Professional Managers Association – Legislative Update
One of the most significant federal workforce developments this year continues to be the implementation of Schedule Policy/Career (Schedule P/C) within the Excepted Service. Schedule P/C replaces the former Schedule F initiative and applies to certain career federal positions that are determined to be policy-influencing, policy-making, policy-determining, or policy-advocating. The Office of Personnel Management finalized regulations earlier this year, and agencies have begun identifying positions for potential conversion.
On June 3, the Administration issued additional guidance and an Executive Order directing agencies to move forward with implementation. Initial reports indicate approximately 8,000 positions government-wide have been identified for conversion, with additional reviews ongoing. Employees placed into Schedule Policy/Career remain career employees hired through merit-based processes; however, they may lose certain civil service protections and appeal rights traditionally available to competitive service employees.
Within the Internal Revenue Service, the Administration has identified the following positions for Schedule Policy/Career designation review: (click here to see the full federal government list)
While the total number of affected IRS SEC employees has not yet been publicly released, these designations represent positions that the Administration has determined may perform policy-related duties warranting consideration under the new Schedule Policy/Career framework.
PMA is closely monitoring the implementation process and evaluating the potential impact on affected executives, managers, and agency operations. While PMA supports accountability throughout the federal workforce, we question the necessity of creating a new classification for these positions. The positions identified for Schedule Policy/Career designation are already non-bargaining unit employees and are subject to established performance management and accountability processes. IRS management currently possesses the authority, tools, and procedures necessary to address performance and conduct issues when they arise.
Congress continued to debate several proposals affecting federal employees during May as part of broader budget reconciliation and federal workforce reform discussions. While some proposals were modified or removed during House consideration, several provisions remain under review and could continue to be debated as legislation moves through the Senate and future congressional sessions. PMA is closely monitoring these developments due to their potential impact on IRS managers, employees, retirees, and future federal hiring efforts.
Among the retirement-related proposals considered were changes to the Federal Employees Retirement System (FERS), including proposals to eliminate the FERS annuity supplement for certain employees who retire before becoming eligible for Social Security benefits. The annuity supplement currently helps bridge the gap between retirement eligibility and Social Security eligibility at age 62. Other proposals examined included changing the retirement annuity calculation from the employee's highest three years of salary ("High-3") to the highest five years ("High-5"), a change that would reduce future retirement benefits for many federal employees. Additional proposals considered increasing employee retirement contributions for certain groups of employees. Although some of these provisions were removed or modified during House negotiations, they remain topics of discussion among policymakers and workforce reform advocates.
Congress has also debated several workforce accountability measures. These include proposals requiring newly hired federal employees to choose between maintaining traditional civil service protections or accepting an "at-will" employment status with lower retirement contribution requirements. Other proposals would establish filing fees for employees seeking to appeal adverse personnel actions before the Merit Systems Protection Board (MSPB), while additional measures seek to expand agency flexibility in managing performance and conduct matters. Supporters argue these proposals would increase accountability and managerial flexibility, while critics contend they could weaken merit system protections that have historically helped ensure a professional, nonpartisan civil service.
Congressional committees have also reviewed proposals involving the Federal Employees Health Benefits (FEHB) Program, including audits intended to verify eligibility for covered family members and discussions regarding long-term program costs. Earlier proposals that would have fundamentally changed the government's contribution structure for employee health insurance were ultimately removed from the House package; however, healthcare costs and benefit structures remain areas of ongoing congressional interest.
In addition, lawmakers continue to examine workforce restructuring tools, including expanded use of Voluntary Separation Incentive Payments (VSIPs), early retirement authorities, hiring restrictions, workforce reductions through attrition, and agency reorganization efforts. These discussions are occurring at a time when many agencies, including the IRS, are already experiencing significant staffing challenges and workforce transitions.
PMA believes any reforms affecting federal employee retirement benefits, workplace protections, health benefits, or workforce management should be carefully evaluated for their long-term impact on recruitment, retention, employee engagement, and agency performance. The federal government competes with the private sector for highly skilled professionals, and workforce policies should support the government's ability to attract and retain talented employees while maintaining accountability and stewardship of taxpayer resources.
PMA will continue monitoring legislative developments and engaging with policymakers on issues affecting IRS managers and employees. Any significant changes to retirement benefits, health benefits, leave programs, civil service protections, or workforce policies will be communicated to members as additional information becomes available.
PMA remains engaged with Treasury, IRS leadership, OPM, congressional stakeholders, and partner organizations to ensure the voices of federal managers are heard during this period of significant change. We will continue to provide members with timely information, practical resources, and advocacy on issues affecting leadership, workforce policy, employee protections, and the future of federal service.
As always, PMA encourages members to share concerns, questions, and feedback regarding workforce changes through our advocacy channels so that we can effectively represent the interests of managers across the IRS.
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