Conversion from the National Security Personnel System to Other Pay Schedules: Issues for Congress

Most federal employees 59.1 are paid on the General Schedule GS, a pay scale that consists of 15 pay grades in which an employees pay increases are to be based on performance and length of service. Some Members of Congress, citizens, and public administration scholars have argued that federal employee pay advancement should be more closely linked to job performance than it currently is on the GS. With these concerns in mind and with explicit congressional authorization, the Department of Defense DOD began developing the National Security Personnel System NSPS in 2003 as a unique pay scale attempting to more closely link employee pay to job performance. NSPS was beset by criticisms since it went into effect in 2006. The system faced legal and political challenges from unions and employees who claimed it was inconsistently applied and caused undeserved pay inequities, among other concerns. On October 7, 2009, House and Senate conferees reported a version of the National Defense Authorization Act for Fiscal Year 2010 that included language to terminate NSPS. DOD must now return employees currently enrolled in NSPS to the GS or to the pay system that previously applied to them or their position. This report focuses on the transition of employees from NSPS to non-NSPS pay systems. It does not address the operation of NSPS or other pay schedules. The report discusses how the transition is scheduled to occur and analyzes congressional options for oversight or legislative action.