Weekend Reading on Your Federal Benefits 45-18.jpg

(for the week of November 3rd – November 9th)

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 mid-term election results are expected to have an impact on your Federal pay and benefits, and we can retire six myths about Federal retirement benefits. Let’s get started.

Note: There was some other big news taking place on Tuesday this week (Really, Captain Obvious?) that caused a lack of Fed-oriented news. That means I found just two stories worth sharing with you this week. But what could be better than results, predictions, and myths?

And speaking of elections-- don’t forget that Open Season begins Monday, November 12th and runs through Monday, December 10th this year. Your agency has probably already provided you with lots of information to help you make your benefit elections for 2019 but consider attending a nearby benefits fair to get your questions answered. And of course, if you go, there’s also squeezy balls, hand sanitizers, toothbrushes, eyeglass cleaning cloths, lip balm, leftover Halloween candy, and so much more.

One last item: They make tremendous sacrifices for us, so please be sure to say ‘thank you for your service’ to all our servicemen and women, and especially to Veterans this Monday (and why not every day?).

Mid-Term Elections and Federal Employee Pay and Benefits

From Fedsmith.com

I think we can all agree. Thankfully, the mid-term elections are over. Now we can all get back to watching those drug commercials that seem to contain five minutes of disclaimers about the side of effects of the drug they’re advertising (Don’t take blah blah if you’ve ever had a kidney stone as it may cause bleeding, bloating or blindness. And call your doctor if you experience . . . .).

The results, as I’m sure you’ve heard, are that the Democrats control the House and the Republicans continue to control the Senate. Ralph Smith thinks this is a positive outcome for Feds because ‘a Democrat will now be in charge of the House Oversight and Government Reform Committee. It is likely that this committee chairman will be Elijah Cummings, a Democrat from Maryland.’ That means bills coming out of this committee will likely be more generous towards Federal employees. That could be good because we’ve had about enough of trying to cut back COLAs, asking Feds to contribute more to their pension, changing the pension formula, trying to eliminate the Special Retirement Supplement, and on and on.

The challenge with a divided Congress is that even though Democrats have historically been more favorable to Feds, getting anything pushed through both the House and the Senate and across the desk of the guy who likes to sign his name really big and hold it up to show everyone is going to be difficult.

Mr. Smith suggests that one area that may be advantaged by all of this is your Federal pay. You’re more likely to see a raise stuffed inside some legislation rather than deferring it to the President. In a large appropriations bill, ‘a sentence granting a Federal pay raise is relatively insignificant in the overall Federal budget and more likely to be passed.’ We’ll see.

6 Myths About Federal Retirement Benefits

From Govexec.com

This week Tammy Flanagan’s column for Government Executive includes a photo of a unicorn. Okay, I get the idea. We’re going to talk about myths. There are a lot more than six myths when it comes to your benefits, and I think I’ve heard most of them. We won’t address all six that she included, but let’s talk about three of them.

Myth 1: Social Security will not be there when I retire. Well, it very likely will be, although there has been talk that benefits may need to be modified to account for all the baby boomers retiring and the fact that there are fewer people behind the boomers to pay into it. Some financial advisers suggest not factoring it into your retirement plans, but most retirees (FERS included) will be glad to have it.

Myth 2: The G Fund is the best place to keep my Thrift Savings Plan account safe. That depends on how you define ‘safe’. Many Feds confuse a lack of volatility with safety. Yes, it doesn’t go up and down in value like the other funds do every day. And it never goes below the amount that you put into it. But, how safe will you feel at retirement when you can’t live comfortably? Or when you run out of money before you run out of life? That’s why you often hear that it’s a good idea to use some of the other investment funds inside the Thrift Savings Plan too.

How about Myth 6? Ms. Flanagan says that the belief that CSRS is better than FERS may have finally been laid to rest. I’ve had more than one Fed who had to give the class I was teaching his two cents on how Feds got the shaft back in the mid-80’s when CSRS was phased out. We can probably agree that it has taken time to prove this out, but a combination of FERS pension, Social Security, and diligent savings in the TSP has allowed many Feds to retire with grace. Heck, there’s even several thousand TSP millionaires these days. Check out the rest of her myths to see if you’ve heard them, or still believe.

See you next week. Thanks!

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