# Federal Agencies Preserve Step Progression for Lateral Transfers

Federal employees at the GS-14 grade transferring laterally between agencies generally retain their step progression timeline, including scheduled step increases, under 5 CFR 531.405. Creditable service time is preserved even with breaks up to 52 weeks, ensuring continuity of pay adjustments. However, procurement professionals and HR specialists should be aware that some agencies may incorrectly reset step progression clocks due to locality pay differences or conversion to alternative pay systems like Acquisition Demonstration (Acq Demo). Employees and managers must monitor pay adjustments post-transfer to avoid unintended step resets and maintain proper compensation progression.

- **Why this matters:** Maintaining step progression impacts employee retention and budgeting for federal workforce compensation across agencies.
- Agencies should review transfer policies to ensure compliance with 5 CFR 531.405 and avoid pay progression errors.
- Contractors supporting federal HR and payroll systems may find opportunities to enhance tracking and validation features for step progression during agency transfers.
- Organizations should advise employees on potential pitfalls with locality pay adjustments and alternative pay systems to safeguard earned benefits.

**Jurisdictions:** federal
**Industries:** Professional Services
**Topics:** Regulatory Compliance
**Published:** September 25, 2026

### Government Entities
- Federal Government

### Key Quotes
> If it’s just a lateral move, you’ll maintain your level and receive the step increase when time. However, keep an eye on it. The new agency I went to thought that my locality increase counted as a pay increase and reset the clock. I had to call and get it resolved.
> — Commenter

### Sources
- [Step progression for lateral move to another agency](https://www.reddit.com/r/FedEmployees/comments/1wpyf66/step_progression_for_lateral_move_to_another) - reddit-fedemployees