Gensler's SEC Brain Drain


Today, SEC Chair Gary Gensler’s management team and the union are commencing mediation sessions at the Federal Mediation and Conciliation Service (FMCS) regarding our stalled Collective Bargaining Agreement (CBA) negotiations. The parties remain in disagreement over numerous aspects of our basic employment agreement, such as how our pensions are funded, existing limitations on the Student Loan Repayment Program, how our annual leave is accrued, and what our post-pandemic telework program will look like. As the CBA talks edge closer towards litigation, it is important to understand the basic nature of these disagreements.

The SEC currently faces two national trends that are making it much more difficult to attract and retain the qualified personnel we require to perform our essential mission—a highly competitive legal/financial sector jobs market, and fundamental changes in the workplace expectations of American white-collar professionals resulting from their recently shared pandemic experience. In the CBA negotiations, the union has attempted to meet these challenges head on by proposing positive improvements to human capital policies that will ensure that a long-term public service career at the SEC will remain a viable alternative to private sector employment. Chair Gensler, by contrast, has opposed these changes and in many cases has refused even to permit his team to discuss them with the union. Understood from this perspective, our CBA disagreement is about whether the SEC will be able to maintain the talent we require to meet our mission, now and in the future.

The SEC’s Pressing Attrition Problem

What drives the SEC’s success more than anything else? It is the agency’s highly educated, motivated, and experienced professional employees. That is why roughly 80% of the SEC’s budget is devoted to paying for its staff. It is also why Chair Gensler repeatedly has told Congress that the agency requires more staff to effectively accomplish its mission. To that end, he has been on a hiring spree since his arrival at the agency in the spring of 2021. Unfortunately, however, recent increases in employee attrition have worked against his efforts.

According to information the union has obtained from the SEC, our professional staff currently is leaving the agency at more than twice the rate prior to Gensler’s arrival, and the pace of departures is continuing to accelerate. As you read this, in areas that are central to the Chair’s agenda—rule making and enforcement—staff attrition is off the charts. Even with all his new hires, the agency is struggling to replace these employees, with the overall number of SEC frontline staff running essentially flat for the past year. In an unvirtuous cycle, the first employees to leave for other jobs are often the most experienced, including senior managers, leaving behind a more difficult working environment for those who remain, further accelerating the trend of future departures.

In this environment, the agency will have all it can do to meet its basic enforcement and regulatory needs, let alone the Chair’s historically ambitious policy agenda. And yet, the Chair inexplicably remains opposed to even modest improvements in the CBA. Whether Gensler still views human capital issues through the lens of his late twentieth century Wall Street experience, or he simply does not fully understand what motivates our workforce and how we do our jobs, his labor policies are out of sync with the times and will continue to drive the best and the brightest away from public service careers at the SEC, causing unnecessary and avoidable harm to its mission.

The Impact of Gensler’s CBA Positions

A public agency such as the SEC will never be able to match Wall Street in terms of pay. Virtually anyone working for the Commission could greatly increase their salary by taking a job in the private sector. The SEC can remain sufficiently competitive, however, by providing other benefits that positively impact its employees’ work-life balance and/or ameliorate the financial difficulties that can often accompany a choice to pursue a career in public service. The union’s CBA proposals are focused upon these types of improvements:

Student Loan Repayment Increases:  The union negotiated the Student Loan Repayment Program (SLRP) at the SEC as an incentive to recruit and retain highly qualified professionals and ensure that student debt burden will not be a significant barrier to a career in public service at the agency. The union is now proposing that the SEC utilize its independent statutory authority to increase the total amount of student loan debt that the agency will repay under the SLRP. The current lifetime limit of $60,000 was established thirty years ago, and it has become woefully inadequate given the massive tuition increases in the U.S. over the same period. The American Bar Association, for example, reports that new lawyers owe an average of $130,000 in student debt at graduation. Onerous student debt burdens make it more difficult for young professionals to launch their lives, particularly if they make the virtuous decision to pursue a lower-paying career in public service at an agency such as the SEC. The union estimates that its current proposal to address this problem will cost the SEC approximately 0.17% of its FY 2023 budget. Chair Gensler, however, has refused even to discuss the changes to the SLRP at the CBA table.

Pension Funding Equity:  Most SEC employees are required to contribute 0.8% of their salary for the pension benefits they will receive when they retire after years of federal public service on behalf of the American people. However, employees hired during or after 2013—almost half of our bargaining unit, and all of our new hires—pay up to 4.4% of their salaries for precisely the same benefits. The union has proposed that the SEC use its independent statutory authority to address this disgraceful inequity (as the Consumer Financial Protection Bureau, another federal financial regulator, has done). Based on information obtained directly from the SEC, the union’s current proposal to address this problem would cost the agency approximately 0.37% of its FY 2023 budget. Chair Gensler, however, has rejected the union’s proposal out of hand and has refused to offer any alternative.

Annual Leave Accrual:  The white-collar professionals that we recruit typically enjoy about five weeks of annual leave in the private sector. All new SEC employees, however, are permitted to accrue annual leave only at a rate of four or six hours per pay period. What many may not know is that the SEC has the independent authority and discretion to credit their prior experience at other employers to permit them to accrue annual leave at six or eight hours per pay period but, in many cases, management chooses not to do so. As an example, roughly 20% of new employees who are eligible, based upon their prior work experience, to accrue six hours of annual leave per pay period, are instead required to accrue at four hours per pay period (about 2.5 weeks of leave per year) for three years. This kind of inequity, which results in approximately one in five eligible new employees receiving significantly less annual leave than their similarly situated peers, is unfair and makes the agency a less attractive place to work. To address this, the union has proposed that the SEC use its independent statutory authority to allow all SEC employees to accrue eight hours of annual leave per pay period—as the agency already allowed all SEC managers to do over a decade ago, regardless of their work experience or tenure at the agency. This would cost the SEC nothing, but would put us on a par with what the private sector employers with whom we compete for talent offer. Chair Gensler, however, has refused even to discuss the union’s proposal at the CBA table.

Telework Flexibility:  Given the union’s prior communications regarding telework, you already know that the union is proposing “Presence with a Purpose,” similar to the program already in effect at FINRA and other US white collar employers. Under this proposal, SEC employees would not be required to come into the office on particular days merely for “face time,” but instead would come in as frequently as needed to meet mission-related needs (for example, meeting with outside parties). This proposal would afford the SEC a competitive advantage on flexibility, given that many public and private sector employers are now offering various “hybrid” options that were not commonly available prior to the pandemic. The union’s position is strongly supported by the vast lion’s share of SEC frontline staff. Indeed, given our highly successful collective experience with working from home full-time for two and a half years now during the pandemic, this should not be a controversial issue. Chair Gensler, however, continues to insist upon arbitrary in-office reporting days, including mandatory “community days” for socializing, and limits that are completely disconnected from any mission-related purpose—a position that is out of step with national trends and will make the SEC far less competitive as an employment option.


The union has worked hard over the years to increase SEC compensation, but SEC employees understand that there are limits upon what we can be paid as public employees. Decent benefits would go a long way towards ameliorating the pay issue, especially when carefully calibrated to improve work-life balance and employees’ financial bottom line. That is why pension equity, student loan repayment increases, annual leave, and increased telework flexibility are all vital tools to retain and recruit talented staff.

The union has made concrete proposals to address each of these areas and thus strengthen the Commission’s ability to remain competitive in a difficult job market at a reasonable cost. So far, Chair Gensler has been unwilling to seriously consider any of these proposals. We are concerned that his continued opposition to his employees’ needs will exacerbate the substantial headwinds already faced by the SEC in hiring and retention.

“Given Chair Gensler’s reputation as a hard-charging securities regulator, it is ironic that his human capital policies will likely make the SEC less and less attractive as a place to work,” NTEU Chapter 293 President Greg Gilman said today. “Leading a federal regulatory agency is not just about promulgating the right rules,” he went on to say. “It is also about being a steward of the organization and ensuring that it remains an attractive place for talented people to want to work in the future.”

The SEC is at a crossroads. Now more than ever, we need to recruit and retain highly qualified professionals to meet our crucial mission requirements for the American people. What is fundamentally at issue in our CBA negotiations is whether, during a pro-public service administration, Chair Gensler will rise to meet this obvious challenge during his tenure at the SEC, or instead leave behind a regulatory agency that is less equipped to meet the challenges of the twenty first century.