9/11/13: The Union has fought for over a decade to establish a supplemental retirement match for all employees at the SEC – and the agency has repeatedly promised a 2% match to frontline staff for seven years, but has broken that promise. For that reason, management’s decision this week to provide a 3% supplemental match to managers only has angered many frontline employees. Indeed, the harm to morale caused by management’s latest move can only be fully understood in the context of the agency's tireless efforts since 2002 to block the Union from obtaining this important benefit for all SEC employees.
In 2002, the National Treasury Employees Union’s Legislative Department successfully shepherded through Congress “pay parity” legislation for the SEC, which was contained within the Investor and Capital Markets Fee Relief Act enacted that year. This pay parity legislation was specifically intended to improve the agency’s recruitment and retention by authorizing the SEC to provide pay and benefits to SEC employees that are comparable to those enjoyed by other FIRREA agencies. It was as a result of that legislation that SEC employees were moved in 2002 from the old General Schedule to the current SK pay schedule with substantially higher pay grades.
The pay parity legislation also provided that SEC employees should receive similar benefits to those enjoyed by employees at other FIRREA agencies. One of those benefits that SEC employees do not have is a supplemental retirement match. For example, the Office of the Comptroller of the Currency currently contributes an additional 5 percent of salary into a supplemental retirement plan for its employees, the Federal Deposit Insurance Corporation also matches up to an additional 5 percent, and the National Credit Union Administration matches up to an additional 2 percent. These additional matches are available to all employees at those agencies. In fact, the Union is not aware of any FIRREA agency that provides a larger match to managers than to frontline staff.
During the 2000s, the Union repeatedly requested that the SEC provide a supplemental retirement match of 2%. This modest proposal would have been the smallest additional match among the FIRREAs. Nevertheless, SEC management refused. That dispute ultimately ended up at the Federal Service Impasses Panel. In 2006, the FSIP imposed a compensation agreement upon the agency which included this 2% retirement match.
The SEC, however, was unable to implement the match within the Thrift Savings Plan. Agency management also refused to implement the match in a supplement 401(k) program similar to the FDIC’s and OCC’s program, citing supposed “ethical concerns” with SEC employees investing funds in a plan that was managed by an entity that the SEC regulated. The Union pointed out that SEC employees already participate in the TSP, which was run by Barclay’s, an entity regulated by the SEC, as well as in IRA accounts managed by a host of other entities regulated by the SEC. We also provided alternative arrangements that would not involve an SEC-regulated entity at all. SEC management was not moved.
Four years ago, in 2009, the Union finally persuaded management to abandon the pretense that it would be illegal to provide this important benefit to SEC employees. Chairman Schapiro entered into an agreement agreeing to provide the 2% match to SEC employees, provided that the agency had sufficient funds. The agency then took the position that it did not have sufficient funds in 2009, 2010, 2011 and 2012.
Finally, as part of the compensation agreement covering FY 2013, the SEC agreed to provide a 1% supplemental retirement match, retroactive to January 2013. This agreement was supposed to be implemented in June of this year. The SEC, however, failed to implement the program. Over the past few months, the agency has repeatedly delayed implementation. Late last week, OHR Director Lacey Dingman reported to the Union that OHR is simply spread too thin to get this done anytime soon, despite that fact that she has added literally dozens of new positions to OHR since taking her post two years ago. Ms. Dingman asserted that the SEC hopes to implement the 1% match next January, but that it may be later than that. The Union is currently considering litigation over breach of this agreement.
Over the past few months, during ongoing negotiations with the Union over a new, comprehensive multi-year compensation agreement, the SEC has repeatedly taken the position that it will only provide a 1% supplemental match for frontline staff. The agency has taken this position despite the facts that: (i) it agreed in its last compensation agreement, imposed by the FSIP in 2007, to provide 2%; (ii) it agreed in the 2009 MOU to provide 2%; and (iii) it has failed to keep its promises for seven years now. The SEC has claimed that it cannot afford this benefit.
Now, agency management has announced a new 3% supplemental retirement match for themselves. Management has explained to the Union that it is doing this because “managers work very hard” and “their morale is very low.” Apparently, management has been able to find the funding to give themselves this benefit.
“Management’s decision on this issue is remarkably callous and tone deaf,” NTEU Chapter 293 President Greg Gilman stated this morning. “Everyone knows that the morale of the SEC’s frontline staff is at an all-time low, judging from our repeatedly poor scores on the Federal Employee Viewpoint Survey. It is frankly unfathomable to me that SEC management could grant this benefit to management after failing to keep its promise to the frontline staff for over a decade. The Union will now fight for a compensation agreement with management that provides for equal benefits for all employees. This misguided decision will not stand.”