Maybe the end of the end of the world threat

Some federal workers, postal employees and retirees have been in a funk since Donald J. Trump surprised pollsters, talking heads and lots of Democrats (and Republicans too) by winning the electoral vote to become president.

Others — even fans and supporters of the president — have been stressed out since mid-May. That’s when the president’s budget came out. Instead of proposing one or two of the round-up-the-usual-suspects legislative proposals, he dropped five ticking timebombs. Any one of them would have wounded the Federal Employees Retirement System (FERS). All five of them, if they became law, could have wrecked it for both current and future retirees.

With Republicans controlling the White House, the House of Representatives and the Senate, it appeared that soon (January 2018, if not before) workers under the FERS program would be paying 6 percent more (increasing contributions 1 percent each year for the next six years) into their retirement program. The budget also called for:

• Basing future retirement benefits on the employee’s highest five-year salary instead of the high-three system used now. That would start retirees with a smaller pension benefit, which would reduce their lifetime annuity payments.
• End COLAs (cost-of-living adjustments) entirely for FERS retirees (current and future) . No more inflation catch ups. That would quickly erode the buying power of current and future retirees.
• Put current and future CSRS retirees under a diet-COLA plan that would reduce their January COLAs by 0.5 percent of the actual rise in inflation. Over time, that would dramatically reduce the purchasing power of retirees.
• Drop the so-called FERS Social Security supplement in 2018. Under this plan, people retiring after Dec. 31 who are 62 and under would not get the gap payment, which approximates the value of the Social Security benefit they don’t get until age 62. Thousands of feds — law enforcement officers, firefighters, air traffic controllers and others in high-stress jobs — would be hit because they are required to retire at age 57. Those people, plus others retiring before age 62 could lose thousands of dollars a year if the change was made.

Many feds were so fearful that some, most or all of the changes would be made that they put in their retirement papers so they would be off the payroll (and exempt, they hoped, from any of the changes) either before the start of the Oct. 1 fiscal year or the last day of this month, in case the changes were effective Jan. 1.

People familiar with the legislative process and history of bills aimed at helping — or hurting — feds warned against overreacting to proposals. Federal Managers Association’s Greg Stanford said all of the threats were and are serious. At the same time, he said that nobody should base their retirement date based on what Congress might do.

Longtime feds, who have been to this rodeo before, have learned to be wary and watchful, but not to panic. Still…

When it’s your job and your retirement on the line, the panic button is always gonna be there.

Nearly Useless Factoid

By Michael O’Connell

The city of Edinburgh, Scotland mandated the North British Distillery install an “odor control tower” in 2009 to cut back on the odors it produced.

Source: Wikipedia

Related Stories

Comments

Your Turn with Mike Causey

WEDNESDAYS at 10 A.M.

Learn about everything from pay, benefits and retirement, to buyouts, COLAs and pay freezes. Call the show live Wednesdays from 10-11 a.m. at 202-465-3080 with your questions. Dial 605-562-0264 to listen live from any phone. Follow Mike on Twitter and send him an email with your questions and comments. Subscribe on Apple Podcasts or Podcast One.

Sign up for breaking news alerts

THRIFT SAVINGS PLAN TICKER

May 07, 2021 Close Change YTD*
L Income 22.8920 0.0535 2.39%
L 2025 11.7696 0.0557 4.76%
L 2030 41.4554 0.2531 6.01%
L 2035 12.4413 0.0833 6.56%
L 2040 47.0488 0.3431 7.12%
L 2045 12.8823 0.1007 7.60%
L 2050 28.2076 0.2349 8.10%
L 2055 13.8383 0.1393 10.05%
L 2060 13.8382 0.1392 10.05%
L 2065 13.8381 0.1393 10.05%
G Fund 16.5792 0.0006 0.40%
F Fund 20.7154 -0.0008 -2.55%
C Fund 63.3169 0.4739 11.83%
S Fund 82.1564 1.0665 12.34%
I Fund 38.7555 0.4941 6.73%
Closing price updated at approx 6pm ET each business day. More at tsp.gov
* YTD data is updated on the last day of the month.