Weekend Reading on Your Federal Benefits 4-18.jpg

(for the week of January 20th – January 26th)

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

Welcome back! In this week’s Federal benefits news, we know that another Continuing Resolution means it ain’t over yet, we discover how many Feds have joined the TSP Millionaires Club, and try to remember the real reason for our contributions to the Social Security program. Let’s get started.

Shutdown: It Ain’t Over When It’s Over

From ChiefHRO.com

Jeff Neal of ChiefHRO.com is not happy about the shutdown (and you’re probably not either). Although it only lasted over the weekend, the issues causing it have not yet been resolved. Another Continuing Resolution (CR) was adopted to re-open the government through February 8, but we’ll soon be one-third of the way into the current budget year with no budget! This continues to cause problems with uncertainty about 2018 funding for agencies, Spring and Summer spending, hiring, and the reputation of Federal workers. In fact, it’s your reputation that Jeff has the most to say about in this article.

Mr. Neal says the talk of ‘non-essential’ employees is just plain wrong. There is no category of employees deemed ‘non-essential’. Unfortunately, the argument then becomes “If they’re non-essential, why do we need them anyway? Why not just get rid of those employees?” We need to help the media and the press to be clear that there are exempt employees (paid through appropriations that are not part of the budget to be passed by Congress), excepted employees (who are engaged in activities necessary for safety like Border Patrol and air traffic controllers), and then there are furloughed employees (whose work, although necessary to run the government and provide services, are sent home without pay because their work doesn’t have the urgency of the excepted employees group). None of those employee designations is “essential” or nonessential.” You matter. Make sure everyone knows.

Update: Lawmakers Approve Post-Shutdown Back Pay for Feds

From Govexec.com

You’re probably tired of hearing about the shutdown, but here’s a brief ‘clean-up’ item that should close the issue for now. A bill was quickly pushed through that provides back pay for those affected during the brief shutdown.

January Marks First Month for Military Blended Retirement Option

From Govmatters.tv

Wait! Don’t go past this story just yet.

Yes, the title indicates it’s about blended retirement for the military, and you may not care if you’re a civilian, but at about 3:44 into this video of Francis Rose interviewing Kim Weaver, Director of External Affairs at the Federal Retirement Thrift Investment Board, you’ll hear about how the expense ratio for the TSP was lower in 2017 than in 2016. In fact, the cost per $1,000 invested dropped from 3.8 basis points to 3.3 basis points. The drop was driven by an increased number of participants (more folks to spread out the costs) and the fact that the TSP didn’t use all the budget money that had been allocated for 2017. Low expenses allow your money to grow faster, which makes me wonder. . ..

How Many Millionaires Are There in the TSP?

From fedsmith.com

Well, at the end of 2016, the TSP folks said there were 9,599 TSP millionaires, but Kim Weaver (the same Director of External Affairs mentioned above) reports that that number has increased to 23,962 as of the end of 2017. That’s quite a jump in one year (I bet the market had something to do with it), but it’s still a small percentage of the 5 million TSP participants (it works out to about 0.48%).

The article from Ralph Smith also includes a table of statistics on the number of participants with various account balance amounts and the average years the group has been accumulating their retirement savings. A story like this provides us with motivation to keep saving and shows that it’s possible to accumulate a nest egg that will keep us comfortable in retirement. Keep calm and save on.

Your Lost Savings on Social Security

From Fedsmith.com

“I could have been a millionaire if I had all the money that I’ve had to pay into Social Security.”

Brenton Smith says he never gave this claim much weight because most articles on the subject use bad math and inaccurate facts to make this argument. He performs his own math and concludes that the average person wouldn’t make it to millionaire status, which is more likely true. Would you have more money if you had saved it yourself, and invested it into the current rising stock market? Maybe, but what is forgotten in his argument (and so many others on this subject) is that Social Security is not supposed to be YOUR retirement plan. It’s really there to help someone else.

Social Security is a form of social insurance, not a retirement program. It was designed to support the fabric of our society and was developed during a time in US history (the late 1920s and early ‘30s) when we had people without any means to live after being forced to retire. Here’s what the Social Security Administration says about its mission: ‘Although the definition of social insurance can vary considerably in it particulars, its basic features are: the insurance principle under which a group of persons are “insured” in some way against a defined risk, and a social element which usually means that the program is shaped in part by broader social objectives, rather than being shaped solely by the self-interest of the individual participants”.

More recently, it seems our self-interest has been getting in the way of our interest in helping those who may ‘fall through the cracks’ later in life. Instead of thinking of Social Security as a failed investment program where you’re ‘spending quarters to buy dimes’, you might want to think of it more as placing your Sunday envelope in the basket that circulates during church. With Social Security, your tithing (although forced) will help others, and maybe even you, if you qualify.

See you next week. Thanks.

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