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TRANSITION AND DOCUMENTATION PROCEDURES FOR PMRS TERMINATION

Public Law 103-89, The Performance Management and Recognition System (PMRS) Termination Act of 1993, extends the PMRS through October 31, 1993, to allow for its orderly termination and the payment of merit increases and PMRS performance awards based on the FY 93 performance cycle. The provisions of the PMRS Termination Act of 1993 apply to all employees who are covered by the Performance Management and Recognition System on October 31, 1993. This attachment contains instructions for:

• implementing final performance pay decisions under the PMRS,

• bringing PMRS employees under agency Performance Management Systems (PMS) and the General Schedule (GS) pay plan,

• documenting certain personnel actions for employees covered by the termination legislation, and

• notifying PMRS employees of these changes.

Merit Increases

As in the past, merit increases must be effective on the first day of the first applicable pay period on or after October 1, 1993, which for most agencies will be October 3, 1993. Agencies must complete all payroll adjustments associated with these merit increases, including retroactive payments, by December 31, 1993. Procedures for documenting these increases on the SF 50 will remain the same (see Table 17-B of FPM Supplement 296-33).

PMRS Performance Awards

The FY 93 performance cycle rating of record must be the basis for PMRS performance awards granted under the extended authority of 5 U.S.C. 5406. Agencies must obligate funds for these awards no later than October 31, 1993, the expiration date of the PMRS. Also, the effective date for awards granted under this extended authority must be no later than October 31, 1993. To ensure timely payment of these final PMRS awards, agencies should pay all PMRS performance awards no later than December 31, 1993. Agencies should follow the usual procedures to document these awards (see Table 29-A of FPM Supplement 296-33).

To accommodate variations in agency practice, OPM is applying the PMRS award funding minimum and maximum limitations during this termination period to the amount spent on awards based on FY 93 performance cycle ratings of record (i.e., FY 93 performance) rather than to the amount spent during a particular fiscal year. In other words:

When the amounts spent on PMRS performance awards granted to recognize the FY 93 performance cycle for PMRS employees are added together, does total spending fall between 1.15% and 1.5% of estimated aggregate salaries?

This limitation will have the following effect on agencies:

• Agencies that spend only FY 94 money to reward FY 93 performance must spend between 1.15 and 1.5 percent of their aggregate PMRS salaries under the PMRS extension.

• Agencies that spend both FY 93 and FY 94 money (split funding) to reward FY 93 performance must pay their awards so that the total amount spent to recognize FY 93 performance meets the 1.15 and 1.5 percent limits.

• Agencies that spent only FY 93 money to reward FY 93 performance and met the 1.15 and 1.5 funding limits do not have to pay any additional PMRS performance awards under the PMRS extension.

Documenting System Termination

OPM has taken care to minimize the administrative burden on agencies and personnel data system changes that PMRS termination necessitates. No separate SF 50 to document PMRS termination or process any pay plan conversion will be needed. However, the Official Personnel Folder (OPF) should include a record of the transition, as described below, in the event that pay system coverage ever needs to be reconstructed.

The provisions of P.L. 103-89 bring PMRS employees under the General Schedule pay plan, with its within-grade increases and waiting periods. The provisions also permit agencies to pay current rates of pay, as adjusted by final merit increases. We must be able to identify all employees who are covered by the provisions of the termination legislation. Therefore, OPM has decided to retain the GM pay plan code to designate employees covered by the PMRS termination provisions. (A non-PMRS employee who moves to a supervisory or management position in grades 13, 14, or 15 after October 31, 1993, will use the GS pay code.) Also, "00" will continue to be shown as the step for all employees using the GM pay plan code, including those whose current rate of pay is one of the designated GS steps.

Retaining the GM pay plan code for this purpose should simplify transition. Many PMRS employees have rates of basic pay that are "off step" (i.e., at rates other than the designated GS steps). Many agencies have data systems that edit employee pay information with a GS pay plan code to assure that pay rates match the fixed GS step rates and will not accept a record with GS and an "off-step" rate. Continuing the GM code eliminates the need to make immediate programming changes to those data systems.

OPM will change the definition of the GM code, effective November 1, 1993. That change in definition must be recorded in the OPF. To minimize paper handling, one recording method is to put a statement in the remarks section of the SF 50 that documents the October 1993 merit increase, or some other personnel action nearest in timing to the termination of the PMRS. Attachment 2 contains sample language that can be placed in the remarks section of the merit increase SF 50. An alternative method is to file a copy of an employee notification letter on the right side of the OPF (see below for a discussion about notifying employees of PMRS termination).

Pay Administration - Within-Grade Increases

All GS employees, including those designated "GM" after October 31, 1993, will be eligible for within-grade increases (WGI's) according to the waiting periods established in statute. The last PMRS merit increase received, including one for zero dollars, is an equivalent increase for the purpose of calculating and completing the prescribed waiting periods. WGI's have the dollar value of one-ninth of the pay range and "GM" employees will have that increase added to their basic pay rate (including an off-step rate) upon completion of the appropriate waiting period, provided performance has been at an acceptable level of competence. To facilitate transition and limit changes to existing data systems further, OPM will redefine the merit increase nature of action code (NOAC = 891) to represent WGI's for "GM" employees. Agencies will use this NOAC to document WGI's granted to employees covered by P.L. 103-89.

Awards after October 31, 1993

Agencies must process all awards for non-SES employees with effective dates after October 31, 1993, under the authorities in 5 U.S.C. chapter 45 (V3E, V3F, V3G, V4G, V4R). When granting awards to "GM" employees with an effective date later than October 31, 1993, agencies cannot use the NOAC (889) or legal authorities (V6K, V7L, V7N, and V7P) previously used for awards granted under 5 U.S.C. chapter 54. Agencies must use the appropriate GS NOAC's and chapter 45 legal authorities in processing such awards.

Many agencies treat a quality step increases (QSI) as a one-time award, even though it permanently increases basic pay. After the PMRS expires, "GM" employees rated Outstanding will technically be eligible for QSI's. Agencies will have already recognized FY 93 performance under the PMRS extension. Many of the PMRS employees who are above the first tercile and are rated Outstanding and who receive final, full merit increases could be considered to have received QSI's. Therefore, agencies may want to consider developing appropriate guidelines for granting QSI's to former PMRS employees during FY 94, especially in light of the statutory restriction that an employee may not receive a QSI more than once in a 52-week period. When agencies decide that a QSI would be the appropriate recognition for a "GM" employee rated Outstanding under the PMS, they will process it under the normal rules for processing QSI's (see Table 17-A of FPM Supplement 296-33). Agencies will have to ensure that their data system edits accept a QSI in combination with the GM pay plan code.

Termination of Coverage under P.L. 103-89

Promotion, change to a lower grade, a break in service of more than 3 days, transfer to another agency, or reassignment to a non-supervisory or non-management position will end an employee's coverage under the provisions of the PMRS Termination Act of 1993. At that time, the agency will adjust the employee's rate of basic pay to the designated GS step rate that meets or exceeds the current rate of pay, not to exceed step 10. When processing the personnel action that results in the employee's placement at a designated GS step rate and shift back to the GS pay plan code, the agency should include a remark on the SF 50 that this action terminates the employee's coverage under the provisions of P.L. 103-89 and the use of the GM pay plan code.

Notifying Employees

As soon as possible, agencies should notify in writing all employees covered by the PMRS of the provisions of the PMRS Termination Act of 1993. Specifically, they should be informed:

• that the PMRS expires October 31, 1993,

• that they will retain their current rate of pay and GM pay plan code,

• that they are covered by the GS pay plan, including its periodic within-grade increases, and

• about the agency performance management system that will apply to them.

Attachment 3 is a sample memo that will serve both as employee notification and, optionally, as documentation for the right side of the OPF.