2006 FECA Circulars Archive

Attention: This circular has been superseded and is inactive.

SUBJECT: Dual Benefits - FERS Cost of Living Adjustments

Effective December 1, 2005, benefits issued by the Social Security Administration (SSA) will be increased by 4.1%. This requires the amount of the Federal Employee Retirement System (FERS) Dual Benefits deduction to be increased by the same amount, to ensure the dollar-for-dollar offset remains current.

This adjustment will be made from the National Office for all cases that were correctly entered into the iFECS Compensation application. The adjustment will be effective with the periodic roll cycle beginning January 22, 2006. There will be no adjustment or overpayment declared for the period of December 1, 2005 through January 21, 2006.

The National Office will provide a notice to each beneficiary affected. A copy will also be provided for each case record.

DOUGLAS C. FITZGERALD
Director for
Federal Employees' Compensation

Distribution: List No. 1 - Folioviews Groups A and
(Claims Examiners, All Supervisors, District Medical Advisors, Systems Managers, Technical Assistants, Rehabilitations Specialists, and Staff Nurses)

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Attention: This circular has been superseded and is inactive.

SUBJECT: Current Interest Rates for Prompt Payment Bills And Debt Collection

The interest rate to be assessed for the prompt payment bills is 4.5 percent for the period of January 1, 2006 through December 31, 2006.

The rate for assessing interest charges on debts due the U.S. Government has changed this year, for the first time since January 2004. The interest rate for assessing interest charges on debts due the U.S. Government is now 2.0 percent for the period of January 1, 2006 through December 31, 2006.

Ordinarily, the rate of interest charged on debts due the U.S. Government is only changed in January and is effective for the entire year. However, the rate may be changed in July if there is a difference in the Current Value of Funds (CVF) interest rate of more than two percent. The rates are reviewed each June and if the rate has changed another Circular will be published to advise all appropriate personnel of the new rate.

Attached to this Circular is an updated listing of both the Prompt Payment and Debt Management interest rates from January 1, 1985 through the current date.

DOUGLAS C. FITZGERALD
Director for
Federal Employees' Compensation

Attachments

Distribution: List No. 2--Folioviews Groups A, B, and D (Claims Examiners, All Supervisors, District Medical Advisors, Technical Assistants, Rehabilitation Specialists, and Fiscal Personnel)

ATTACHMENT TO FECA CIRCULAR NO. 06-02

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Attention: This circular has been superseded and is inactive.

SUBJECT: Loss of Wage Earning Capacity Calculations Under Performance Based Alternative Pay Systems

While there have been alternative personnel systems in the federal government for over 20 years, the Department of Homeland Security's use of performance based alternative pay systems for several of their occupational series has raised the possibility that more federal employees will be moving out of the General Schedule and into alternative pay systems.

There are numerous performance-based pay systems but they all link individual base pay and bonuses to performance. Most options do not provide for any automatic pay increases. These pay systems give managers more flexibility in setting the pay for new hires as well as current employees.

In performance based pay systems (also known as pay banding), agencies may collapse the 15 General Schedule grades into a smaller number of pay ranges. For example, the GS grades could be collapsed into 4 bands which cover GS 1-5, GS 6-11, GS 12-13 and GS 14-15. Once the bands are defined, the agency may hire an employee at any pay amount within a band and determine how employees move within and across bands.

In calculating wage earning capacity, if the date of injury (DOI) position was paid based on a specific grade and step, there is no change in the process for determining the current pay rate for the date of injury position. However, as a result of the fluidity of pay rates within pay bands, there may not be a definitive grade and step for the date of injury pay rate. When calculating a loss of wage earning capacity in cases where a specific grade and step were not assigned to the date of injury position, the Claims Examiner (CE) will first need to determine the injured employee's DOI pay rate as a percentage of the appropriate band.

Once that percentage has been established, the current pay rate for the date of injury job (as entered in the Shadrick formula) will be the same percentage of the current pay range for the band in which the employee was being paid on the DOI. For example, if the employee was hired in the second band (with a range of $28,085 through $60,049) at a salary of $50,000, then they earn 69% of the total range. If the current range of the band in which they were being paid on the DOI is $35,000 through $72,000, then $60,530 will be the current salary since it is 69% of the new range. When calculating the percentage of the pay band range, normal rounding rules apply.

The steps for determining the percentage of the band on the date of injury are as follows:

1) Determine the range of the DOI pay band by deducting the lowest salary from the highest salary within that band.
2) Deduct the salary at the low end of the band from the actual salary paid to the claimant.
3) Take the amount from step 2 and divide it by the amount from step 1. This will give you the percentage of the salary range that the claimant earned on the date of injury.

The steps for determining the current salary for the date of injury job are as follows:

1) Determine the range of the current salaries for the DOI pay band by deducting the lowest salary from the highest salary within that band.
2) Multiply the amount from step 1 by the percentage of the band that the employee was earning at the date of injury.
3) Add the number obtained in the second step to the lowest salary in the current range for the appropriate band. This will give you the current pay rate for the job held when injured.

Once the current pay rate for the job held when injured is calculated according to the above instructions, it can be entered into the Shadrick formula so that a loss of wage earning capacity can be paid to the claimant.

References: FECA Procedure Manual Chapters 2-0814, 2-0900 and 2-0901

DOUGLAS C. FITZGERALD
Director for
Federal Employees' Compensation

Distribution: List No. 1--Folioviews Groups A and D
(Claims Examiners, All Supervisors, District Medical Advisors, Systems Managers, Technical Assistants, Rehabilitation Specialists and Staff Nurses)

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