Weekend Reading on Your Federal Benefits 41-18.jpg

(for the week of October 5th – October 11th)

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, OPM’s Director is brutally removed, retirees will get the largest COLA in seven years, we’ll talk about protecting yourself and your family from a disability, and quiz you to see if you can tell the truth from fiction when it comes to retirement. Let’s go.

Behind the Trump Administration's 'Brutal' Decision to Remove Its Federal Personnel Chief

From Govexec.com

On Wednesday, Director of the Office of Personnel Management (OPM) Jeff Pon resigned. From the news reports, it doesn’t really sound like it was voluntary though. The President immediately installed Office of Management and Budget (OMB) Deputy Director for Management Margaret Weichert as acting director.

As you may have heard, the White House is looking to pull the policy-making part of OPM out and move it into the Executive Office of the President. Many other functions would apparently move into the General Services Administration (GSA). Although Dr. Pon seemed onboard initially, his position on stripping the agency of its independence appeared to soften after talking with many different stakeholders. Since he wasn’t moving fast enough to get the White House what it wanted, he and his senior aides are out. One anonymous source expected morale to drop and attrition to increase at the agency as a result. There will likely be lots more news of changes to come—and sooner now.

2.8 Percent COLA Announced

From Fedweek.com

This week we learned that Federal retirees will receive the largest Cost of Living Adjustment (COLA) for their pensions in seven years. The increase is 2.8% according to an announcement made by the Social Security Administration (SSA) this week. Feds who retired under the Civil Service Retirement System (CSRS) will receive the full amount, while those who retired under the Federal Employees Retirement System (FERS) will receive 2% based upon the modified COLA formula for their benefit.

Here are a couple more things to remember about the COLA. To receive the full amount, you must have already been a retiree for a full year. If you retired more recently, the COLA amount that you receive is prorated. Also, FERS retirees don’t begin receiving the COLA until reaching age 62 (with some exceptions for disability, survivor benefits, and employees under special provisions.)

I often find that employees that I speak with confuse the COLA (which is for employees who are retired) with a pay raise (which is for employees who are not retired). They’re not the same thing. And, by the way, we’re still keeping an eye on the status of the expected pay raise which won’t likely see any movement until Congress returns after the November elections.

Pop Quiz: Can You Tell Truth from Fiction in Federal Retirement?

From govexec.com

I hope you’ve been studying because Tammy Flanagan chose to give us a pop quiz this week. As she mentions, there is lots of information floating around out there, and not all of it is correct. It’s important to make sure that you’re getting correct information about your benefits before making decisions which could have a big impact on you and your family—while you’re working, as well as in retirement.

Using the government’s resources like OPM’s website and handbook or the TSP website can be valuable, although it can be difficult to dig out the information from everything that’s available. Benefits Specialists and HR personnel can also be helpful, but sometimes are hard to reach since they are usually very busy. Outside advisers can provide personal help and expertise, but you’ll want to find one who has unique knowledge of your benefits programs in addition to general financial planning expertise. Why not give the quiz a try and see how you do? It won’t affect your final grade.

Are You Covered for a Disability as a Federal Employee Outside of Work?

From Fedsmith.com

The Department of Labor’s (DOL) Office of Disability Employment says that October is National Disability Awareness month which makes it a good time to think about something that we really don’t want to think about—what would happen to you and your family if you were injured and unable to work?

If you’re injured on the job, the Federal Employees’ Compensation Act (FECA) can provide you with compensation. Benefits under FECA are administered by the Department of Labor’s Office of Workers’ Compensation. As a Federal employee, you’re generally eligible regardless of the type of position or time on the job (part-time, seasonal, temporary, intermittent, and term employees are covered), but your disability must be due to a personal injury suffered while in the performance of your regular duties while on the job. But what if you’re not injured while on the job?

If you’re injured while outside of work, you could use your annual leave, although most Feds would prefer not to use accumulated leave time for an injury if they don’t have to do so. Taking unpaid leave is a possibility, as author David Quiett mentions in his article, although taking unpaid leave won’t solve the problem of where your income will come from though. If your condition is expected to last for more than one year, you may consider taking a disability pension. Both CSRS and FERS provide this option if you meet the requirements, but this means you’re retiring from service under the pension disability rules. You may also be eligible for Social Security disability payments (although their strict definition of disability can be difficult to meet.)

Should you consider purchasing your own disability insurance to provide income when you can’t work? When should you do it, how much should you purchase, and what would it cost? Those are questions that we would have liked to see this article discuss more deeply. Let’s continue searching for those answers.

See you next week. Thanks!

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