2011: End of the Beginnning/Beginning of The End?

In 2009 federal and postal workers, and retirees, had their best year, ever, with Congress and the White House, but 2011 is shaping up to be Titanic collides wi...

If 2009 was the best-ever year federal and postal workers (and retirees) enjoyed from Congress and the White House how could 2011 be shaping up as one of the worst possible?

Great question Mike! Let’s go to the tape:

In 2009 Congress (with the backing of the Obama administration) enacted legislation that:

  • Permitted workers under the Federal Employees Retirement System (80 percent of the total workforce) to credit their unused sick leave toward retirement. That will have the effect of boosting annuities dramatically for many future FERS retirees.
  • Setup a system that will phase out tax-free pay differentials for nonpostal feds in Alaska, Hawaii and Puerto Rico and replace them with taxable locality raises that will be considered part of salary for figuring their high-3 retirement average.
  • Permit FERS employees who left government, then returned, to buy-back their previous service time for retirement purposes. This has benefited many Clinton-era appointees who left for 8 years, then returned with the Obama administration. But it also applies to career FERS employees who have moved in and out of government.
  • Setup a system (agency discretion) whereby workers under the older Civil Service Retirement System can transition out of government by going part-time without it having an impact on their final pension.
  • Gave agencies the authority (already possessed by Defense) to rehire annuitants for a limited period and permit them to get their full federal salary PLUS their federal retirement income.
  • Set the stage for introduction of a Roth option as part of the federal thrift savings plan.

Plus workers got a pay raise that went into effect in January, 2010.

By contrast white collar feds have already been hit by a 2-year pay freeze through (at least) January, 2013. The freeze was proposed by the president although he had earlier recommended a 1.4 percent pay increase. Times change…

The new Congress is looking at a variety of proposals (some endorsed by the Obama administration), which include limited or wide-spread hiring freezes…a reduction (of up to 10 percent) in the federal payroll…changing the retirement computation formula from the employees highest 3-year average salary to a high-5 system…increasing the retirement contribution workers make to their CSRS and FERS programs…raising the retirement age…privatizing (again) some IRS tax collection functions and also eliminating TSA personnel at airports and replacing them with contract workers.

All of the above has prompted lots of comment (and some genuine concern) from feds wondering what’s next? Typical is this from a long-time fed who says that despite my column minimizing the potential of a government “brain drain”, he’s ready to pull the plug. Like so…

Re: Pay Freeze and slowing of retirements

Government workers are like the folks that invest in stocks during a bull market. They get greedy and think they are going to make more money, and then when the market drops, they are sorry they stayed in so long. I planned to retire in spring 2011 after 34 years of service and I set my date as April 2, 2011. The pay freeze — in my mind — is just one of many signs that it’s time to move on. Reorgs, benefit changes, pay changes, less staff-more work, worsening traffic — I say enough is enough. Since my high-3 is not going to get any higher, and the possibility of a high-5 looms, I say take the money and run. I know I can find consulting work on the outside if I want it (I doubt I will). I see so many older folks walking the halls of (Commerce) – and looking older with each passing year, and I say, I want to enjoy my retirement while I still have my health and my vigor. You can’t put a price tag on being a healthy retiree and enjoying the fruits of your labor at the same time. This is a gift. If I wait and get a slightly higher annuity in, say 2-3 years after the freeze is lifted, or even a buy-out, and I am disabled due to illness, then my healthy years will have been wasted. No amount of money can turn back time or bring back years.

Mike from Commerce

To reach me: mcausey@federalnewsradio.com

Nearly Useless Factoid
by Suzanne Kubota

In honor of the now-upon-us NFL playoffs, Len Dawson of the Kansas City Chiefs holds the record for most fumbles in a single game. He had 7 fumbles in a game against the San Diego Chargers on Nov. 15, 1964


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