shifting, 00:19:44.108 --> 00:19:48.677 with major decisions being made about everything from pay and job security 00:19:48.847 --> 00:19:52.498 to retirement benefits and the very structure of the civil service. 00:19:53.148 --> 00:19:54.908 Staying informed is your best tool. 00:19:55.398 --> 00:19:59.537 Be sure to subscribe wherever you get your podcasts, so you never miss an update. 00:20:00.107 --> 00:20:01.158 Thanks for tuning in. 00:20:01.408 --> 00:20:04.187 We’ll be back next week to track the latest developments 00:20:04.187 --> 00:20:05.468 and what they mean for you. 00:20:05.798 --> 00:20:08.967 Until then, stay engaged and be well.