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Washington, D.C.?The National Treasury Employees Union (NTEU) today signed a new three?year contract with the Federal Deposit Insurance Corporation (FDIC) containing significant improvements in pay and benefits for approximately 5,000 NTEU?represented employees of the regulatory agency.

The agreement calls for a 4.5 percent salary increase in 2000, with pay increases over the following two years to match the increase in the federal General Schedule, with an upward adjustment if the prior year's increase for federal agencies with specific financial institution oversight responsibilities is higher than the General Schedule raise.

It also provides for substantial improvements in a graduated merit pay scale, with increases up to 3.5 percent (in addition to annual salary adjustments) tied directly to employee performance rating scores. FDIC had sought to compress the merit pay scale, a step that would have cost many employees money over the life of the agreement.

NTEU President Colleen M. Kelley called the pact "an example of what a united workforce can accomplish." She said one highlight of the agreement focuses on the increasingly popular issue of employee transit subsidies.

NTEU not only secured these subsidies for employees but also won a provision that automatically increases transit subsidies to the tax?free maximum of $100 per month in 2002; present Internal Revenue Service rules limit the tax?free subsidy to a maximum of $65 per month, but under legislation passed in 1998, the monthly maximum is scheduled to rise to $100 in 2002.

The NTEU president said the contract "is quite an accomplishment, particularly when you consider that the agency's proposals would have sharply restricted employee pay and benefit levels." She said she is "especially pleased" with provisions covering the annual salary structure, merit pay increases and locality pay, all of which came under FDIC attack.

In addition to the transit subsidy and pay provisions, the agreement deals effectively with travel and relocation issues, which are important to a large number of FDIC employees who travel frequently and for long periods on assignment.

NTEU has the right to bargain with FDIC over money because the agency is not covered by the General Schedule and its revenues are derived from fees paid by the financial services industry it regulates. FDIC is one of a number of federal agencies covered by the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) of 1989, such as the Federal Home Loan Mortgage Corporation and Office of the Comptroller of the Currency. The law is designed to improve the supervision of financial institutions, including curtailment of high?risk and inappropriate investments.

The NTEU?FDIC agreement, which took more than two months to negotiate and required the services of a federal mediator, covers FDIC employees in 11 NTEU chapters nationwide. Chapter presidents from each NTEU location took part, on a rotating basis, in the negotiations from the beginning, Kelley said. Chapter ratification meetings and agency head review will occur this month, with a proposed effective date for the three?year agreement of Jan. 1, 2000.

Kelley said NTEU succeeded in maintaining at current high levels FDIC payments to such key programs as health insurance, both short? and long?term disability insurance, pay for promotions, the FDIC savings plan, and others?all of which the agency sought to reduce or, in some cases, eliminate.