RETENTION BONUSES
(§ 9805 of S.610)

PURPOSE: In a knowledge-based agency like NASA, it is important to have effective retention strategies that will encourage experienced employees to remain as needed to mentor new talent and transfer knowledge or to ensure continuity on important programs and projects. The retention bonus provision in the NASA Flexibility Act of 2004 enhances the current retention allowance authority by (1) authorizing larger amounts to address critical needs of the Agency, (2) providing more flexible payment options, and (3) extending the circumstances under which a retention bonus may be offered.

KEY FEATURES

• Similar to the current retention allowance authority provided in Title 5, United States Code (USC), section 5754, the enhanced retention bonus may be paid to an employee only when it is determined that the unusually high or unique qualifications of the employee or a special need of NASA makes it essential to retain the employee and the employee would be likely to leave in the absence of a retention bonus. In addition, payment of a retention bonus under this provision must be consistent with the more specific criteria described in the NASA Workforce Plan and Agency implementing policies.

• Under this authority, NASA may offer a retention bonus to an employee who would otherwise leave to take another Federal job outside the Agency. Previously, retention bonuses could be offered only to employees leaving the Federal service.

• A retention bonus may be paid in installments, a lump sum, or a combination thereof.

• Higher bonuses are authorized for individuals in positions that address a critical need, as defined in the NASA Workforce Plan. In such cases, the individual may be paid up to 50% of his or her annual rate of basic pay, including the locality-based comparability pay, multiplied by the service period. The total retention bonus may not exceed 100% of the employee’s salary as of the beginning of the service period.

• For all other cases, the retention bonus cannot exceed a total of 25% of the employee’s annual rate of basic pay, excluding the locality pay. This parallels the existing authority in Title 5, USC, section 5754.

• Not more than 25% of the total amount of the bonus money paid in a fiscal year under this provision may go to supervisors and management officials, as they are defined in Title 5 USC, sections 7103(a)(10) and 7103(a)(11) respectively.

• Payments may be made in installments, a lump sum, or combination of the two. A service agreement is required unless the bonus is paid in biweekly installments and the installment payment is set at the full bonus percentage rate established for the employee. .

• Service agreements must describe the required service period, the method and schedule of payment, the amount of the bonus, the basis for determining the amount, and the conditions under which the agreement may be terminated prior to completion of the service obligation. The service period must not be less than six months and cannot exceed four years.

• A retention bonus may not be paid for any period of time during which an employee is receiving a recruitment or relocation bonus authorized by 5 USC section 5753, or a recruitment, redesignation, or relocation bonus authorized by the NASA Flexibility Act of 2004.

• The retention bonus provision in the NASA Flexibility Act of 2004 supplements but does not replace the retention allowance authority provided by Title 5, USC, section 5754. NASA may use either authority (but not both) in a particular circumstance.