2007 Annual Review of Special Rates

July 9, 2007 CPM 2007-05 MEMORANDUM FOR CHIEF HUMAN CAPITAL OFFICERS FROM: Linda M. Springer, Director SUBJECT: 2007 Annual Review of Special Rates This memorandum announces the 2007 annual review of special rates authorized under 5 U.S.C. 5305 and 5 CFR part 530, subpart C. The U.S. Office of Personnel Management (OPM) authorizes special rates for specific occupations, grades, and locations to alleviate existing or likely significant recruitment or retention problems. Under 5 CFR 530.307(a), OPM may, at any time, conduct general or targeted reviews of established special rates to determine whether they should be increased, decreased, or discontinued based on staffing considerations. By this memorandum, OPM is requesting that agencies conduct a general review of special rates for the purpose of determining the special rate adjustments that should be made in January 2008 in conjunction with the General Schedule (GS) annual pay adjustment. OPM Review and Adjustment of Special Rates Under 5 CFR 530.304(c), a special rate generally is computed by adding a special rate supplement (i.e., a fixed dollar amount or fixed percentage amount) to the underlying GS rate. At the time of a GS annual pay adjustment, special rate employees will receive the same adjustment in their underlying GS rate (or LEO special base rate) as other GS employees. However, OPM must make a separate determination as to whether to adjust (increase or decrease) or discontinue a special rate supplement, taking into account the circumstances and factors that led to establishing the special rate schedule. Based on the adjustment of a special rate supplement, the corresponding special rate (i.e., underlying GS rate plus supplement) may be increased, reduced, or discontinued.

2 We are using an exception-based approach for the annual review. Under this approach, agencies must submit information to OPM only if they are requesting a special rate adjustment greater than or less than the January 2008 GS annual pay adjustment under 5 U.S.C. 5303 or similar provision of law. OPM will review such agency submissions and make determinations regarding the appropriate adjustment in the affected special rate schedules. All other special rate schedules will be adjusted by the same percentage as the January 2008 GS pay adjustment. Attachment 1 provides detailed instructions for requesting an adjustment in a special rate supplement that is greater than or less than the January 2008 GS annual pay adjustment and other information about the exception-based approach. Attachment 2 provides an index of the current special rate schedules by agency. Agencies must submit requests to OPM to adjust (increase or decrease) or discontinue a special rate supplement by October 12, 2007. Terminated Special Rates Under 5 U.S.C. 5305(h) and 5 CFR 530.303(d), an employee’s entitlement to a special rate is eliminated if the employee is entitled to a higher rate of basic pay, such as a locality rate under 5 U.S.C. 5304. As a result of the January 2008 GS annual pay adjustment, some special rate schedules may be terminated because higher locality rates apply at all steps of each covered grade, or certain grades or steps of a special rate schedule may be discontinued because higher locality rates apply. Some special rates also may be terminated because the applicable locality rate is equal to the special rate. The termination of special rates will not result in a loss in pay for any covered employees because all affected employees will receive an equal or higher locality rate to which they are otherwise entitled. OPM will notify agencies of any terminated special rates when we announce the results of the 2007 annual review of special rates. Discontinued or Decreased Special Rates If a special rate schedule (or grade of a schedule) applicable to a position is discontinued or decreased by OPM, and the employee holding the position is placed in a non-special rate position or a lower-paid special rate position, the employee may be entitled to pay retention under 5 CFR 536.301(a)(8). Agencies must follow the rules in 5 CFR 536.304 to determine the employee’s pay retention entitlement. (See also the Grade and Pay Retention Examples at http://www.opm.gov/oca/pay/HTML/Grade_PayRetention_EX.asp.) We ask agency headquarters to bring any problems encountered in implementing the annual review process to our attention as they arise. You may contact the Center for Pay and Leave Administration by telephone at (202) 606-2858, by fax at (202) 606-0824, or by email at payperformance-policy@opm.gov. cc:

Human Resources Directors Attachments

1 Attachment 1 2007 ANNUAL REVIEW INSTRUCTIONS 1. General The U.S. Office of Personnel Management (OPM) is conducting the 2007 review of special rates authorized by 5 U.S.C. 5305 and 5 CFR part 530, subpart C. OPM authorizes special rates for specific occupations, grades, and locations to alleviate existing or likely recruitment or retention problems. The special rate schedules applicable to your agency are listed in the index in Attachment 2. Please note that the six schedules for information technology (IT) employees, tables 999A-999F, are listed in the third row of the index and are applicable to all agencies employing General Schedule (GS) employees even though they are not shown in the individual agency listings. 2. Deadline Agencies must submit all annual review materials to OPM by October 12, 2007, unless an extension is approved by OPM. Please send your materials to the Center for Pay and Leave Administration by email at pay-performance-policy@opm.gov, by fax at (202) 606-0824 or by mail to the following address: Office of Personnel Management Division for Strategic Human Resources Policy Center for Pay and Leave Administration Attn: Special Rates Annual Review Team 1900 E Street, NW., Room 7H31 Washington, DC 20415-8200 3. Agency Reviews In conducting the annual review of special rates, OPM relies on the reviews conducted by agencies employing special rate employees. In conducting their reviews, agencies must consider the circumstances and factors consistent with OPM’s regulations at 5 CFR 530.304 and 530.306. 4. Adjustments Equal to the GS Adjustment Agencies do not need to submit any documentation to request adjustments in special rate schedules equal to the GS annual pay adjustment in January 2008. As permitted by 5 CFR 530.307, special rate schedules will automatically be adjusted in January 2008 by the GS annual pay adjustment without any agency action, unless OPM specifically approves an alternative adjustment. This means that fixed-dollar special rate supplements will be adjusted by approximately the same percentage as the January 2008 GS annual pay adjustment, while fixed-percentage supplements will remain at the same percentage amount.

2 5. Adjustments Greater Than the GS Adjustment Agencies requesting special rate adjustments that are greater than the January 2008 GS annual pay adjustment must submit additional data in accordance with OPM regulations and the instructions on OPM Form 1397. (See CFR 530.304 and 530.306.) Staffing data should cover the period from May 28, 2006, through May 26, 2007, if possible. (A copy of OPM Form 1397 is available at opm.gov/oca/compmemo/2000/ssrpage.asp.) All requests for special rate adjustments greater than the January 2008 GS annual pay adjustment must address the existing or likely significant recruitment or retention problem justifying the proposed increase. Requests for special rate increases to keep up with GS locality pay increases or to maintain an advantage over GS locality rates without evidence of an existing or likely significant recruitment or retention problem will not be considered. When determining whether to request a special rate adjustment greater than the January 2008 GS annual pay adjustment, agencies also should consider the use of other human resources flexibilities to address targeted, short-term recruitment and retention problems. These flexibilities include recruitment, relocation and retention incentives; the superior qualifications and special needs pay-setting authority; and the student loan repayment program. For example, recruitment, relocation, and retention incentives are appropriate for short-term staffing problems and do not confer the same ongoing impact on agency salary outlays associated with a special rate increase. Information on these flexibilities is available at opm.gov/oca/pay/HTML/factindx.asp. 6. Adjustments Less Than the GS Adjustment Agencies requesting special rate adjustments that are less than the January 2008 GS annual pay adjustment must submit a written justification and any applicable supporting data in accordance with OPM regulations and the instructions on OPM Form 1397. Such a request may be appropriate if you have determined that special rates are no longer necessary to prevent a serious staffing problem and you wish to phase out special rates by freezing or reducing the special rate supplement. (See also “Requests for Reduction or Termination of Special Rate Schedules.”) 7. Requests for Reduction or Termination of Special Rate Schedules Agencies may request to reduce or terminate special rate schedules or grades of a schedule as part of the annual review process. These types of requests trigger the pay retention provisions of 5 U.S.C. 5363 for eligible employees. Therefore, OPM advises agencies to consider phasing out special rates that are no longer necessary by freezing or reducing special rate supplements without reducing the corresponding special rate. (A special rate supplement may be reduced without triggering pay retention as along as the employee’s underlying base rate is increased simultaneously by a sufficient amount to prevent the employee’s special rate from being reduced. In other words, if the increase in the underlying base rate exceeds the reduction in the special rate supplement, the employee will still have a net increase in his or her special rate.)

3 Termination of a special rate schedule may be appropriate if there are no longer any employees covered by that schedule. In this case, the affected agency or agencies should provide OPM Form 1397 indicating the termination of the schedule and that there are no covered employees. 8. Certification The head of each agency must document and certify his or her recommendation for any special rate adjustment not equal to the January 2008 GS annual pay adjustment or to terminate a special rate schedule and submit such certification to OPM on OPM Form 1397. A headquarters official designated to act on behalf of the head of the agency may sign the certification. If there are substantial differences among agency recommendations for a particular special rate schedule, OPM will designate a lead agency (usually the agency with the largest number of covered employees). OPM generally will be the lead agency for worldwide/nationwide schedules. The lead agency will be responsible for obtaining a consensus from the major agencies involved and submitting a final recommendation for that schedule. We expect each agency covered by a schedule to cooperate with the designated lead agency in attempting to reach a consensus. 9. New Requests Not Part of the Annual Review Agencies should indicate how requests to establish a new special rate schedule submitted between now and December 31, 2007, relate to the anticipated January 2008 GS annual pay adjustment. 10. Effective Date Adjustments in special rate schedules resulting from this year’s annual review will take effect on the same date as the 2008 general GS adjustment—i.e., the first day of the first applicable pay period beginning on or after January 1, 2008. If there is no general GS adjustment in 2008, the amount of the special rate adjustment will be zero, unless an adjustment greater than the GS adjustment is requested and approved. Any such adjustment will take effect on the first day of the first applicable pay period beginning on or after January 1, 2008. However, OPM may authorize new schedules and changes in existing special rate schedules at any time during the year if all the required criteria for establishing or adjusting special rates are met. (Note: Incomplete requests for special rate supplement increases that are greater than the January 2008 GS annual pay adjustment may delay OPM review and approval beyond the first day of the applicable first pay period beginning on or after January 1, 2008.) 11. For More Information For more information on the 2007 annual review of special rates, contact the Center for Pay and Leave Administration by telephone at (202) 606-2858, by fax at (202) 606-0824, or by email at pay-performance-policy@opm.gov. Agencies contemplating a request for an adjustment greater than or less than the January 2008 GS annual pay adjustment or a

4 reduction or termination of a special rate schedule should contact OPM’s Center for Pay and Leave Administration for additional information and instructions. 1 Attachment 2 INDEX TO TITLE 5 SPECIAL RATE TABLES BY AGENCY Agency Subelem Title AN 00 AFRICAN DEVELOPMENT FOUNDATION AM AGENCY FOR INTERNATIONAL DEVELOPMENT 0029 0499 0524 A* ALL FEDERAL GOVERNMENT AGENCIES 999A 999B 999C 999D 999E 999F AB AMERICAN BATTLE MONUMENTS COMMISSION BT ARCHITECT & TRANS BARRIER COMPLIANCE BD LA ARCHITECT OF THE CAPITOL 0029 0180 0304 0414 0422 RH ARMED FORCES RETIREMENT HOME-GULFPORT RH ARMED FORCES RETIREMENT HOME-WASHINGTON 0029 0039 0156 0290 0303 0304 0334 0405 0414 0428 IB BROADCASTING BOARD OF GOVERNORS 0012 0029 0070 0414 0422 DJ BUR OF PRISONS/FEDERAL PRISON SYSTEM 0013 0466 HS BD BUREAU OF CUSTOMS AND BORDER PROTECTION 0348 0570 0571 0572 0573 HE CENTERS FOR DISEASE CONTROL & PREVENTION HB CMTE FOR PURCH FRM BLIND & OTH SEV HAND CF COMMISSION OF FINE ARTS CC COMMISSION ON CIVIL RIGHTS 0029 0070 SK CONSUMER PRODUCT SAFETY COMMISSION 0012 0029 0032 0057 0414 0422 EQ COUNCIL ON ENVIRONMENTAL QUALITY DD DEFENSE LOGISTICS AGENCY 0105 0556 0562 983P 983S BF DEFENSE NUCLEAR FACILITIES SAFETY BOARD AG DEPARTMENT OF AGRICULTURE 0012 0023 0029 0032 0057 0070 0112 0115 0137 0155 0159 0222 0223 0256 0304 0305 0382 0414 0417 0422 0484 0490 0499 0524 0564 CM DEPARTMENT OF COMMERCE 0012 0023 0029 0032 0057 0070 0071 0072 0159 0223 0304 0305 0414 0422 0569 0589 980D 983C 983D DD DEPARTMENT OF DEFENSE (EXCL MIL DEPTS) 0012 0023 0029 0032 0057 0065 0070 0071 0072 0137 0150 0151 0152 0156 0174 0198 0223 0282 0302 0304 0305 0402 0414 0422 0428 0484 0567 0589 ED DEPARTMENT OF EDUCATION 0012 0023 0029 0057 0070 DEPARTMENT OF ENERGY 0012 0023 0029 0032 0137 0173 0290 0304 0305 0329 0349 0414 0415 0422 0499 0504 DEPARTMENT OF HEALTH AND HUMAN SERVICES

0012 0023 0029 0032 0039 0057 0070 0071 0112 0138 0168 0187 0269 0270 0271 0275 0290 0304 0305 0323 0329 0414 0417 0422 0474 0499 0524 983D DEPARTMENT OF HOMELAND SECURITY 0012 0023 0029 0057 0070 0071 0112 0140 0159 0187 0224 0290 0304 0305 0316 0329 0334 0348 0365 0366 0414 0422 0499 980A 980B 980C 980D 980E 980F 983A 983B 983C 983D 983E 983F DJ DEPARTMENT OF JUSTICE 0012 0190 0294 0385 0498 0574 DL DEPARTMENT OF LABOR 0012 0023 0029 0032 0057 0070 0071 0112 0137 0159 0304 0305 0414 0417 0422 0499 DEPARTMENT OF STATE 0012 0023 0029 0057 0070 0223 0290 0302 0304 0414 0422 DEPARTMENT OF THE AIR FORCE 0007 0133 0230 0318 DN HE HS ST AF SPECIAL RATE TABLES 0013 0023 0029 0214 0224 0230 0296 0299 0300 0410 0414 0422 0502 0506 0510 983A 983D 983E 0011 0134 0238 0328 0012 0137 0252 0329 0023 0143 0278 0334 0032 0282 0301 0438 0511 0029 0153 0282 0336 0057 0286 0304 0440 0518 0032 0156 0290 0354 0070 0287 0316 0453 0519 0057 0173 0302 0376 0071 0288 0357 0464 0527 0065 0174 0303 0405 0112 0289 0365 0492 0532 0070 0198 0304 0409 0124 0290 0366 0495 0539 0071 0202 0305 0414 0152 0292 0379 0496 0540 0072 0214 0314 0415 0187 0293 0384 0497 0541 0105 0224 0316 0422 Agency Subelem Title SPECIAL RATE TABLES 0425 0428 0433 0435 0465 0476 0499 0507 0511 0512 0513 0517 0520 0524 0528 0537 0558 0565 0566 0577 0589 0593 983Q 983R 983S 983T AR DEPARTMENT OF THE ARMY 0007 0071 0204 0258 0318 0357 0428 0477 0563 0012 0072 0206 0259 0319 0360 0430 0481 0565 0023 0133 0214 0260 0323 0397 0431 0484 0566 IN DEPARTMENT OF THE INTERIOR 0012 0023 0029 0057 0070 0111 0159 0168 0223 0241 0256 0304 0305 0349 0368 0414 0415 0417 0422 0429 0435 0490 0563 983A 983B 983C 983F NV DEPARTMENT OF THE NAVY 0012 0072 0208 0303 0375 0490 983S TR DEPARTMENT OF THE TREASURY

0012 0023 0029 0032 0053 0057 0070 0071 0072 0112 0137 0159 0187 0224 0290 0304 0305 0414 0415 0417 0422 983D TD DEPARTMENT OF TRANSPORTATION 0012 0023 0029 0032 0057 0070 0140 0159 0223 0290 0304 0305 0316 0329 0334 0414 0422 0490 0524 983E VA DEPARTMENT OF VETERANS AFFAIRS 0029 0032 0057 0112 0137 0305 0370 0414 0422 0499 HU DEPARTMENT OF HOUSING & URBAN DEVELOPMENT 0012 0023 0029 0057 0070 0071 0112 0137 0414 0022 0023 0105 0115 0223 0224 0304 0305 0377 0378 0499 0524 983T 983U 0029 0150 0218 0280 0328 0399 0433 0486 0568 0029 0137 0227 0316 0402 0528 0032 0151 0223 0282 0329 0405 0435 0490 0575 0032 0139 0230 0323 0405 0556 0044 0153 0224 0290 0334 0409 0440 0499 0577 0046 0140 0235 0324 0414 0559 0051 0056 0057 0065 0156 0181 0182 0188 0225 0230 0233 0238 0302 0303 0304 0305 0336 0337 0338 0339 0414 0415 0420 0422 0454 0456 0465 0469 0501 0514 0522 0524 983P 983Q 983R 983S 0057 0150 0238 0328 0422 0565 0058 0151 0252 0329 0424 0577 0065 0156 0276 0334 0428 0589 0066 0174 0282 0346 0463 0591 0068 0195 0250 0314 0350 0424 0470 0528 983T 0070 0200 0252 0316 0354 0425 0476 0556 983U 0070 0071 0182 0198 0290 0302 0351 0360 0484 0486 983P 983R EP ENVIRONMENTAL PROTECTION AGENCY 0012 0023 0029 0032 0057 0112 0305 0414 0415 0422 0524 EE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION 0012 0023 0029 0032 0057 0070 0112 EB EXPORT-IMPORT BANK OF THE UNITED STATES 0012 0029 0070 0414 0415 0417 0422 DJ FEDERAL BUREAU OF INVESTIGATION FC FEDERAL COMMUNICATIONS COMMISSION 0012 0023 0029 0057 0070 0304 0422 0484 LF FEDERAL ELECTION COMMISSION AU FEDERAL LABOR RELATIONS AUTHORITY MC FEDERAL MARITIME COMMISSION FM FEDERAL MEDIATION AND CONCILIATION SERV 0012 0029 RS FEDERAL MINE SAFETY & HEALTH REVIEW COMM RF FEDERAL RETIREMENT THRIFT INVESTMENT BD FT FEDERAL TRADE COMMISSION 0012 0029 0057 0070 0112 GENERAL SERVICES ADMINISTRATION

0012 0023 0029 0057 0070 0071 0105 0112 0150 0151 0152 0159 0305 0329 0349 0414 0422 0490 GS HE INDIAN HEALTH SERVICE 0001 0316 0372 0467 0473 0487 0536 AH INSTITUTE OF MUSEUM & LIBRARY SERVICES IF INTER-AMERICAN FOUNDATION TR INTERNAL REVENUE SERVICE 0442 0443 0444 0446 0448 0450 LC LIBRARY OF CONGRESS 0029 0304 BD MERIT SYSTEMS PROTECTION BOARD 0012 0023 0029 0057 0112 CX NAT CMSN ON LIBRARIES AND INFO SCIENCE NATIONAL AERONAUTICS AND SPACE ADMIN 0012 0029 0070 0071 0290 0305 0414 0422 0499 0524 NN NQ NATIONAL ARCHIVES AND RECORDS ADMIN 0023 0029 0057 0071 0414 NP NATIONAL CAPITAL PLANNING COMMISSION Agency Subelem Title SPECIAL RATE TABLES AH NATIONAL ENDOWMENT FOR THE ARTS AH NATIONAL ENDOWMENT FOR THE HUMANITIES SM NATIONAL GALLERY OF ART 0029 0414 HE NATIONAL INSTITUTES OF HEALTH NL NATIONAL LABOR RELATIONS BOARD 0012 0023 0029 0057 0070 NM NATIONAL MEDIATION BOARD NF NATIONAL SCIENCE FOUNDATION 0029 0414 NS NATIONAL SECURITY COUNCIL TB NATIONAL TRANSPORTATION SAFETY BOARD 0029 0057 0070 0112 0414 0415 0422 0499 0589 OS OCCUPATIONAL SAFETY & HLTH REVIEW COMM 0029 0112 EC OFFICE OF ADMINISTRATION GG OFFICE OF GOVERNMENT ETHICS BO OFFICE OF MANAGEMENT AND BUDGET QQ OFFICE OF NATIONAL DRUG CONTROL AGENCY OM OFFICE OF PERSONNEL MANAGEMENT 0012 0023 0029 0032 0057 0137 0159 0282 0304 0349 TS OFFICE OF SCIENCE AND TECHNOLOGY POLICY FW OFFICE OF SPECIAL COUNSEL 0029 0057 TN OFFICE OF THE U.S. TRADE REPRESENTATIVE GB OVERSEAS PRIVATE INVESTMENT CORPORATION CM PATENT AND TRADEMARK OFFICE 0029 0576 BG PENSION BENEFIT GUARANTY CORPORATION 0029 0137 SS SELECTIVE SERVICE SYSTEM SB SMALL BUSINESS ADMINISTRATION 0012 0029 0057 0070 0071 0414 SMITHSONIAN INSTITUTION 0012 0023 0029 0070 0223 0302 0304 0305 0414 0422 0499 0589 SM SZ SOCIAL SECURITY ADMINISTRATION 0023 0029 0032 0039 0057 0070 0071 0072 0112 0138 0187 0304 0305 0323 0414 0422 0499 AF 0B

U.S. AIR FORCE ACADEMY AD U.S. ARMS CONTROL & DISARMAMENT AGENCY HD U.S. HOLOCAUST MEMORIAL COUNSIL 0029 0414 TC U.S. INTERNATIONAL TRADE COMMISSION NV U.S. MARINE CORPS 0565 0566 LT U.S. TAX COURT AR MC US ARMY MEDICAL COMMAND