Price hike for your retirement package?

Of all the budget threats aimed at the federal retirement package, which is the most likely to make it into law?

• Eliminate the FERS  (federal employee retirement system) annuity supplement.

• Base future annuities on the employee’s highest five-year average salary, instead of the current high-three formula.

• Reduce future COLAs ( (cost-of-living adjustments) for current and future CSRS  (Civil Service Retirement System) retirees by 0.5 percent below the actual rate of inflation, as measured by the Bureau of Labor Statistics.

• Eliminate future COLAs for the current and future FERS retirees.

• Force workers under the FERS retirement program to pay more for their benefits. Currently, FERS workers hired before 2013 contribute 0.8 percent of their salary into the civil service retirement fund. Those hired in 2013 contribute 3.1 percent and those hired in 2014 and since contribute 4.4 percent. Under the Trump  administration budget proposal, their contributions would go up 1 percent each year for the next six years. Prior House budget proposals had no such phase-in, and would have impacted CSRS employees as well.

As far as feds and retirees go, all of the proposals are horrible. And represent a breach of contract, at least in their minds.

If you chose the last horrible option as the most likely to succeed — as in become law — you may be on the right track.

Feds who follow Congress know that almost every year — with Democrats or Republican in control —the same-old proposals are made. And almost always (with the exception of the prospective contribution increases for FERS workers), nothing has happened. There have been years without a January pay raise. And there have been furloughs and shutdowns.

But the benefits package has remained largely intact, primarily because groups representing federal retirees, union members, federal managers and professionals have been very, very good in fighting legislative holding actions. Partly because changes to benefits are viewed as a breach of an implicit contract.

But this year could be different, as the House, Senate and White House are controlled by one party.

Some insiders say the key may be what is in the various budget reconciliation instructions to individual committees. If the committee that oversees federal pay and benefits, the House Oversight and Government Reform Committee, gets orders from the leadership to cut X amount from programs, the retirement package is the biggest, most juicy target, says NARFE’s Legislative Director Jessica Klement.

CSRS retirees contribute 7 percent of their salary. The FERS contribution, depending on when they were hired, varies from 0.8 to 4.4 percent. Raising contributions of current employees, either all at once or phased in each year, would “score” well in the budget process.

Luckily for feds, the budget process is so delayed and complicated that no hits have received public discussion… yet. But be assured, they’re being discussed behind closed doors.

The groups representing feds — federal and postal unions, NARFE, FMA, PMA and the SEA — have done an excellent decades-long game of successfully playing defense. What they need isn’t new skills or tactics. What they need are new dues-paying members that would, for many politicians, turn federal workers and retirees from faceless bureaucrats to tax-paying voters. Same people, big difference.

If you’re not a member of your respective group, I strongly encourage you to join. Low dues tend to reap big rewards.

Nearly Useless Factoid

By Jory Heckman

The Department of Veterans Affairs has approved the hammer of Thor (the Norse god of thunder and lightning) as a religious symbol for veteran gravestones. Two soldiers have headstones bearing the hammer.

Source: Co.Design

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