Feds Would Pay More Toward Pensions Under Proposal

Feds Would Pay More Toward Pensions Under Proposal

By Kellie Lunney; October 23, 2015

Rep. Scott Rigell, R-Va, introduced the bill. Rep. Scott Rigell, R-Va, introduced the bill. Carolyn Kaster/AP

Many federal employees would pay more toward their pension benefits under a new House bill aimed at providing relief from sequestration and protecting Medicare and Social Security.

Rep. Scott Rigell, R-Va., has introduced legislation that would restore 75 percent of the sequester spending cuts to defense and non-defense budgets with proposed savings and revenue elsewhere, including an increase in the amount of pay that federal employees hired before 2014 have to contribute to their pensions. Specifically, Rigell’s bill would apply the higher retirement contribution rates that federal employees hired in 2014 or later have to pay now to all federal workers under the Federal Employees Retirement System.

For many federal employees who currently contribute 0.8 percent, that would be a 3.6 percentage point increase per paycheck.

Continue reading “Feds Would Pay More Toward Pensions Under Proposal”

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”

Impact of budgetary hit to federal retirement weighed

Impact of budgetary hit to federal retirement weighed

Requiring federal employees to pay more toward their retirement benefits would have an uncertain effect on recruitment of new workers but likely would spur some current employees to leave earlier than they would have otherwise, according to a recent analysis done for Congress.

Increasing the required contributions, and the potential impact of doing so, has been under consideration in negotiations over budget levels for the remainder of the current government fiscal year and for fiscal 2015.

Furloughs and Your Retirement

Well, it’s furlough time — or, as my friend Herb Hayes calls it, “furl-ouch.” Suddenly, every day feels like a snow day. But where I live in Northern Virginia, the sun is shining and it’s as hot as a summer day in mid-July. When government shutdowns happen, it is not as much fun to have a day off as some people seem to think. The emotions are many: fear (will I be paid?), curiosity (how is everyone handling the situation?), and anger (why would our government allow this to happen?).

While I’m not currently a federal employee, I am a government contractor who also is affected, because there are no employees at work to attend my pre-retirement seminars. I always try to look on the bright side of any situation, but there are many people — feds as well as those who depend on the government to stay in business — that will not see any bright side to this situation. Continue reading

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”