Work more, get less plan

If any of the administration’s proposals to overhaul the federal pay and pension plans become law some workers could wind up spending more time on the job and less time fulfilling their retirement dreams.

If most of the proposals make it through Congress hundreds of thousands of current federal workers might have to extend their tours of duty by as much as a decade to maintain their standard of living.

The various “reforms” in the President’s Management Agenda could actually make it tougher to drain the federal swamp since there would be less incentives for the gators — that would be you — to leave their day jobs.

The PMA proposes there be no federal pay raise next January. It also adds a year to the time workers must serve in-grade in order to be eligible for the semi-automatic within-grade increases workers now get for every one, two or three years of service.

Those in steps one, two and three of their grade would get a WGI — worth roughly 3 percent — every two years instead of every year. Those in the next three steps would get raises every two years and those in the next three steps, which would take much longer to reach, would be eligible for the 3 percent step increase every three years.

Do the math.

Changing the eligibility time for the WGIs would slow each individuals salary buildup. That would be reflected with the employee retirees on an annuity based on his or her length-of-service, and average three-year highest salary.

That future annuity would further be reduced if Congress OKs the White House plan to base the future retirement benefit on the employees highest five-year salary. The high-five formula is common in private sector operations that still offer defined benefit pensions.

The agenda also calls for setting aside $1 billion for performance awards and incentive payments. Those are great, if you are among the chosen few who get them. But in most cases they do not count as part of base pay and would not figure in the high-3 or high-5 formula used to determine the starting annuity.

Bonuses, especially regular big ones, are nice but even modest pay raises are usually better in the long run.

The proposals to eliminate cost of living adjustments for Federal Employees Retirement System  retirees, and reduce them modestly for Civil Service Retirement System, could make people less eager to retire. And the plan to eliminate the FERS Social Security gap payment for people retiring before age 62 would be a disincentive for people to leave.

It would also be a financial crusher if applied to law enforcement officers, firefighters, air traffic controllers and others who are required by law to retire at age 57. All of the plans look good on paper and might win a prize in a public management class.

But in reality they could backfire big time, producing workplace situations that could be a nightmare for a White House anxious to trim government employment and give Uncle Sam what it believes is a badly need transfusion of new blood.

Nearly Useless Factoid

By Amelia Brust

Jeanne de Clisson, nicknamed the Lioness of Brittany, was a 14th-century French noblewoman who became a privateer after her third husband’s execution for treason during the Breton War of Succession. She gathered a band of men and attacked French forces, and with English and Breton support she acquired three ships painted black with red sails. The flagship was named My Revenge.

Source: Wikipedia

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Oct 18, 2021 Close Change YTD*
L Income 23.2464 0.006 3.52%
L 2025 12.0488 0.0048 6.40%
L 2030 42.6765 0.0216 7.92%
L 2035 12.8342 0.007 8.58%
L 2040 48.6333 0.0284 9.26%
L 2045 13.3390 0.0082 9.83%
L 2050 29.2577 0.0191 10.41%
L 2055 14.4366 0.0115 12.65%
L 2060 14.4365 0.0114 12.65%
L 2065 14.4364 0.0115 12.65%
G Fund 16.6847 0.0021 0.99%
F Fund 20.8592 -0.0048 -1.40%
C Fund 67.5316 0.2276 15.90%
S Fund 86.5236 0.3505 11.66%
I Fund 38.9905 -0.1662 8.56%
Closing price updated at approx 6pm ET each business day. More at
* YTD data is updated on the last day of the month.