Spared from Pension Hikes

Spared from Pension Hikes

  • By Tammy Flanagan National Institute of Transition Planning
  • December 13, 2013
martellostudio/Shutterstock.com

I’ve recently conducted several webinars, and each included a question-and-answer period at the end. But there were many more questions than I had time to answer. So I thought I’d address some of them here.

In the current fiscal environment and pressures of sequestration, how likely is it that changes will be made to the federal retirement rules and benefits in the next year or two?

I don’t like to be the one to say “I told you so,” but I did. I keep my optimism that Congress won’t make too many changes to the retirement benefits of federal employees since this group represents such a large voting population and federal employees are well-represented in in the political system by a variety of labor unions and associations. Continue reading “Spared from Pension Hikes”

Federal Pensions Could Be At Risk — Again

Federal Pensions Could Be At Risk — Again

Rob Hyrons/Shutterstock.com

A provision that would require federal employees to contribute more to their pensions could end up as part of a House Republican plan to raise the debt ceiling, according to several news reports.

The House GOP leadership had been expected to unveil a bill on Thursday that would increase the current $16.7 trillion debt limit through 2014 in exchange for delaying the health care reform law for one year and implementing several other deficit reduction and economic growth proposals Republicans favor. Lawmakers reportedly are considering changing the federal retirement system by requiring employees to contribute more to their pensions to help pay for the debt ceiling increase.

It’s not clear how much more House lawmakers would ask federal workers to put toward their retirement benefits, if such a provision is included in the legislation. Right now, most enrollees in the Federal Employees Retirement System contribute 0.8 percent of their pay to their pensions, with the government picking up 11.9 percent, for an overall 12.7 percent contribution. FERS employees also contribute 6.2 percent of their pay to Social Security as well as a percentage to their Thrift Savings Plan, the government’s 401(k)-style defined contribution program. FERS employees not subject to mandatory retirement who retire before age 62 — or the age at which their Social Security benefits kick in – receive an additional benefit, known as the FERS Annuity Supplement. Continue reading “Federal Pensions Could Be At Risk — Again”

A Little Extra Under FERS

A Little Extra Under FERS

Almost half of all employees who retire under the Federal Employees Retirement System are entitled to receive the FERS Supplement. The supplement is a temporary boost to the basic retirement benefit designed to take the place of the Social Security tier of FERS when an employee retires at an age younger than 62. Those who retire under the Voluntary Early Retirement Authority option also are entitled to the FERS supplement when they reach the FERS minimum retirement age of 55 to 57, depending on their year of birth.

In 2011, a total of 37,839 employees retired under FERS. Of those, 18,490 were not eligible to receive the supplement, since they were retiring at 62 or later — or on a disability retirement or an immediate or postponed “MRA+10” retirement (a reduced benefit for employees who are old enough to retire, but don’t have the minimum service required for an unreduced benefit). The supplement is payable when you retire at the MRA with 30 years or more of service, or at age 60 with at least 20 years of service. It also is payable to employees who retire under special provisions, such as law enforcement officers and firefighters. Continue reading “A Little Extra Under FERS”

A Look Back

Retirement PlanningRetirement Planning

Advice on how to prepare for life after government.

A Look Back

With all of this talk of cliffs and cuts and chains, it’s no wonder some federal employees are beginning to panic. While it’s still not clear what changes might come in the federal retirement world in 2013 as Congress and the White House seek to seal a deficit reduction deal, I thought we could at least take a look back at some of the things that happened in 2012.

Let’s start at the beginning, almost a year ago.

January

Civil Service Retirement System retirees (including survivor annuitants), Social Security recipients and military retirees received a 3.6 percent cost-of-living adjustment. CSRS retirees whose benefits began between Jan. 1, 2011 and Nov. 30, 2011, received a portion of this COLA based on the number of months they were retired before Dec. 1, 2011.

Federal Employees Retirement System retirees, eligible survivor annuitants and members of special groups such as law enforcement officers and firefighters received a “diet COLA” of 2.6 percent. FERS retirees who were entitled to the COLA, but whose benefits began between Jan. 1, 2011 and Nov. 30, 2011, received a pro-rated COLA. Continue reading “A Look Back”

Federal Employees Already Have Given Enough

August 1, 2012

The 2.6 million civilian employees of the federal government perform a multitude of jobs on behalf of the American people, including but not limited to, care for veterans; administration of Social Security, veterans benefits, Medicare, and Medicaid; collection, processing, and delivery of mail; border security; guarding inmates in federal prisons; ensuring the safety of the airline passengers; and enforcing law and regulations regarding public health, environmental protection, fair housing and housing for the poor, workplace safety, private pensions, wage and hour standards, and logistics, administration, repair, and maintenance of weapons and other support for our military.

Federal employees are substantially underpaid for performing this important work. Salaries of federal employees are on average 24 percent below those of comparable jobs in the private sector. Their health insurance is less generous than that provided by large firms in the private sector. Their pensions are equivalent—not more generous—than those provided to employees of large private firms. Continue reading “Federal Employees Already Have Given Enough”