ALEXANDRIA, Va. -
NCUA had hoped to raise employees' pay by an average of 3.5%-the rate being provided for all federal employees-but a contract agreed to last month with the National Treasury Employees Union will provide average raises instead of 5% for the 750 covered employees for each of the next three years, meaning the agency's other 200 employees will get the same rate.
The union contract, which covers the agency's 720 examiners, will provide merit pay raises starting in March of from a low of 2.75% to as much as 8.25%.
Len Skiles, executive director for NCUA, called the union contract a "balanced" agreement, "that's good for NCUA, good for staff and good for our stakeholders."
But just as importantly, NCUA will award all of its employees so-called locality raises based on the increase of the cost-of-living in each locality, averaging almost 3%. For some high-price regions, like the Washington, D.C., market surrounding NCUA headquarters, the locality increase is expected to be much higher.
As a result, some NCUA employees will be receiving pay raises of as much as 12% to 15% next year.
The two components of the employee raises will add more than $6.5 million to the agency's spending for 2008.
The compensation, including related benefits, were the primary component-75%-of the $158.6 million budget for next year approved last week by the NCUA Board. That amounts to a spending increase of 4.3% over this year.
That will require that federally chartered credit unions pay an average of 10% more next year in operating fees assessed by NCUA.
With NCUA raising the brackets on operating fees by an average of 6% to account for asset growth in 2007, this will mean a credit union of under $500,000 in assets will continue to pay no operating fee; a $5 million CU will pay $1,115 (up $100); a $100 million CU will pay $22,297 (up $2,000); and a $1 billion CU will pay $197,245 (up $25,000).
The spending plan also includes a slight reduction in the so-called overhead transfer rate, by which NCUA transfers funds from the National CU Share Insurance Fund to pay for operating expenses. Next year's rate will be 52%, down from 53.3% this year.
The biggest capital expenditures in next year's budget will be an estimated $5 million cost to replace the agency's 11-year-old legacy accounting system.
The union contract, which must still be ratified by the three-year-old union, also sets ground rules on work schedules for examiners, most of whom work out of their homes. It will also set up a certification process for all examiners.
Next year's expenses will also include costs to train NCUA regional directors and staff how to comply with the union contract, and two more examiners to make extra time for union stewards to conduct their union responsibilities.
This is the first contract ever set by NCUA.
