Weekend Reading on Your Federal Benefits 36-18.jpg

(for the week of September 1st – September 7th)

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 benefits news for Feds, the White House wavers on the pay freeze, there are good reasons why agencies shouldn’t quietly settle cases with bad employees, there is power in your TSP savings, and man it’s hard to calculate your FERS Special Retirement Supplement. We’d better get started.

Trump Appears to Waver on Pay Freeze

From Govexec.com

Well, that didn’t last long. Twenty-four hours after the President issued an order to freeze your pay for next year, he decided that he should give it some additional consideration. The pay freeze was originally proposed in the White House’s budget plan back in March. After an outcry from Federal unions, many Democrats, and some Republicans who may be vulnerable to losing their seats in the coming elections, Trump has decided to study the issue further.

We’re still waiting for the house to do something about this as the Senate passed a 1.9% increase earlier this year. The funding for the Defense Department includes a 2.6% raise for the military, so many Feds are also advocating for parity between civilian employees and military members. Shouldn’t your increase be the same as for our soldiers? I bet you’d agree.

Three Reasons Why Agencies Should Not Settle Cases

From ChiefHRO.com

Jeff Neal of ChiefHRO thinks it’s a bad idea for agencies to settle cases with Feds who are poor performers or those who cause trouble. When settlements occur, the agency may get rid of a bad employee but the misconduct that brought about the case is often not disclosed on the employee’s record. This means that another agency may hire the problem employee without knowledge of what they’re getting themselves into.

In other instances, Jeff believes that the agency should fight all the way to the end particularly in cases where there was sexual harassment or theft of government property involved. He recommends that agency leaders take the moral and ethical ‘high road’ by fighting the case to expose the employee and his behavior (which if not made public will likely continue at another agency). Mr. Neal is also of the opinion that settling a case quietly and off the records does not allow for the necessary transparency that should be made public. The ChiefHRO is right. Agency heads need to start standing up for good employees and demonstrate their value by getting rid of the bad employees, and doing so publicly—not through the use of settlements.

The Power of TSP Savings

From Govexec.com

There is no doubt that the Thrift Savings Plan (TSP) can be a powerful instrument for your retirement if it is used wisely well before you ever get to retirement. In this week’s column for Government Executive Tammy Flanagan reminds us of its value and talks a look back at a brochure from 1987 which told Federal employees that the TSP could produce a third of your retirement income if you added money diligently throughout your career.

Tammy likes a savings strategy which I also typically recommend. When you receive a raise, divide it into three parts. Part one will be a little extra to help pay the taxes on the increase. Part two will be extra money to spend, but part three will be added to your Thrift Savings Plan. It’s important to make this allocation prior to getting your increase so that you haven’t already thought about how you’re going to spend all that extra money you’re going to be getting. You might also consider contributing a percentage amount rather than a dollar amount. When you receive a raise, additional dollars will go into your TSP simply because the percentage amount being contributed is being made from a little larger amount of pay.

A New Tool for the Annuity Supplement

From Fedsmith.com

If you’re a Federal employee who is covered under the Federal Employees Retirement System or FERS, you should know that if you qualify for a full, immediate annuity or pension benefit, you may also have an opportunity to receive a Special Retirement Supplement. It’s available because you are eligible to retire, but not yet eligible for a Social Security retirement benefit. And, by the way, you will stop receiving it when you reach age 62 and become eligible for a retirement check from Social Security- whether or not you apply for your reduced check at age 62 or wait until your full Social Security retirement age.

During my benefits briefings, I offer a ‘simplified’ formula which can provide an estimate of the amount of your Special Supplement, and an estimate is usually good enough to help you plan your retirement income since the actual calculation is a bit more complex. In fact, as author Robert Benson says, “The Office of Personnel Management (OPM) has no computer program for calculating the supplement. This is why it takes an average of three hours for them to do just one case.” You can read more about the suggestion Mr. Benson makes in his article. You’ll find my suggestion in Module 5 of my ‘Understanding Your Federal Benefits’ online course. (The link to enroll in my course can be found below.)

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.