The 2010 National Defense Authorization Act called for the termination of

National Security Personnel System (NSPS) by January 2012, bringing an end to a

controversial personnel system that's been operational for less than four years.

This spring, Department of Defense (Dod) officials stated they are on track

to transition the majority of its more than 220,000 civilian employees out of

NSPS by Sept. 30.

My Federal Retirement has received many questions recently on

how the elimination of NSPS affects the retirement calcuations for those

soon-to-retire while under NSPS and for those who have already retired

under NSPS.

"Any employee who retired under the NSPS system will not have his or her

retirement annuity (CSRS or FERS) recomputed as a result of the current

elimination of NSPS at most Defense Department civilian agencies," says federal

benefits expert, Ed Zurndorfer.

But for current employees who will transition out of NSPS

back to the General Schedule, there are some unanswered questions

about how it will affect their future salaries.  In terms of how it affects

their retirement, the "href="http://www.myfederalretirement.com/public/310.cfm">high three average

salary" is an important component of a federal employee's retirement annuity

calculation.

GovExec.com target=_blank>reported last week:  "NSPS and the General Schedule

were not created equal, and many NSPS employees are making more money now than

they did at the grade and step level they occupied under the GS system. So those

employees who convert won't see a decrease in pay, but they could lose out on

full annual pay raises, at least until the GS system catches up with them."