Weekend Reading on Your Federal Benefits 24-18.jpg

(for the week of June 9th – June 15th)

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, Senators tell OPM to leave your retirement plan alone, there’s more talk of increasing the maximum buyout amount, the TSP doesn’t want you leaving money on the table, and do you think you can pass a retirement quiz? Let’s see what you know.

Over 25 Senators Urge OPM to Drop Proposed Retirement Changes, Focus on Recruitment Challenges

From Federalnewsradio.com

Firstly, can we just acknowledge that Federal News Radio’s reporter Nicole Ogrysko certainly must be eligible for some kind of prize for the longest headline ever? I’m not sure you even have to read the story if you’ve read the headline.

In the past, we’ve talked about how Congress has wanted to change (i.e., reduce) your benefits and heard the proposals that have been made. More recently, I suggested that just like in the horror movie, the threatening call was actually coming from inside the house when Dr. Pon at OPM said that he believes those changes to your pension, retirement supplement and more are needed. But last week we heard OPM’s Director suggest that maybe we could just ‘sunset’ the FERS plan and leave that benefit available to those in the plan currently. And then start a different retirement (and less expensive) plan for newly-hired Feds.

Now, it appears that we’re coming full circle with 25% of the Senate urging Director Pon to keep his hands off your pension and focus instead on recruitment and retention goals for the workforce. The Senators in their letter said, “We fear that these cuts are motivated by an ongoing effort to balance the budget on the backs of federal workers rather than an effort to provide a comprehensive approach to modernizing federal employee compensation.” I think we’ve been saying that all along. Is anyone listening?

40K Buyout Included in Defense Bill before Senate

From Fedweek.com

Let’s try this again. Back in 2016, Congress approved a higher amount for Feds who are offered a buyout to leave Federal service. A buyout is shorthand for the correct term which is Voluntary Separation Incentive Payment (also commonly referred to as a VSIP). Congress increased the maximum amount that an agency could provide to a departing employee from a maximum of $25,000 (where it had been since the early 1990’s) up to $40,000. But the increase was only available to Department of Defense employees (as part of the Defense Authorization Act) who were leaving, not for employees at other agencies.

Congress tried to change that more recently so that all Feds could potentially receive the higher amount but things were thrown off track by . . . . well, politics. They’re trying again though. The increase has made it into the Senate version of a new bill, but the House version still lacks the provision to increase the maximum. That, and some other differences between the bills will need to be settled-- but let’s keep our fingers crossed that this becomes available for all agencies. It’s only fair.

Thrift Savings Plan Makes Changes to Pay & Benefits Package

From Govmatters.tv

Kim Weaver, Director of External Affairs at the Federal Retirement Thrift Investment Board (FRTIB), discusses changing the default contribution for your TSP in this 5½ minute video interview with Government Matters TV host Francis Rose.

As you may know, the TSP’s default contribution for new employees is 3%. This means that when you start working as a Federal employee if you don’t choose your own contribution level, your agency will automatically deduct 3% of your salary (before taxes) from your paycheck and contribute it into a TSP account for you. (You can always change this or stop it if you choose.) This will get you a dollar-for-dollar matching contribution to your account of 3%. But, if you contribute another 2% (for a total contribution of 5%), you’ll receive an extra 1% match (that’s 50 cents on the dollar for each additional percent). Currently, according to Ms. Weaver, about 22% of Federal employees are leaving that extra money ‘on the table’.

The TSP folks already have the legislative authority to increase the default contribution up to 5% and will be doing just that beginning in 2020 to help those who may not realize that they’re losing those extra matching contributions. If you’re already maximizing your contributions, this likely won’t affect you. But the good folks at the Thrift Savings Plan board are working hard to make sure that Feds can retire comfortably. And that’s a good thing.

Retirement Facts: A True-False Quiz

From Govexec.com

This could be fun. Who doesn’t like a good quiz? Government Executive columnist Tammy Flanagan wants to test your benefits knowledge with a true-false quiz on retirement facts this week. She has ten questions for you and provides the answers right below the questions. No cheating.

The questions cover your Federal Employees Health Benefits (FEHB) plan, Medicare Part B, Social Security, and things like Minimum Required Distributions (RMDs) from your TSP. Many of these questions have been asked of me during benefits training sessions and sounded very familiar. I’m sure Tammy gets asked the same questions as well. Not to brag, but I got 100%. See how you do. A seven out of ten should be worth celebrating with a cool beverage by the pool this weekend.

See you next week. Thanks!

Get the help you need to understand and wisely use your benefits. Do it when you’re ready and at your own pace. Let me be your guide to “Understanding Your Federal Benefits” and become the boss of your benefits with my comprehensive e-learning course. There’s a free trial that gives you the course introduction and first module at no charge. Give it a look. You’ll like what you see.