FR29ab_20140729_omb.final

Supporting Statement for the
Compensation and Salary Surveys
(FR 29a, b; OMB No. 7100-0290)
Summary
The Board of Governors of the Federal Reserve System, under delegated authority from the
Office of Management and Budget (OMB), proposes to extend, without revision, the family of
reports that include the Compensation and Salary Surveys (FR 29a,b; OMB No. 7100-0290).
The FR 29a is collected annually and the FR 29b is collected on an as needed basis but not more
frequently than five times per year. These surveys collect information on salaries, employee
compensation policies, and other employee programs from employers that are considered
competitors of the Federal Reserve Board. The data from the surveys primarily are used to
determine the appropriate salary structure and salary adjustments for Federal Reserve Board
employees. The total annual burden for the FR 29a,b surveys is estimated to be 260 hours.
Background and Justification
The Federal Reserve Board implemented a market-sensitive salary structure in 1989,
replacing one that paralleled the federal government’s salary structure. The Board implemented
the new structure based on several factors, including turnover of key employees in important
positions (especially economists, attorneys, and financial analysts), difficulty in hiring
experienced professionals and top-level graduates, and low employee morale because of actual
or perceived noncompetitive pay. The Federal Reserve met with the consulting firm of Coopers
and Lybrand to identify key job families, select benchmark jobs, and draw the original panel for
a salary survey.
In support of market-sensitive adjustments to the salary structure, the Federal Reserve
sponsors the Compensation and Salary Survey (FR 29a). Between 1989 and 1992, the Federal
Reserve conducted the survey, and in 1993 the survey was assigned to a consultant. The
consulting firm of Towers Watson (formerly known as Watson Wyatt) has conducted the survey
since 1994. In 2008, the Federal Reserve along with other Financial Institutions Reforms,
Recovery and Enforcement Act of 1989 (FIRREA) agencies1 decided to conduct the survey
jointly. The Federal Reserve uses the survey information as a basis for recommendations to the
Board regarding proposed salary range adjustments and merit increases for Federal Reserve
Board employees so that salary ranges are competitive with other organizations offering similar
jobs. The Federal Reserve also uses (1) published data from consultants such as Mercer, Inc.
(Mercer) and Gartner, Inc. to supplement its information concerning specific job families (such
as information technology jobs); (2) merit projection surveys conducted by consulting firms such
as Towers Watson, Hewitt Associates, and Mercer; and (3) data collected by Reserve Banks and
the FIRREA agencies.

1

For purposes of this proposal the FIRREA agencies consist of: the Federal Reserve Board, the Office of the
Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Office of Thrift Supervision, the
National Credit Union Administration, the Commodities Futures Trading Commission, the Farm Credit
Administration, and the Securities and Exchange Commission.

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In order to fill unanticipated staffing needs and to assist in human resources policy planning,
The Federal Reserve conducts more limited surveys (FR 29b) on an ad hoc basis. These surveys
gather information that is needed between annual salary surveys or information on topics that are
not easily incorporated into the annual survey. The surveys have proven to be effective
instruments for the timely collection of such information.
In 2004, the annual Compensation Trend Survey (FR 29c) was discontinued. The Hay
Management Consultants, an international consulting firm, conducted this survey on behalf of
the Federal Reserve since 1991. The FR 29c survey data was primarily used by the Federal
Reserve Board in their annual salary review and adjustments of the salary structure for Reserve
Bank employees. However, since 2001, the Federal Reserve has relied on data published in
other national compensation surveys.
Several human resources consulting firms produce data on salaries and compensation trends;
however, these data are less detailed than the information that the Federal Reserve collects. As
noted above, this published information is used to supplement the FR 29 data, which focus on
jobs comparable to those of Federal Reserve Board employees.
Description of Information Collection
The Federal Reserve is one of the sponsors of the survey to aid in the annual adjustment of
the salary structure. The Federal Reserve Board conducts other surveys on special topics on an
ad hoc basis. These surveys conform to the Federal Reserve System’s strict guidelines for
compensation that govern the type of information gathered and how the information is gathered
and used. The consultant that conducts the annual survey is selected competitively for a twoyear contract.
Annual Compensation and Salary Survey (FR 29a)
The FR 29a requests information in five sections: general information, organization data,
salary policies and practices, benefits programs, and salary data. The information includes salary
ranges, average salaries paid, merit increases, average work weeks (hours worked), benefit
programs, and bonuses. These categories are typical of third-party compensation and salary
surveys. The survey requests data on 65 benchmark jobs (Federal Reserve jobs comparable to
jobs filled by respondents). Of these jobs, 55 are exempt from the Fair Labor Standards Act
overtime requirements, and nine are nonexempt. The benchmark jobs cover the work performed
in every division at the Federal Reserve Board, by position and grade level. Each year, Towers
Watson consults with the Federal Reserve Board to update the list of benchmark jobs and the
sample of respondents.
Towers Watson distributes approximately 99 survey questionnaires, annually, to a broad
cross section of employers within the New York and Washington, DC corridor. On average,
approximately 35 responses are returned and included in the survey database. All respondents
receive a complimentary copy of the completed report.

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Ad hoc surveys (FR 29b)
In addition to the annual surveys, the Federal Reserve Board conducts other surveys (FR
29b) during the year as needed to collect information on specific salary and non-salary issues
that affect Federal Reserve Board employees. Recent examples of salary topics included salaries
paid to employees in economist and attorney positions to aid in recruiting and retention issues.
Recent examples of non-salary topics included workforce planning, telecommuting, and leave
policy.
The process of designing and conducting these ad hoc surveys is informal. The Federal
Reserve Board draws on its good working relationships with the respondents to the FR 29a and
conducts the ad hoc surveys by phone and facsimile from a subset of these respondents. The
Federal Reserve Board cannot anticipate what information will be needed and the need for the
information is usually very time critical. The Federal Reserve Board seeks general approval to
continue conducting the ad hoc surveys as needed and anticipates that it will conduct five ad hoc
surveys per year, contacting about 10 respondents per survey.
Time Schedule for Information Collection
The FR 29a, which collects data as of April 1, is distributed at the end of February each year.
The target date for the return of the surveys to Towers Watson is the beginning of May. Towers
Watson verifies and compiles the survey results during May and June, and the final report is
mailed to respondents in July.
The Federal Reserve Board conducts ad hoc surveys throughout the year when the need
arises. Owing to the informal nature of these surveys, the good working relationships with many
of the respondents, the small number of respondents per survey, and the use of phone and
facsimile instead of mailing paper surveys, Federal Reserve Board typically need only a few
days to design the survey and collect the responses.
Sensitive Questions
This collection of information contains no questions of a sensitive nature, as defined by
OMB guidelines.
Consultation Outside the Agency
Towers Watson and the Federal Reserve Board work together to review and update the
survey instrument. On July 24, 2014, the Federal Reserve published a notice in the Federal
Register (79 FR 43045) requesting public comment for 60 days on the extension, without
revision, of the Compensation and Salary Surveys. The comment period for the notice expired
on September 22, 2014. The Federal Reserve did not receive any comments. On October 1,
2014, the Federal Reserve published a final notice in the Federal Register (79 FR 59263).

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Legal Status
The Board’s Legal Division has determined that the FR 29a, b surveys are voluntary and
authorized by sections 10(4) and 11(1) of the Federal Reserve Act (12 U.S.C. sections 244 and
248(1)), which authorize the Federal Reserve Board to determine employees’ compensation.
The FR 29a survey is completed by an outside consultant that submits the Federal Reserve
Board only a report of the survey containing only aggregate data. Because the Federal Reserve
does not collect or have access to the individual respondent data, no confidentiality issue arises
with respect to the individual responses to the FR 29a. The Federal Reserve does not consider
the report containing aggregate data to be confidential.
The FR 29b consists of ad hoc surveys conducted by the Federal Reserve Board during the
year to collect information on specific salary and non-salary matters that affect Board employees.
The ability of the Board to maintain the confidentiality of information provided by respondents
to the FR 29b surveys will have to be determined on a case by case basis depending on the data
collected under a particular survey. Some of the information collected on the surveys may be
protected from Freedom of Information Act (FOIA) disclosure by FOIA exemptions 4 and 6.
(5 U.S.C 552 (b)(4) and (6)). Exemption 4 protects from disclosure trade secrets and commercial
or financial information, while Exemption 6 protects information “the disclosure of which would
constitute a clearly unwarranted invasion of personal privacy”.
Estimate of Respondent Burden
As shown in the burden table below, the total annual respondent burden is estimated to be
260 hours. Since the surveys are voluntary, it is not possible to predict exactly how many
surveys will be returned in a given year. The estimated number of respondents is based on recent
response rates. In recent years the Federal Reserve Board has conducted, on average, five ad hoc
surveys with an average of 10 respondents per survey. The total burden for the FR 29a,b
represents less than 1 percent of total Federal Reserve System paperwork burden.

Annual
frequency

Estimated
average
hours per
response

Estimated
annual
burden
hours

35

1

6

210

10

5

1

50

Estimated
number
of
respondents
FR 29a Annual Survey
FR 29b Ad hoc Surveys
Total

45

260

The total estimated annual reporting cost to the public for these reporting forms is $15,860.2
2

Total cost to the public was estimated using the following formula: percent of staff time, multiplied by annual
burden hours, multiplied by hourly rate (100% Financial Managers @ $61). Hourly rate for each occupational

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Estimate of Cost to the Federal Reserve System
The total annual cost to the Federal Reserve System for the surveys is estimated to be $20,000
for the FR 29a and $3,000 for the FR 29b surveys. The Board incurs costs in terms of staff time
for development and analysis, and contractual services to the vender to conduct the annual
survey.

group are the (rounded) mean hourly wages from the Bureau of Labor and Statistics (BLS), Occupational
Employment and Wages 2013, www.bls.gov/news.release/ocwage.nr0.htm. Occupations are defined using the BLS
Occupational Classification System, www.bls.gov/soc/

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