The Defense Department hopes to move as many as 168,000 employees out of the National Security Personnel System and back to the General Schedule between May and September.

John James, the new director of the NSPS Transition Office, said in an interview today that transitions will begin in May, after all Defense offices with NSPS employees finish upgrading their information technology systems to handle the switch. James said between 50 percent and 75 percent of the roughly 225,000 NSPS employees will be transferred this fiscal year.

"We're pushing for the higher number," James said.

James said the remaining 25 percent, who are almost certain to be transferred out of NSPS in fiscal 2011, will go to other personnel systems besides the GS system. For example, Defense wants to take more time to create special pay flexibilities for physicians, dentists and other medical employees so they can keep extra medical pay NSPS provided.

James said his office does not yet know how many employees transferring to GS have earned large enough pay raises under NSPS to exceed their new grades' step 10 pay caps. Those employees will have future pay raises reduced by half until their GS grade catches up with their salaries. James' predecessor, Tim Curry, in December estimated that 4,000 employees could have their raises halved.

James said until agencies throughout Defense finish classifying employees to determine their GS grades, he won't know how many employees will be affected by the reduced raises.

Federal Managers Association President Darryl Perkinson strongly objects to the Pentagon's plans, which he said will penalize high-performing employees. He will meet with James March 12 to discuss how to avoid hurting those employees' future raises.

James said the Pentagon is bound by law and has no choice but to reduce the raises for those affected employees. "It would require a change in the General Schedule rules" to avoid reduced raises, James said.

Perkinson told Federal Times last week that he is prepared to talk to lawmakers on the House and Senate Armed Services committees if FMA and the Pentagon can't reach a compromise.

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