Weekend Reading on Your Federal Benefits 37-17

(for the week of September 9th – September 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 some of the most interesting and relevant news stories could help you 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 benefits news, we get the details on how to best conduct a RIF, learn that the TSP modified its hardship withdrawal rules for those affected by recent storms, discover the impact that your pension has on your salary if you return to work after retiring, and discuss if there’s a crisis of meaning in Federal service. That’s some heavy stuff, man. Let’s get started.

The Story of a RIF

From ChiefHRO.com

Agencies are currently in need of advice on how to run a Reduction In Force (RIF) because so few of them have the experience of conducting a RIF, and most have indicated that it will be necessary if they are to meet reduced budgets and personnel targets. According to Jeff Neal “RIF is the last and least desirable option for most agencies, so it’s not surprising that they have not developed and maintained RIF expertise.” But Jeff has! He relates in useful detail about the RIF that he was charged with conducting to help the Naval Aviation Depot in Jacksonville, FL avoid becoming a casualty of a Base Realignment and Closure (BRAC) action. Their plan called for eliminating 700 jobs to protect the base from being completely and permanently shut down, which would cause a loss of 3,200 jobs to the community. (Although it’s understandable that we focus on our own needs in situations such as these, we must remember that there are many local businesses and workers that support the facility and its employees which can also be affected.)

After reading Mr. Neal’s tale of the base, its employees, and the plan, the key ingredient of their success to me (if there is success in a RIF) was centered around communication. I was struck by how a lack of communication and even miscommunication (like rumors) were knocked down by Jeff and his team at every opportunity. They published the rumors, whether they were true or false, along with the real facts. They listened to employees who believed that they were incorrectly classified and established their own internal board to hear complaints. And I silently cheered (OK, maybe not that silently) when he said that they made the supervisors who determined which jobs were kept and which were eliminated face their employees by handing out the RIF notices – even though many supervisors would have preferred that Human Resources personnel did their dirty work. There are many useful and actionable ideas in this article no matter which end of a RIF you find yourself on.

TSP Loosens Emergency Withdrawal Rules for Feds Affected by Irma

From govexec.com

Two recent hurricanes (Harvey and Irma) have caused catastrophic damage in the US (and elsewhere) and many Federal employees have been affected. The administrators at the Thrift Savings Plan (TSP) have modified a rule for financial hardship withdrawals for those affected by either storm. The rule modification permits employees (not retirees -- financial hardship withdrawals are a type of in-service withdrawal) to take money from their account without being subject to the standard six-month waiting period to re-start contributions. This is only available for requests that follow the instructions the TSP provides on its web site and that are made within a stated time period for each storm. Instructions for both storms can be found here, and there’s an updated version of the Form TSP-76 that includes the rules for the recent hurricanes.

Although the Thrift Savings Board can modify their own plan rules, they don’t have the ability to change the IRS rules. That means that hardship withdrawals are still considered taxable distributions, and could be subject to a 10% penalty tax if the withdrawal is made prior to age 59½. Also, hardship withdrawals cannot be moved to an IRA, and the money distributed cannot be replaced (or re-deposited) to your TSP account later -- it’s a permanent distribution. FERS-covered employees lose matching contributions when not contributing, but will still receive the automatic 1% of pay contribution to their accounts. It’s best to get advice and consider all the issues before taking a hardship withdrawal.

What Impact Does Returning to Federal Service Have on Your Annuity?

From fedsmith.com

Believe it or not, some Federal employees return to Federal service after retiring. It’s not uncommon to feel bored or unfulfilled after you’ve retired. Or, maybe you got a call from your old boss who asked you to come back. You might have even discovered an interesting or exciting new job that would be a great fit for your skills and experience. But, if you’re already receiving your pension from the Federal government as a retiree you’re not going to also receive a full salary from your new position. Unless you take a part-time position or a position that has received a waiver, dual-income (a government salary and your government pension) is out of the question.

When you return to work, you’re considered a ‘re-employed annuitant’ and any compensation that you’re paid in your new job will be offset by the amount of your annual annuity. That’s the rule, even if you don’t like it. Many Feds I’ve spoken to have said ‘Why would I go back to work at my same job earning a fraction of what I was making when I left? My pension shouldn’t offset that pay. I’ve already earned that pension.’ You know, I just don’t have a response for that argument. It would seem to make sense.

The good news is that if you return as a re-employed annuitant you may be eligible to receive a supplemental annuity based on your further employment, or your entire pension benefit may even be recomputed after you ‘re-retire’. John Grobe provides more details in his article, and you’ll find further information from OPM’s FERS Facts 2 brochure (ri90-18).

There’s a Crisis of Meaning in Government Service

From govexec.com

Let’s close this week’s news with something big to think about and discuss. I usually focus on benefits and pay issues, but there seem to be lots of stress lately around people and their jobs. I don’t find that Federal employees typically have a ‘crisis of meaning’ when it comes to their work. Most seem to be engaged with their jobs and are focused on the agency’s mission. It’s typically private sector employees that are more unsure of the future and feel disconnected, but the authors here disagree. Due to the tumultuous changes taking place in the political and government spectrum, it’s likely that Feds are starting to feel a lack of meaning and purpose in their careers as well.

Dr. Viktor Frankl wrote in his classic Man’s Search for Meaning that “Everything can be taken from a man but . . . the last of the human freedoms—to choose one’s attitude in any given set of circumstances, to choose one’s way.” A lack of meaning can make you feel disconnected, overwhelmed and drained. Yes, you can always choose your attitude, but is it time for a ‘meaning revolution’ in government service?

See you next week. Thanks.

You can re-ignite your meaning and purpose by taking control – of your benefits. My “Understanding Your Federal Benefits” e-learning course can help you to become the boss of your benefits. And if you enroll now, you’ll also receive updated modules for whatever changes come our way in 2018. There’s a free trial that gives you the course introduction and first module at no charge. Give it a look

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Issue 37-17