For the second time this year, federal workers are about to hit another big bucks pay-and-perqs jackpot. The delivery vehicle for all this good stuff is the Defense Authorization Act which Congress okayed last week. Once signed into law it will mean:
For the first time, ever workers under the Federal Employees Retirement System will be able to credit their unused sick leave time toward retirement. For details on what it mean, how it will work and the phase-in time, click here.
Nonpostal feds in Alaska and Hawaii will gradually lose the tax-free differentials they now get (worth up to 25 percent in some instances) in return for a series of phased-in locality pay raises. The tax-free differentials aren’t considered part of salary for retirement purposes. The phased in locality adjustments (similar to the 30 plus locality areas in the lower 48 states) will be part of that computation, boosting annuities dramatically.
Workers who left the government and were under the FERS retirement plan will be able to buy-back their previous service time when they rejoin Uncle Sam. For veterans of the Clinton administration who have returned to government, this will give them the option to buy back and be credited for previous federal service. That in turn will permit them to retire earlier, in some cases, and with much more generous annuities in every case.
Feds under the older Civil Service Retirement System will be able to transition into retirement by working part-time without hurting their retirement benefits. Currently their reduced salary (for part-time work) is figured into their high-3 pension calculation. The change would base their high-3 on their “deemed salary”, which would be the full time rate for their grade and pay step. For more on that, click here.
Give agencies greater leeway to hire high-skill federal retirees and permit them to keep both their full federal salary and their civil service annuity. Defense can do it now, but most other agencies must go through a cumbersome process to waive the so-called Dual Compensation Act. This would change all that.
We’ve been tracking the up-again-down-again progress of the benefits all year. At one point they were stripped from the so-called Tobacco bill. Many thought that was the end of the trail. But deals were made and the bottom line is that this is part two of a banner year for feds.
Previously, federal investors won a major benefit when Congress authorized the introduction (in 2011) of a tax-free Roth option into the federal Thrift Savings Plan. For an update, click here.
Groups representing federal workers, managers, executives and retirees are jubilant to have so many wins in a year like 2009 which has produced little good news on the job-front (pay, benefits, job security) for anybody outside of the federal government.
Thanks to health care advances, retirees are living longer, healthier lives and retirement choices are limited by the ability to pay for them. Certified financial planner Art Stein has some helpful advice specifically for FERS retirees. To read the story or hear the interview, click here.
FederalNewsRadio hosts complete Marine Corps Marathon Amy Morris and Tom Temin ran in this weekend’s Marine Corps Marathon. Check out what they had to say about the experience and see videos of Amy during and after the race!