What would you give up to stay a teleworker?

Would you be willing accept a lower pay rate, and maybe a reduced FERS retirement benefit, if it meant you could work from home for the rest of your career? For some people, on both sides of the issue, it’s a no-brainer. Earlier this month we asked that question as many federal agencies ponder what to do as COVID-19 rules relax and more people are or will be returning to the office after months working from home.

A majority of feds who responded said they would willingly take a pay cut if they could continue to do their jobs, based in D.C., Boston, New York or Denver but in a community hundreds, if not thousands of miles away, where everything is less expensive. And a daily commute adding hundreds of extra hours to their work year wouldn’t be an issue. Thanks to locality pay, salaries for similar federal jobs vary greatly between major metro areas, like San Francisco-San Jose, Houston, D.C.-Baltimore and New York City — and pay rates in cities and towns across the country that are part of the RUS (rest-of-U.S.) locality area. Several workers noted the high-3 (not last 3) year feature in saying they would happily trade money in the form of salary for the option to work from the place of their choice.

A GS 11, step 5 earns $80,451 in the metro Chicago area. The salary for the same person at the same grade and step level in RUS is $75,543. To check out your home base salary vs. other cities, click here.

Since federal annuities are based on the employees highest average 3-year salary — usually, but not always, the last three years — pay is an issue for many when looking at retirement. But as several readers pointed out the odds of feds getting a big pay raise, if any at all, next year are slim considering 42 million people are out of work, many never to return, and dependent on treasury payments or unemployment — which is quickly becoming a political as well as future fiscal issue. So if feds get little or no raises for the next couple of years the high-3 is less of an issue going ahead.

A number of people responding to the what-would-you-trade column said they would happily give up traffic, high prices and sometimes attitudes in New York or D.C. if they could work in a more friendly, low-cost area with a minimal or non-existent commute. As T.K. put it:

“At this juncture of my career I would take the lower calculation for my final retirement figure. Since the annuity is based on the high three, theoretically if I were to move to a lower living locale my hi-three would be based on DC and not say Florida.

I’m eligible to retire now but am waiting to pay off a couple more bills, however, I would consider this scenario especially since my job is not a very high security.

This question for feds who have worked a long time, is this is as relevant as one thinks, unless they change the criteria to high three at the new locale and then I suspect less would be less inclined to go.”

Some got quite specific, like D.D. who wrote:

“I would be willing to take a pay cut if I could telework from Katy, Texas. I currently work in Washington, D.C., and an in the process of relocating my family to Katy,” he said. Money should go father there than in the DC area. Katy is a town of about 20,000 west of Houston which prides itself as the home of “ The Katy Heritage Society Railroad Museum has train-related exhibits in a restored depot, with an old caboose railroad car outside. The Katy Heritage Museum features vintage farming equipment and antiques. Leafy Mary Jo Peckham Park is dominated by a fish-filled lake. Katy Park holds baseball fields and spacious picnic areas.”

Nearly Useless Factoid

By Alazar Moges

On July 4, 1776, John Hancock and Charles Thomson were the only two men who signed the first copy of the Declaration of Independence. The other signatures came weeks later.

Source: Archives

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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.

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Jun 18, 2021 Close Change YTD*
L Income 22.8950 -0.0718 2.88%
L 2025 11.7475 -0.0782 5.61%
L 2030 41.3301 -0.3582 7.07%
L 2035 12.3983 -0.1179 7.71%
L 2040 46.8639 -0.4865 8.36%
L 2045 12.8274 -0.1425 8.91%
L 2050 28.0756 -0.3333 9.49%
L 2055 13.7453 -0.2025 11.70%
L 2060 13.7453 -0.2024 11.70%
L 2065 13.7452 -0.2024 11.69%
G Fund 16.6073 0.0007 0.53%
F Fund 20.8808 0.0657 -2.22%
C Fund 62.4507 -0.8275 12.61%
S Fund 82.8816 -1.0758 11.60%
I Fund 38.5980 -0.6987 10.58%
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.