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DoD Uses New Incentives To Recruit the Best

By Gerry J. Gilmore
American Forces Press Service

WASHINGTON, Nov. 9, 2000 – An expanded college loan repayment program and a modified retirement savings system are two new recruiting tools at DoD's disposal because of legislation recently signed by President Clinton, said DoDs senior civilian personnel official.

Diane Disney, deputy assistant secretary of defense for civilian personnel policy, noted that the two popular recruitment tools are widely used in the private sector. She said they will help DoD attract the best and the brightest civilian employees.

This is an extremely tight labor market," Disney said. "We now have 77 percent fewer people in their 20s [in DoD] than we did a decade ago, and many people are coming up on retirement eligibility. We need to take definite steps to improve our recruitment of college graduates.

She said DoDs civilian work force requirements are rapidly changing due to information technology advances. Older baby-boomer employees - most at the mid- to senior-grade level, she noted, are expected to start retiring this year. People with experience in information technology and other technical fields are needed to replace them, Disney said, even while the healthy economy makes it hard to compete with private-sector employers for young, or older, college- educated employees.

The enhanced college loan repayment program would pay up to $6,000 per calendar year, up to a total of $40,000, Disney said. It will take effect in mid-2001, she added, and its cost will be borne by the agencies involved.

Previous authority to pay off student loans was limited to professional, administrative and technical positions only. The new legislation removes those limitations so that any occupation might be eligible, she said. The program, however, is not retroactive.

Disney said the federal civilian college loan repayment program shouldnt dissuade people from joining the military, which offers up to $65,000 for college tuition.

Right now, if somebody wants to come work for the Department of Defense, but doesnt necessarily want to be in uniform, there really isnt an obvious enticement. This provides an enticement to the civil service within DoD, the kind of approach the military has found so effective, she said.

Recently approved legislation affecting the governments 401(k)-like Thrift Savings Plan gives newly hired federal employees the opportunity to start saving immediately, Disney said. Previously, she explained, people couldn't invest in the plan until the second TSP open season after they began working for the federal government.

The enhanced TSP program is a really great incentive, particularly for bringing in mid-level and senior people, she said. The older people become, Disney said, the more concerned they are about their retirement system.

Currently, about 75 percent of eligible DoD civilians participate in at least one of the three TSP investment funds: government securities, corporate bonds and stocks, she said. Money put into TSP comes from pre-tax dollars and reduces taxable income; the investments and earnings arent taxed until they are withdrawn.

If we have a retirement system that denies people the opportunity to participate in retirement savings for maybe as long as a year, were not going to look like a very attractive employer, Disney said. This issue arises when we try to recruit faculty members for our institutions, or when we try to bring in scientists and engineers for three- four years. The old system was a real disincentive because retirement earnings are so important.

Disney said new employees would also be allowed to contribute rollover distributions from previous retirement plans.

That helps to simplify a persons life, she said. A person who joins the government and who already has a 401k account with a past employer might not want to handle two, and now doesn't have to. You can now roll those two into one, Disney said.

The newly available recruiting tools should make federal employment much more appealing than it was before, she said.

Were hitting both ends of the experience spectrum. The student loan repayment program is useful at all ages, but it is particularly useful for people in their 20s," Disney remarked. "The TSP program is of value to people of all ages, but is particularly important to those in their middle and later years.

For more information about the federal Thrift Savings Plan, visit the TSP Web site at www.tsp.gov.

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