Feds waiting for the other retirement shoe to drop

Federal Report

Feds waiting for the other retirement shoe to drop

Federal workers are buzzing over some proposed pension changes, says Senior Correspondent Mike Causey.

Mike Causey@mcauseyWFED

September 18, 2017 1:00 am

3 min read

Whenever a Washington-based pundit, politician or columnist says “everybody is talking about it” — whether “it” is North Korea’s nukes, NASA’s Cassini Saturn mission or good old Justin Bieber — what they mean by everybody is that some of the people around them are talking about “it,” whatever or whomever it is. But there is hardly ever a time or event that “everybody” is talking about all the time at the same time.

That said, lots of people working for or retired from the federal government are talking about some or all of the half-dozen plans incubating here in Washington that would — if they became law — mean lots of changes.

One, which would require FERS workers to pay a bigger chunk of their retirement, could cut their take-home pay by as much as 6 percent over a six-year phase-in period.
Another would eliminate the payment FERS retirees get each year if they retire before age 62, when they first become eligible for cost-of-living adjustments.
Another would reduce annual cost-of-living adjustments for CSRS retirees by 0.5 percent less than the official rate of inflation.
One would eliminate COLAs for FERS retirees, both current and future. Under that plan, feds would have the same retirement options that are available to many, if not most, non-federal workers: Their retirement income would be based on Social Security and their 401(k) plan contributions and earnings.
Back from the round-up-the-usual-suspects list is a proposal to base the annuities of future federal retirees on their time in government and their highest five-year average salary. Currently, annuities are based on service time and the employee’s high-three. The change would make little difference to workers who rarely get promotions and who are limited to small annual pay raises. But for hard-chargers who move quickly up the GS ladder, and in times of decent pay raises, the change could have a significant impact on their starting retirement benefits.

The Congressional Budget Office recently scored some of the proposals, listing both their impact on workers and retirees as well as their long-range “savings” to the government. To check that out, click here.

Whether everybody in government is talking about these proposals or not, a lot of people are interested. In Friday’s column, an angry retiree listed the reasons she thinks it pays not to retire. Ever. Some said she was right, and wished they had never retired. Others said she was overly bitter, and some of her statements were wrong. To check it out for yourself, click here.

Meantime, here’s a comment from an about-to-retire Agriculture Department employee on why he’s pulling the plug now:

“This week, I have had a steady stream of people through my office with various messages: ‘Can you postpone your retirement until December? Can you postpone your retirement until 2019? Can you postpone …?’

I suggested that if only USDA had gotten a better profile on phased retirement, I would be applying (or already have applied) right now. Maybe I need to write NARFE or Congress. That half-time retirement would allow me to push my Social Security out to age 70 [like benefits expert Tammy Flanagan suggests, if possible].

The 40-something IT guy and I were discussing the issue Wednesday evening. He said those who grew up with video games see these new websites and databases as intuitive; the ‘dinosaurs’ not so much. I grew up with Atari, Pong and Commodore 64, not so much help there.

Well, good column, but I am still going to give retirement a try. But after the parade through my office, maybe there will be some consulting to be found in retirement.”

—Jim S.