FERS: Saved by the bell … again

Is it déjà vu all over again? Sure seems like it.

This time one year ago lobbyists who represent feds and retirees were quietly hoping that Congress would tear off only a couple of chunks from the embattled Federal Employees Retirement System. The whack-the-bureaucrats politicians were willing, and seemingly more than able, to vote to trim billions of dollars from future FERS costs and benefits.

At the time it wasn’t so much a question of would they eliminate cost of living adjustments for retirees, end their FERS Social Security gap benefit, raise current workers retirement contributions or any of several other proposals that would cut take-home pay up to 6 percent while dooming FERS retirees to a single what-you-see-is-what-you get lifetime annuity benefit.

The question was which parts of FERS would take the hit. Then a funny thing happened on the way: Nothing. How come?

Along came the tax “reform” debate and other legislative issues that sidetracked the effort to get FERS. In the end, what happened is that nothing happened. FERS was left without a scratch. But that was then.

This year the White House outflanked congressional FERS-choppers, pushing multi-billion-dollar cuts in FERS but with the full support of the president. The outlook was grim even though Congress is operating at half speed because it is an unusual off-year election.

A record number of Republicans are leaving, retiring or not running for reelection. As a result, the normal off-year losses for the party in power could result in a Democratic takeover of the House, and maybe even the Senate.

Whether you favor or oppose reforms and the drama at the U.S.-Mexico border, immigration reform is to the rescue. Whether you fear an influx of illegal immigration or loath the image of children being separated from their parents, this is a big, big political deal.

It’s a legislative mine field that is likely to lead the nightly news and stoke an overnight Twitter war, by the president or any other celebrities. The FIFA World Cup will come and go, but immigration reform as an issue may be with us until the winter snows.

And as always in Washington, bad news and nightmares for one bloc produce major campaign touchstones for the other side, and maybe even a win or loss.

Many of the changes proposed in the White House’s reorganization plan have been described as radical by both friend and foe of the changes. The vast majority of the changes are vintage, proposed many times in the past and fizzled. The Department of Education is a favorite target, but each cabinet office, whether you love or loath their missions and how they carry them out, have backers in high places.

What surprises many people who have been through this before is that the White House would drop the R-bomb (reorganization) now in the midst of a political gridlock over immigration.

Barring something like a major terrorist attack or major military moves elsewhere, the immigration and reorganization plans aren’t likely to be resolved anytime soon. But they could act as a roadblock that will leave FERS untouched for another year.

Nearly Useless Factoid

By Amelia Brust

Caterpillars from the Lycaenids group of butterflies can trick ants into acting as their pseudo bodyguards. The caterpillars secrete a nectar-like substance which the ants eat, thereby who then create a barrier from predators. At night, the ants herd the caterpillars up trees to feed on leaves.

Sources: Indiana Public Media

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Feb 26, 2021 Close Change YTD*
L Income 22.3956 -0.0246 -0.10%
L 2025 11.2825 -0.033 -0.24%
L 2030 39.3109 -0.149 -0.32%
L 2035 11.7431 -0.0487 -0.35%
L 2040 44.2037 -0.2012 -0.37%
L 2045 12.0579 -0.0584 -0.39%
L 2050 26.2994 -0.1372 -0.41%
L 2055 12.7194 -0.0908 -0.44%
L 2060 12.7194 -0.0907 -0.44%
L 2065 12.7194 -0.0905 -0.44%
G Fund 16.5337 0.0015 0.07%
F Fund 20.7403 0.1701 -0.71%
C Fund 56.8721 -0.2653 -1.01%
S Fund 80.2962 0.2929 2.85%
I Fund 35.7955 -0.5623 -1.09%
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.