Weekend Reading on Your Federal Benefits 17-18.jpg

(for the week of April 21st – April 27th)

You’re too busy during the week to keep up on all the news around your employee benefits and pay. My weekly summary of the most interesting and relevant news stories could help you and includes my comments and insights.

By the way, if you’ve read something about your employee benefits that you think is important or interesting, share it. And, let me know about news sources that you follow. Have a great weekend.

George Ray
Federal Benefits Online

In this week’s Federal benefits news, there’s a new budget proposal with the same old solutions, OPM seeks to make job transfers seamless, a tax snafu is causing high tax bills for some mobile Feds, and we get answers to the questions ‘what’s a CHCO and why do we have them?’. Let’s get started.

RSC Budget Echoes Recent Proposals to Cut Federal Employees’ Pay, Benefits

From Fedsmith.com

A ‘Framework for Unified Conservatism’— that’s the title of the recently released 2019 budget proposal from the Republican Study Committee (RSC). The main objective of the proposal is to cut the Federal deficit by $12.4 trillion over the next 10 years to curb the nation’s ballooning debt and avoid a sovereign debt crisis. In this article, Ian Smith of Fedsmith takes us through those recommendations that could have the most relevance to the Federal workforce.

The proposal includes decreasing by 0.5% the formula for automatic pay increases, which most Presidents haven’t followed since the law was enacted (there’s already been a proposed pay-freeze for 2019). Of course the usual suspects are rounded up and lined up against the wall with regard to pension plan reform, including a switch from ‘High-3’ average pay to a ‘High-5’ calculation, increasing employees contributions to FERS, eliminating or reducing the COLA for retirees, eliminating the Special Retirement Supplement for FERS, and reducing the interest rate on the TSP’s G Fund (which I wrote about last week in a lengthy piece titled “What if They Change the G Fund?’).

The report goes on to suggest a reduction in the overall size of the Federal workforce, the elimination of the use of official time by union representatives and recommends that employees pay an increased amount of their FEHB health insurance premiums. These proposals don’t break much new ground, but as I’ve said, their continued pervasiveness should begin to concern those who are watching for what’s coming.

OPM Seeks to Make Transfers Among Agencies ‘Seamless’

From Fedweek.com

One of the many challenges employees face in their Federal service is getting their personal records from one agency to another after a transfer to a new agency. OPM recently announced a new plan to ‘seamlessly’ transfer employee records using digital record data standards that it plans to have in place by September 2019. The system would provide employees and HR representatives with standards that could improve the employee ‘onboarding’ process and the processing of retirement applications. I’ve heard many stories from employees during my benefits training sessions on situations where information was not transferred, was incorrect, or even lost in some cases. Those who’ve waited until late in their careers to track down service history from years earlier can tell you that it can be difficult and can even potentially delay your retirement. I always recommend that you keep records of all your service history, and though the use of electronic personnel files has made it easier, OPM’s plan will be welcomed by employees everywhere.

Democratic Senators Demand Swift Resolution to Snafu That Left Some Feds with High Tax Bills

From Govexec.com

Sources at the Senior Executives Association say that the General Services Administration (GSA) is already moving to fix a problem for Feds that arose as a result of the passage of the recent tax bill. A provision in the 2017 tax law removed a deduction for job-related moving expenses, and as a result, a number of Federal employees found themselves on the hook for sizable tax bills. Some senior executives found themselves facing a one-time paycheck deduction of up to $7,000. Ouch!

The law now taxes employer reimbursement for moving expenses as ordinary income and removed the deduction for job-related moving costs. So, if your agency assigns you a new duty station and you have been provided with a reimbursement for moving, it is considered income and is taxable. There is currently a remedy in place to correct this (a relocation income tax allowance) but the fix hasn’t yet been adjusted to take into account the tax bill changes. Virginia Senators Mark Warner and Tim Kaine wrote to the GSA recently to get the adjustments made as quickly as possible.

What is a CHCO and Why Do We Have Them?

From Chiefhro.com

With the recent push on Civil Service reform and pay-for-performance, as well as benefit changes that have been proposed by Congress, the role of the Chief Human Capital Officer (CHCO) has been in the spotlight. OPM’s new director, Dr. Jeff Pons (a former CHCO himself), recently issued a call to agencies to install CHCOs who have ‘the trust of the Secretary or agency head and serves as an integral part of the leadership team”. Jeff Neal of chiefhro.com (himself a former CHCO for the Department of Homeland Security) answers the question ‘what is a CHCO?’ and discusses the importance of the role in his post this week.

When enacted in 2002, the Chief Human Capital Officers Act required 24 agencies to establish CHCO positions to advise and assist the head of the agency and other agency officials in carrying out the agency’s responsibilities for selecting, developing, training, and managing a high-quality, productive workforce in accordance with merit system principles, as well as identifying required functions of CHCOs. As a result of his experience as a Chief Human Capital Officer, Jeff has some ‘next steps’ that he considers important if CHCO’s are to have the power to accelerate change and improvements across the Federal government.

See you next week. Thanks!

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