Agency Considers Cutting the Student Loan Repayment Program to Save Money
6/30/11: The SEC this week provided notice that it will be proposing cutting the SEC’s Student Loan Repayment Program as a “savings opportunity” in the agency's budget. The Union opposes this proposal, which would further diminish SEC employees' work-life benefits while saving the agency only a small fraction of one percent of its budget.
The Student Loan Repayment Program for SEC employees has been part of SEC employees' Collective Bargaining Agreement for almost a decade. Under this highly popular and successful program, participating SEC employees receive up to $10,000 per year as a retention bonus to help repay their student loans, up to a lifetime total of $60,000, in exchange for a three-year commitment to stay at the SEC. Employees may participate in the program to pay down their own student loans, but they may also pay down PLUS loans that they borrow to assist with their children’s educational costs.
The Union objected to management's proposal this week, stressing that this program has been a win-win for the Agency. Last year, hundreds of SEC employees participated. These employees received help with their student loans, enabling them to continue to pursue a public service career. And the SEC was afforded a powerful recruitment and retention tool to ensure that it continues to attract and keep the best and the brightest talent at the agency.
When the SEC recruited the employees who are currently participating in the program, it marketed the Student Loan Repayment Program as one of the benefits that they would enjoy if they accepted a job at the agency. Removing that benefit now would amount to a bait and switch. Furthermore, all of the employees who are participating in this program have been required to sign three-year service agreements. They did so with the understanding that they could participate in the program each year. Now they could find themselves with a substantial hit to their compensation package, and yet they will be unable to leave the SEC to obtain a job with better compensation and/or benefits without breaching their agreement.
We are puzzled as to why the Agency would consider such a proposal considering the large number of employees who benefit from the program, the strong positive impact it has on the Agency’s ability to recruit and retain skilled workers, and the minimal cost of the program.
This year, SEC employees have already been told that a federal employee pay freeze will remain in place for at least two years. For an employee earning $100K per year, this two year freeze alone represents a reduction in pay of approximately $30K over the next decade. Congress also is currently considering increasing federal employee contributions to their pension plans – a move that could immediately reduce salaries by almost 6%. And federal employees have faced the prospect of unpaid furloughs, both as legislation introduced in the House and in connection with possible government shutdowns – including another possible shutdown if the debt ceiling talks fail this summer. All of this has negatively impacted SEC employees, who were already reeling from criticism and attacks leveled against the SEC in connection with the financial crisis.
We are providing this notice at this time because we know that the availability of this program, as modest as it is, is an important part of the compensation package of many SEC employees, and that the agency's plans could affect those employees' personal financial decisions this year. We will continue to oppose this proposal and to emphasize that the benefits of this modest program clearly far exceed the SEC’s investment in it.
The fact that a growing majority of SEC employees already support NTEU's efforts as members of the Union will continue to be critical to our ongoing efforts to convince SEC senior management not to engage in further cuts to its human capital programs. The SEC's highly skilled and dedicated professional staff is the agency's greatest asset. The best way for the SEC to achieve its mission is to do what it can in a difficult environment to retain the best people possible, rather than adopting policies that will drive them away. Thank you for your support.