Page 19 - The Informed Fed--Hearn Wealth Management

termination. They can only be let go for clearly defined reasons, which
are primarily incompetence, dishonesty and fraud. Detailed grievance

processes held before an un-biased board are available to federal
employees to contest the premise of any employment action. I am sure
that employment security is important to you, which makes the federal

government employer a great choice. The federal government has great
compensation. The federal employer is required by law to pay workers

at prevailing private sector wages. Title 5, section 5301, requires that
federal salary and wage rates for white-collar employees must be
competitive with the private employer pay rates for similar careers within

the same local area. This is accomplished by implementing two types of
annual income adjustments. This is in the form of a general increase
based upon changes within the Employment Cost Index (ECI) and

locality wage adjustments. These are based upon general variations in
wage levels within 32 geographical areas. It has been found that a portion
of the coun

wage than federal employers. Most are at a 10% or less difference. With
that in mind, you have to assess the additional risk you would take by

venturing into the private employer sector, since historically greater job
security is found with the federal government. That slight difference in
pay can become insignificant when you consider numerous perks and

incentives provided to federal employees. These include locality
adjustments, hardship differentials, cost-of-living allowances (for

overseas duty), relocation bonuses, retention allowances, recruitment
bonuses, incentive awards and student-loan repayment.
The additional compensation can really add up; it can account for
100% or more of base wages. As an example: a GS-13 grade federal

employee working overseas might earn as much as $150,000 in some
areas. Superior retirement benefits that federal employees take part in are

a tremendous advantage over the private sector. A study conducted in
1998 by the Congressional Budget Office compared compensation levels
of federal and non-federal employees. They found that a 35-year-old

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