> Wang was working under streamlined critical pay authority the agency has had since its landmark 1998 restructuring. It gave the IRS 40 slots under which it could pay temporary, full-time employees higher than GS rates. Former Commissioner John Koskinen pointed out Congress did not re-up this authority in 2013, despite his entreaties to former Congressman Jason Chaffetz’s Committee on Oversight and Government Reform.
> He says he applied to become a GS-15 or Senior Executive Service member so he could see through the assembler-to-Java project. But his approval didn’t come through until a week before his employment authority expired. By then he’d accepted another job.
So, basically: the IRS can't fix its software because it can't pay market rates for software engineers. It can't pay market rates for software engineers not because it lacks the budget for it, but because Congress won't let them. This is how it ends up with huge armies of bureaucrats doing things that could be easily automated.
The GS-15 range for the DC area is $135k-164k. For federal government employees, salary only represents about half of their total compensation, which includes a lifetime inflation adjusted pension and medical benefits.
...and any sizable employer offers healthcare and a 401(k). So at best you could say they're betting on an inflation-adjusted pension? That's not going to sell many candidates.
I'm not from the US, but I'm guessing a 401(k) pension scheme is defined contribution: you pay in cash in a tax advantaged way, and the risk that the pension scheme loses money or doesn't make enough of a return to support you in retirement is borne by you.
I'm also guessing that the government's pension scheme is defined benefit: the risk that the scheme loses money is borne by the government, and you get your pre-determined payout unless the government goes bankrupt.
Defined contribution pensions are typically much more valuable, since they can obviate the need to save for retirement (or at least part of that need).
In the UK, it's extremely competitive to become a civil servant despite the mediocre pay. The reason is security, both in your job and in retirement.
Yes that's right, but you've got the terms reversed. Defined contribution is the one where you bear the risk, and defined benefit is where the government bears the risk.
They are only guaranteed until some elected official decides to give you a haircut on your deferred paychecks (Which is what a pension is), right as you're about to retire. (Or shortly after you do.)
I'd hedge, and prefer splitting my money between both.
Unions? Government employees? They aren't even on the top ten of 'most powerful organizations in the country.' Not for the past four decades - Ronald Reagan fixed that glitch.
What's going to happen is that paid shills will start publishing op-eds citing a handfull of executives and upper managers who gamed the pension payments system with overtime, resulting in massive payouts for themselves, drum up public outrage about lazy government workers, and pass an across-the-board haircut. It will, as always, be turned into a red vs blue issue - and half the time, red's in charge.
But you exchange a lower salary for that government job, which makes saving for your 401k & co less effective. There is also the entire calculation of the expected value of money now vs 30 years from now.
The inflation adjusted pension, which roughly works out to 33% of your final salary, is in addition to the federal 401k program and social security.
The fact that it is inflation adjusted is critical. To calculate the value of the pension plan, you would need to compute the NPV of an infinite series (assuming advancing healthcare).
The medical benefits are also quite significant and, for lower grade workers, will dwarf the value of the pension.
Government employees tend to be highly risk averse. This was the insight behind the founding of GEICO, the Government Employees Insurance Company, which used to write policies for public employees only.
> For federal government employees, salary only represents about half of their total compensation, which includes a lifetime inflation adjusted pension and medical benefits.
A relative of mine has been a federal employee for over a decade and gets neither of those. She has a TSP (like a government 401k) and that's it.
Maybe some federal employees got something like this at some point, but it's very misleading to just drop that into conversation like it's true across the board.
Your relative either doesn't have an understanding of her retirement plan or isn't telling you everything. One component of the FERS is the "Basic Benefit Plan" which is the pension.
> For federal government employees, salary only represents about half of their total compensation, which includes a lifetime inflation adjusted pension and medical benefits.
No, nowadays you have to pay in for retirement and medical benefits. Retirement money is partially matched, but health care generally is no cheaper than a good private plan.
What kind of medical benefits are we talking about? How many years do you have to work for the government to get it?
My employer's healthcare plan costs my employer ~20k/year as long as I'm employed, more if I had children, yet for some reason, nobody ever counts that as part of AMAFAGOPL salaries.
I wasn't sure if "AMAFAGOPL" was a real acronym or just something you made up, so I searched for it on Google. The only result was a link to your comment - posted just 12 minutes ago. Google is getting (scary) good at indexing social content, it seems.
There's several tiers of indexing in Google Search (it's a pyramid, with Instant near the top when that existed), and lots of social stuff is refreshed very frequently at the top of it. That is how recent Tweets show up in searches, as well.
There's not a single "federal employee medical plan", there's a set of insurance plan choices like most large employers and you choose what level of risk/deductible and coverage you want for what you're willing to pay. Standard Flex Savings and Health Savings plans are also available. AFAIK you're eligible to sign up on day one of employment just like most employers. My wife is a fed, last year the government contributed $14k to our health insurance, which is pretty much in line with most plans from large companies. I've had developer jobs where the benefit plans were competitive or comparable to our federal benefits plan, we just stay on the federal plan because my wife doesn't plan on leaving federal service and the continuity is easier. The only advantage really is that there's a lot of federal employees on every possible plan so all the plans are pretty good compared to what you can get at smaller companies. If you work at a company of a 100 or more people, that company should be able to get you similar rates. I don't have first hand experience or much knowledge to speak to, but I have heard federal insurance plans are quite desirable for folks with expensive pre-existing conditions.
The other reply is a bit dated too, there's no longer a real pension available to new employees. There are probably still long-term employees or retirees kicking around with those older pre-1987 retirement packages, but all recent hires are on a plan that's pretty much equivalent to a 401k (Thrift Savings Plan) + a Basic Benefits plan (which is pretty basic and you still pay into. It roughly equates to getting two Social Security payments instead of one). The bulk of a federal employee's retirement funds will come from contributions to their TSP plan.
So, your medical plan evaporates the moment you stop working for most federal agencies? Just like my private employer's medical plan?
And guaranteed pensions are no longer a thing? What is left as a justification for below-market salaries? Employment opportunities in government-dominated towns (which do not have healthy private-sector economies), and more job security?
> So, your medical plan evaporates the moment you stop working for most federal agencies? Just like my private employer's medical plan?
Yes.
>And guaranteed pensions are no longer a thing?
They pitch it as a three legged stool: social security, your 401k, and then a pension that pays out according to a formula (the amount you get in a year is calculated somewhat like pension := (1% of the average salary of the three highest paid contiguous years of service) * number of years of service, up to 20 (after 20 years the percentage goes down). Between the three legs of the stool you can probably get to about 60% of your income, which is supposed to be reasonable for retirement.
> What is left as a justification for below-market salaries? Employment opportunities in government-dominated towns (which do not have healthy private-sector economies), and more job security?
The salary isn't at all bad. For some specialties it's below market, but for the average joe it's pretty decent. But it's worth noting that, for me, the job security is key. I've made more money contracting, but contracts end, sometimes abruptly, and the peace of mind you get from having security is very valuable.
Yeah, basically. If your federal employment ends your medical benefits do as well. It's not like a professor's tenure or anything. But unlike the private sector, if you served for at least 5 years you can re-enroll after you reach retirement age and the government will pick up the "employer's costs" of your insurance once again. You'd still be paying the premiums out of pocket though (which is better than other jobs or Medicare if you can afford it).
There is still a small guaranteed basic pension that federal employees pay into, but it's not really enough to retire on by itself. It's one part of their 3 part retirement plan. Couple it with Social Security (the second part) and you could probably scrape by and remain reasonably well fed and housed if you relocated somewhere rural and cheap, but if you plan on retiring and staying put you're going to have to save using the TSP (the third part) like anyone else saves with a 401k.
I can't provide a blanket statement for why people are federal employees though, it's probably different in each industry. My wife is part of the scientific and regulatory side of the oil and gas industry and [benefits included] she doesn't earn substantially less than her private industry peers in similar scientific roles. And that industry is notorious for frequent and cut throat boom-bust cycles which brings it even closer to parity over the long haul. As a software developer though, not a chance. The desirability of the roles they have and the compensation even with benefits is not usually very attractive and the federal hiring process is bonkers compared to most companies.
The justification for below-market salaries is that you aren't expected to actually produce anything and are almost impossible to terminate unless you commit fraud or harassment. This comes from first hand experience as a federal engineer for almost a decade.
My mother-in-law's first hand experience in handling medical treatment cases for VA for the past decade is that you're expected to handle more cases then you have the time to.
You're also expected to do so, while wading through a waist-deep morass of technological, beurocratic, and managerial stupidity.
In that agency, she can't just zone out and phone it in.
> This is how it ends up with huge armies of bureaucrats doing things that could be easily automated.
Less bureaucracy and lower costs sounds like something anyone would agree on, but remember that a large part of congress has run on anti-tax promises. Hampering the efficiency of the IRS is one way of making good on that.
There's also the tax prep lobby, which is opposed to more automation, streamlining of code, and making tax prep irrelevant in general. Half the IRS could go away if most americans could do a simple 1040 on an IRS website.
No, you can't say it's bipartisan when Republicans have consistently sought to intentionally damage the IRS by underfunding it. They even tried to impeach the IRS chief because he wouldn't go along with their manufactured fake news scandal about the Tea Party.
In general, it does seem true that Republicans haven't been interested in funding the IRS, even though they seem to believe testimony that more funding would increase government income.
I work for a state government agency with a big software problem that has a hard time hiring for this reason. We've got some talented devs only due to the fact that they enjoy living in the area, not because they enjoy getting half(or less!) what they'd make in the private sector.
Converting Assembly to Java isn't "tax reform" and nobody is going to pat you on the back for making an economically disadvantageous decision just because you believe it benefits your fellow citizens. If you want warm fuzzies and to get paid then look at contracting. That's how we fill the gaps when we get literally 0 applicants because the FTE rate for our dev positions is laughably low.
Public sector employers need to compete in the same job market as private sector employers. I can only speak about my department but we're hamstrung by bureaucratic and legislative inertia that is completely out of our control. I believe the mission of my department is an important one but if the private sector software market was more robust in my city and pay scales were just as disproportionate as they are now I would choose a private sector job 10 out of 10 times. The only ones here not constantly checking LinkedIn are the lifers that already have a fat pension and are reasonably close to retirement.
The IRS is based in D.C., which also has a high COL. Additionally, that's for the GS-15 paygrade, which requires a PhD and is the highest possible level -- so you can't be paid more than that. The corresponding paygrade for someone with a masters, or with a few years of experience, is $43-$56k[0]. It's definitely below market IMO.
As a developer in that area, its not super competitive. It is not even close to what a good senior dev is making. They also don't hire people at this level often because you are talking about a director level position. There is huge political push back. This is why its common for the contractors on the project to be paid twice as much as the employees.
Yeah, as a developer in the area with under 5 years of professional experience I am already at the top end of that range. I did no job hopping, do not work for a company that is particularly well known for high pay and did not graduate from a school with a very well known CS program. I have also heard from former co-workers with similar levels of experience who have moved on to other companies that they are making similar amounts.
It is above average for the area (across all levels of experience, for a very experienced developer it probably isn't), but it is not very far above average, so I would expect someone capable of handling such a massive and critical project to be making significantly more.
GS-15 is the top of the pay scale though, there's no such thing as a GS-16 just step increases that come with years of employment.
Plus, would you really want to endure the months of their hiring process (which intentionally filters out people not wanting a long term job) just to join an agency that has no promotion potential for you over the long term?
GS employees almost cannot be fired, government-employee unions protect their members from not the private sector but from the government, they get better than ACA health care, and their retirement is guaranteed by an entity that can print all the money it wants.
"1998 restructuring. It gave the IRS 40 slots ... Congress did not re-up this authority in 2013"
That's 15 years of "streamlined critical pay" authority. And it appears that some number of these slots continued to exist until recently. Two decades of special authority to modernize this software, and nothing to show for it, except perhaps some patents...
Nowhere it says that these slots were created to modernize software. These 40 slots are total amount of people (out of 80K employees) that could be paid above government rates.
These slots were used to fill 168 positions over the 15 years.[1]
"armies of bureaucrats doing things that could easily be automates" = "jobs for people who you owe favors but don't want to put in a position where they might screw up something important"
Elected officials have little incentive to make governing any more efficient.
Bureaucrats themselves have some incentive to be more efficient because then they can spend more of their budget at their discretion.
Offer contracts for $130k + Green Card after one year.
You'll get some of the best candidates from India and China lining up.
I work at Amazon in Seattle right now, but I'd take the pay cut to jump the India green card line. Probably go back to Amazon right after I got the green card tho.
> He says he applied to become a GS-15 or Senior Executive Service member so he could see through the assembler-to-Java project. But his approval didn’t come through until a week before his employment authority expired. By then he’d accepted another job.
(GS-15 is $103k-$134k. https://www.federalpay.org/gs/2017/GS-15)
So, basically: the IRS can't fix its software because it can't pay market rates for software engineers. It can't pay market rates for software engineers not because it lacks the budget for it, but because Congress won't let them. This is how it ends up with huge armies of bureaucrats doing things that could be easily automated.