Issue 33-17
(for the week of August 12th – August 18th)
You’re too busy during the week to keep up on all the news around your employee benefits and pay. My weekly summary of some of the most interesting and relevant news stories could help and includes some of my insights. You might just refer to it as “What’s George been reading this week?”
By the way, if you’ve read something about your employee benefits that you think is important or interesting, send it to me. And, let me know about news sources that you follow. Have a great weekend.
George Ray
Federal Benefits Online
In this week’s news, the EPA Inspector General criticizes its own buyout effort, OPM directors discuss the impact of reorganization on the Federal workforce, the Congressional Budget Office sees no ill effects on modernizing your TSP, and how the VA Choice Act may drive reform into agencies other than the VA. I’ve also included a follow-up to my recent blog post on getting credit for non-deduction service which focuses on the three questions you should ask yourself before making a deposit. Let’s get started.
EPA Inspector General Criticizes Its Own Recent Buyout Effort
From Govexec.com
Last week we heard that the Social Security Administration was making early retirement offers and buyouts available to ALL their employees (except for Administrative Law Judges) against the advice of OPM’s standard directions to agencies (found in OPM’s Guides to VERA and VSIPs). This week we hear that the Inspector General (OIG) for the Environmental Protection Agency (EPA) found that its own efforts in 2014 to trim its own OIG workforce provided buyouts and early retirement offers to those who weren’t in positions that were targeted for elimination. In fact, almost half of those who received buyouts or early retirement in the EPA’s OIG office occupied positions not authorized by OPM for elimination, and none of those positions were subsequently abolished.
The result was $347,000 of erroneous payments (to eleven employees who weren’t entitled to separation incentives) and 23 positions that were supposed to be eliminated but weren’t. The OIG’s report said that “minimal supervision and management oversight” of the buyout program was a key contributor to the effort’s failure to meet the office’s goals. The office is working to correct its errors, and let’s hope that future efforts receive the management oversite necessary to properly execute any new incentive programs as the EPA is expecting to let go of many employees due to a much smaller 2018 budget.
Side note: Those looking for help with deciding on whether to accept an early retirement offer and/or buyout may find my video titled ‘A Federal Employee’s Guide to VERA and VSIPs’ to be helpful. It’s available at this link.
Impact of Agency Reorganization Effort on Federal Workforce
From Govmatters.tv
This a video of an eight-minute interview with Leslie Pollack, deputy associate director of HR strategy and evaluation solutions at the Office of Personnel Management, and Jason Parman, HR strategy branch manager at OPM, discussing the impact that agency reorganization efforts are having on the federal workforce.
Agencies have been ordered by the current administration through the Office of Management and Budget (OMB) to develop long-term plans to reduce the size of their workforces over the next two years. Accomplishing this objective will include restructuring and realignments for most agencies, as well as the elimination of employees. Offering incentives (i.e., early retirement offers and cash buyouts) will help with workforce reductions, but many agencies have said that they will also need to execute Reduction in Force (RIF) actions.
RIFs are not something that agencies or employees want to deal with, but one of the positive effects of this order is that agencies are being given an opportunity to fundamentally re-examine the tasks they perform and whether those tasks should continue to be part of their mission. By asking the question ‘should we still be doing this’, they may find that the answers are much different today than they would have been five or ten years ago.
CBO Weighs in on the TSP Modernization Act
From Fedsmith.com
Ian Smith reports on the TSP Modernization Act and provides us with a follow-up to a story that I’d written about previously, It’s About Time You Had More TSP Distribution Choices which offers additional detail on the bill. In my original story from April, I mentioned that the Congressional Budget Office (CBO) had not yet had a chance to score the effects of the Portman-Carper bill which would provide TSP participants with expanded and more flexible distribution options.
The CBO recently issued their comments on both the House and Senate versions of the bill, and its conclusion is that the bill would ‘not affect direct spending’ although the additional withdrawals that could be made by participants could affect the timing of taxes paid on the amounts withdrawn. The tax effect ‘would be negligible’ as the government will still receive taxes on withdrawals, but the timing may be somewhat different. I continue to believe that we will need to see increased staffing by the Thrift Retirement Board to assist with the increased amount of distributions that participants will request. No discussion or announcement on that yet from the good folks at the TSP.
How the VA Choice and Quality Employment Act of 2017 May Drive Civil Service Reform
From ChiefHRO.com
Jeff Neal considers the VA Choice and Quality Employment Act of 2017 in his most recent blog post. Although the Act, signed into law on August 12th, provides reforms that are targeted specifically to the Veterans Administration, Mr. Neal believes that it will be a foretelling of changes to come in other agencies. Much of the law is designed to improve the hiring process – providing the VA with more flexibility when hiring and re-hiring candidates. It should also help with gaining new younger employees which is a challenge for the Federal government (those age 30 and under make up only 7.9% of the total Federal workforce).
Answer These 3 Questions Before Making a Deposit
From federalbenefitsonline.com
In a previous post (Get Credit for Non-Deduction Service ASAP), we covered an issue that could potentially cost you tens of thousands of dollars over the course of your retirement. The issue is getting credit for service that you performed for which a deduction was not taken from your pay and contributed to the Civil Service Retirement and Disability Fund. As you now know (if you read the earlier post), you can receive credit for this service (making it ‘creditable’) by paying a deposit for it.
When discussing non-deduction service during a benefits training program, I suggest that there are three logical questions that you’ll need to answer before you can decide if making a deposit makes sense. By the way, these questions should also be asked if you’re considering making a re-deposit (i.e., replacing contributions that you took out after leaving service previously) or making a deposit for military service (i.e., military service that wasn’t credited toward a military pension). This is primarily a ‘numbers issue’, so here are the three questions . . .
See you next week. Thanks.
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Issue 33-17
Published by Federal Benefits Online.
Copyright © 2017
Author: George Ray