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Washington, D.C.—The leader of the union representing employees of the Securities & Exchange Commission (SEC) today called on SEC Chairman Harvey Pitt for action to address the problems “blocking true pay parity” for SEC employees.

President Colleen M. Kelley of the National Treasury Employees Union, which represents some 2,000 SEC employees, addressed a spirited rally of some 200 employees outside SEC headquarters in downtown Washington. NTEU and SEC employees are seeking to negotiate a pay plan that meets the intent of Congress in legislation approved earlier this year that would provide pay parity for SEC employees with those of other federal financial regulatory agencies.

President Kelley called on Chairman Pitt not only to instruct agency negotiators to provide such information as NTEU needs to accurately assess the agency’s pay parity proposal, but to agree to submit any unresolved pay parity issues on May 31 to binding arbitration.

Despite the clear intent of Congress for SEC pay parity, the agency has unilaterally implemented a pay plan that largely benefits executives and non-bargaining unit employees. “Apparently, SEC management fears exposing the real impact of its proposals to the light of day,” Kelley said, adding that the agency “fails to understand the linkage between pay parity and the ability of this agency to meet the critical need presented to it by the investing public.”

Recruitment and retention problems have been particularly severe at the SEC—an agency whose regulatory responsibilities have taken on even greater importance in the face of the business accounting problems that have come to light in recent months.

The SEC pay plan would provide employees with an initial six percent raise—but is so flawed in its design, Kelley said, that it “would still leave SEC employees far short of parity” with other federal regulatory agencies.

A new grade scheme, for example, the NTEU leader said, “could result in employees losing money in coming years.” She asked: “Should employees be made to support a pay plan that will work to cut their pay?”

Moreover, President Kelley said, the SEC plan would give managers and executives “a disproportionate share, a larger share, of available pay parity funds,” noting that it clearly was not the intent of Congress “to give managers more at the expense of front-line SEC employees.”

Delivering a petition for pay parity to Chairman Pitt, signed by nearly 1,000 SEC employees, Kelley noted that a federal mediator with the Federal Service Impasses Panel (FSIP) has certified the pay parity negotiations are at an impasse, and noted that SEC negotiators have indicated they will argue the FSIP does not have jurisdiction over the disputed pay parity issues.

“This action can only be viewed as gamesmanship designed to delay final resolution of the impasse,” said Kelley.

The union leader called on Chairman Pitt “to submit all disputed pay parity issues to arbitration and agree to abide by the arbitrator’s decision.”

NTEU represents some 150,000 employees in 25 agencies and departments.

May 30, 2002

Mr. Harvey Pitt

Chairman

U.S. Securities and Exchange Commission

450 5th Street, NW

Washington, DC 20549

Dear Chairman Pitt:

At the beginning of bargaining for pay parity for SEC employees, NTEU requested that the agency agree to mediation/arbitration to resolve disputed issues. Our purpose in seeking this agreement was to expedite the final resolution of pay parity bargaining by providing a process to ensure that negotiations would be completed quickly even if negotiations reached an impasse. However, SEC negotiators apparently did not share this goal, as they refused to agree to any process to expedite the resolution of impassed pay parity issues.

A federal mediator has now certified the pay parity negotiations as at an impasse. You answered you were unilaterally implementing your proposal as of May 19, 2002, and promised bargaining unit employees that the results of bargaining would be used to supplement your unilateral action. Now, your negotiators have indicated that they will argue that the Federal Service Impasses Panel, the body created by Congress to resolve bargaining impasses in the Federal sector, does not have jurisdiction over the disputed pay parity issues. This action can only be viewed as gamesmanship designed to delay final resolution of the impasse. This strategy works counter to the intent of Congress and counter to the interests of the employees of the SEC; it works counter to the accomplishment of the agency’s mission to regulate the markets; and it works counter to the interests of promoting the public’s confidence in the SEC and its important work.

You failed to listen to the request of NTEU when we proposed mediation/arbitration to ensure timely resolution of these negotiations. We hope that you will be more receptive to the voices of SEC employees, without whose efforts the SEC could not function. Attached to this letter are petitions with the signatures of nearly one thousand SEC employees, asking that you provide, in full, all the information we have requested for pay parity bargaining, that bargaining unit employees get their proportional share of monies available for pay parity, that you agree with NTEU to submit all disputed pay parity issues to arbitration, and that you agree to abide by the arbitrator’s decision.

I look forward to working with you to resolve this matter as quickly as possible.

Sincerely,

Colleen M. Kelley

National President

Petition for Pay Parity

WHEREAS,

1.

The Congress of the United States has determined that pay and benefits at the United States Securities and Exchange Commission (SEC) should be at least comparable with other federal financial regulatory (FIRREA) Agencies;

2.

The National Treasury Employees Union (NTEU) and SEC have entered into bargaining to implement pay parity for bargaining unit employees at SEC;

3.

A full disclosure of information is necessary for bargaining to be completed and the SEC has refused to provide such necessary information to NTEU;

4.

The Federal Mediation and Conciliation Service (FMCS) has certified that SEC and NTEU have come to an impasse over pay parity bargaining, and NTEU has submitted a Request for Assistance with the Federal Service Impasses Panel; and

5.

Notwithstanding the impasse in negotiations, the SEC has unilaterally implemented a pay parity plan that fails to provide a fair share of pay parity funding to bargaining unit employees, and which gives disproportionate increases to managers and executives, even though such employees have never been the primary object of pay parity.

THEREFORE,

WE, the undersigned employees of the SEC, hereby call on Harvey Pitt, Chairman of the SEC, to address the continuing under-compensation of SEC employees by:

1. Providing all information necessary for NTEU to accurately evaluate SEC’s plan, including a complete cost breakdown of each component of the pay parity plan;

2. Providing additional pay increases for bargaining unit employees, to reflect their proportional share of the SEC salary budget; and

3. Agreeing to submit any unresolved pay parity issues to arbitration by May 31, 2002 and to abide by the final decision of the arbitrator.