Thinking about retiring in December or January? They are the most popular time for feds to pull the plug. So if you are thinking about that time period, keep these two dates in mind:

• December 31, 2008 if you are under the new FERS retirement system.
• January 2, 2009 if you are under the older CSRS retirement system.

The ultimate authority on this is, as always, benefits expert Tammy Flanagan. Each year she does the math and comes up with the magic dates. So why the 31st and the 2nd?

Timing your retirement to the “magic date” has three advantages:

1. It will allow you to carry over the maximum amount of use-it-or-lose-it annual leave.
2. Most of that leave will be paid at the new higher pay rates that go into effect with the first pay period beginning on or after January 1 of each year. For many high-paid feds with lots of unused leave (and especially for members of the SES) getting a payout at 2009 pay scales could be worth thousands of extra dollars.
3. By leaving on the magic date, your lump sum annual leave payment will be considered as income for 2009.

Qualifying for the Retiree COLA

Federal-military and Social Security retirees will get a cost of living adjustment in their January, 2009 checks. With one month (this month, September) left in the inflation-tracking countdown, the 2009 COLA pay is now on track to be 6.2 percent. CSRS retirees will get the full COLA. Those retired under the FERS program will get a diet-COLA, that is one percentage point lower than the full COLA. That so-called diet COLA, by the way, is 100 percent more than most private sector retirees get.

That COLA will be higher if living costs, as measured by the Consumer Price Index, rise this month. It will be lower if, unlikely as it is, the CPI drops. But there will be a raise. That’s the law.

Each year, retirement-bound feds try to figure out how to cash in on the January COLA. A number of readers have asked us if they can retire in December or January and get the January COLA (as well as being paid the higher 2009 pay rate for their unused annual leave). Short answer:

NO, NO, A THOUSAND TIMES NO!!!

COLAs are for people who were and are retired during the period when the inflation test is applied. COLAs are pro-rated based on when you retired. To get the full January 2009 COLA you would have to have been retired by December 2007, or earlier.

People who retired last January would get 11/12ths of the COLA. People who retired this month (September) would get 3/12ths of the COLA. And so on.

For details on how the COLA is figured, and the pro-rating formula, click here.

Pay Raise

Most white collar federal workers are due a pay raise in January. It will be up to Congress and the White House to determine if that base figure is 3 percent (what the President budgeted) or 3.9 percent which is what Congress is working on, although not too hard. Once that base pay figure is determined the President is likely to allocate 1 percentage point to locality pay adjustments. That would result in very different pay raises for feds, based on where they work. For a look at that locality pay system, click here.

NARFE Election-Early Results

The National Active and Retired Federal Employees Louisville convention will vote today for national officers. The fight for delegates at NARFE conventions is always much, much tougher than anything the Republicans and Democrats do. But a lot of the pressure is off delegates. That’s because President Marguerite Baptiste was unanimously reelected yesterday, after her challenger dropped out to run for another highly-contested office.

Nearly Useless Factoid

From Discover Magazine’s “Ten things you don’t know about the Earth”, if you shrank the Earth down to the size of a billiard ball, the Earth would be the smoother of the two.

To reach me: mcausey@federalnewsradio.com

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