USDA

USDA Office Relocations Are Illegal, IG Says

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The Agriculture Department is in violation of spending laws by relocating employees out of the Washington, D.C., area, according to a new watchdog report.

USDA is in the process of moving the employees at two of its components—the Economic Research Service and the National Institutes of Food and Agriculture—to Kansas City. The USDA inspector general found those moves violate a 2018 appropriations law, which included language preventing the department from implementing any reorganization efforts without prior approval from appropriations committees in Congress. The law specifically prohibited spending money on any effort that “relocates an office or employees.”

The same language was included in a fiscal 2019 spending law and a House-passed Agriculture appropriations bill for fiscal 2020.

The auditors instructed USDA to “take appropriate action” for any violations of the Antideficiency Act, the law that prohibits federal agencies from spending funds that have not been appropriated. In October 2018, USDA entered into a $340,000 contract for reviewing potential destinations for the new headquarters locations.

The IG recommended USDA go back to Congress and to get approval for the moves before spending any additional money on them.

The department said it would not punish anyone for Antideficiency Act violations, citing a decision from its general counsel last month that USDA had complied with applicable parts of the law and the “committee approval” requirements “are unconstitutional and are without legal effect.” In the general counsel review, USDA said the Supreme Court, the Government Accountability Office and the Justice Department’s Office of Legal Counsel have all previously agreed with that assessment.

“The department’s actions comply fully with all applicable laws,” USDA General Counsel Stephen Vaden said in response to the report. “OIG’s suggestion otherwise ignores these precedents dating back nearly 40 years.”

The IG noted, however, that USDA itself has interpreted the appropriations language differently when it was included in previous spending bills.

“Such provisions have been included in relevant appropriations acts since 2015, and the department has previously taken the position that provisions…are binding upon the department,” the IG said.

The auditors instructed USDA to communicate the department’s new interpretation to its components to ensure consistency. The IG also said the department’s internal guidance requires certain steps before relocating employees, such as a cost-benefit analysis, but USDA said those provisions are waived if the relocation is initiated by the secretary.

While the IG accepted this reasoning, it said USDA would be better served by additional analysis.

“We believe that adopting the approach outlined within the regulation would be beneficial for all such proposed actions going forward because it is intended to provide a structured process to facilitate the implementation of organizational changes throughout the department,” the IG said.

Trump administration officials have generally said moving Agriculture Department offices to Kansas City would get federal employees closer to the constituents they serve and save taxpayer dollars. During a Republican party event in his home state of South Carolina on Friday, however, acting White House Chief of Staff Mick Mulvaney said the relocations would help the administration attain another goal: shedding federal employees.

More than half of ERS and NIFA employees have not accepted their relocation orders.

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Pay Raises Coming for 130K Postal Employees, Along With Higher Health Care Costs

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A union representing 131,000 employees has ratified its contract with the U.S. Postal Service, providing a 4.2% pay increase for the workers but shifting more of their health care costs onto them.

The National Rural Letter Carriers Association ratified the new three-year contract after reaching a tentative deal in May. The union called the contract “fair and reasonable,” while postal management stressed it would rein in labor costs and expand the use of part-time, non-career employees. The contract is retroactive to May 2018 and will expire in May 2021.

The rural letter carriers will receive a 1.3% pay raise retroactively and three additional increases over the life of the agreement. They will also receive cost-of-living adjustments on top of those wage increases. The Postal Service, however, will drop its contributions to employees’s health care from 73% of premiums to 72%. The contract will boost health benefits for non-career rural carriers as well.

The agreement will make it easier for the Postal Service to use non-career carriers for routes outside their normal post offices. The contract also will create a task force to address the hiring and retention of the non-career employees. The two sides agreed to develop a “joint workforce improvement process” to improve the relationship between management and rural carriers while creating a safer work environment.

“Overall, this contract results in continued restraint of rural carrier labor costs while giving the parties the opportunity to focus on implementing new engineered work standards for rural carrier employees,” said Doug Tulino, USPS labor relations vice president.

Ronnie Stutts, the NRLCA president, told his members the talks with President Trump’s postal task force, the 2018 midterm elections and the Postal Service’s ongoing efforts to “rightsize” its workforce delayed negotiations and led to the expiration of the previous contract.

Eighty-six percent of union members who returned their ballots voted to ratify the contract.

NRLCA’s urban counterpart, the National Association of Letter Carriers, also avoided arbitration by reaching a voluntary agreement for its 213,000 members with the Postal Service in 2017. The American Postal Workers Union meanwhile, which represents clerks, mechanics, drivers, custodians and others, remains at an impasse with the Postal Service. The two sides are heading to a third-party arbitrator after the Federal Mediation and Conciliation Service deemed them too far apart to help. USPS has sought to limit layoff protections and is offering a one-time lump-sum stipend rather than wage increases, the union said.

Early Retirement, Severance Options Unclear for Forest Service Workers Facing Layoffs

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Nearly a week after the Forest Service told 1,065 employees their jobs would be terminatedlater this year, federal workers are still waiting to learn what, if any, their options are for early retirement, severance pay or job placement elsewhere in government.

The employees at the agency’s Job Corps Civilian Conservation Centers learned during a conference call on May 24 that the Agriculture Department, the Forest Service’s parent organization, planned to transfer the centers to the Labor Department by the end of September.

While Labor runs the Jobs Corps program nationwide, the Forest Service has operated the Civilian Conservation Centers for decades under an interagency agreement with the department. Labor said it plans to close nine of the centers, which train young people for jobs in conservation and wildland firefighting, and contract out the work at the 15 remaining centers.

In the call with affected workers, Forest Service Chief Victoria Christiansen said the agency would seek reduction in force authority from the Office of Personnel Management so it can offer affected workers job placement assistance, severance pay or early retirement options. She reiterated that commitment in a memo to all employees Friday, when she wrote, “We will need to permanently transition the Forest Service Job Corps workforce and will seek reduction in force authority to do so.”

But in response to Christiansen’s comments reported previously, an OPM spokesperson contacted Government Executive to say, “OPM is not involved in, nor do we approve, agency RIF actions. Agencies are responsible for determining whether a RIF is necessary, and if so, carrying out a RIF in their agency.”

OPM’s website, however, states, “An agency must request [Voluntary Early Retirement Authority] and receive approval from the Office of Personnel Management before the agency may offer early retirement to its employees. It also notes:

“The Voluntary Separation Incentive Payment Authority, also known as buyout authority, allows agencies that are downsizing or restructuring to offer employees lump-sum payments up to $25,000 as an incentive to voluntarily separate. When authorized by the Office of Personnel Management (OPM), an agency may offer VSIP to employees who are in surplus positions or have skills that are no longer needed in the workforce who volunteer to separate by resignation, optional retirement, or by voluntary early retirement, if approved.”

So what does this mean for employees? Will they be offered early retirement or severance payments? It’s not clear at this time. The Forest Service public affairs office referred a reporter’s questions to the Agriculture Department, which in turn referred questions to Labor. Neither department responded to requests for information about early retirement, severance pay or job placement options for employees.

In a letter last week to Labor Secretary Alexander Acosta, Agriculture Secretary Sonny Perdue said USDA’s decision to end its role in the Job Corps program was part of a broader effort to streamline operations at the department: “As USDA looks to the future, it is imperative that the Forest Service focus on and prioritize our core natural resource mission to improve the condition and resilience of our nation’s forests, and step away from activities and programs that are not essential to that core mission.”

According to a Labor spokesperson, “At the vast majority of Forest Service Job Corps centers, student services will continue without interruption.” Labor will contract out the work in accordance with the Federal Acquisition Regulation, which means contract awards will likely be made next year.

The decision to close specific centers was “made carefully with an eye on past performance, efficiency, and student access,” the spokesperson said. “Deactivations do not represent a diminution of the program, but rather a long-term enhancement of it, as they will lead to a higher-performing, more efficient program.” At the centers slated to close, “new student enrollment will cease and existing students will have an opportunity to complete their education and skill instruction,” the spokesperson said.

The transition of the centers to Labor is expected to be completed by the end of the fiscal year on Sept. 30. On Thursday, Labor published a notice in theFederal Register requesting comment on its decision to close nine of the Civilian Conservation Centers. The comment period will be open for 30 days.

Transfer Was Long Planned

The Trump administration first announced its intention to transfer the Forest Service-run Job Corps centers in its 2019 budget proposal, released in February 2018. In the Labor Department funding section, it wrote:

“The Budget takes aggressive steps to improve Job Corps for the youth it serves by: closing centers that do a poor job educating and preparing students for jobs; focusing the program on the older youth for whom the program is more effective; improving center safety; and making other changes to sharpen program quality and efficiency. As part of this reform effort, the budget ends the Department of Agriculture’s (USDA) role in the program, unifying responsibility in DOL. Workforce development is not a core USDA role, and the 26 centers it operates are overrepresented in the lowest performing cohort of centers.”

But the union that represents Forest Service personnel vehemently disputes the assertion that the CCC’s are underperforming: “As shown by [Labor’s] own data, this is false,” the National Federal of Federal Employees wrote in a special report shortly after the administration released its 2019 budget proposal. Citing Labor Department data from 2017, the union noted that the Forest Service centers were actually underrepresented in the lowest-performing quartile—not overrepresented as claimed in the administration’s budget justification—and include the highest-performing centers in the country.

“In addition, a recent [Labor Department] analysis shows that [the Forest Service’s Civilian Conservation Centers] are substantially more cost effective than comparable centers run by private contractors,” the report found.

The union acknowledged that an analysis of Job Corps centers in 2014 showed the CCCs were substantially underperforming, but said the Forest Service took steps to turn the centers around and hold leaders accountable for performance.

“The results were striking,” the report found. One of the centers, Blackwell CCC in Laona, Wisconsin, was ranked 124th out of 125 total Job Corps centers in 2014, but by 2017 had risen to 19th. Another center, Oconaluftee CCC in Cherokee, North Carolina, went from 119th in 2014 to 21st in 2017. Both of those centers are now slated for closure.

USDA to Seek Reduction in Force for 1,100 Employees

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The Trump administration plans to eliminate jobs for nearly 1,100 Forest Service employees who manage the agency’s 24 Job Corps Civilian Conservation Centers, which train young people for jobs in conservation and wildland firefighting. The centers will be transferred from the Forest Service to the Labor Department, which plans to close nine of them and turn 15 over to contractors or other non-federal entities.

Forest Service officials, in a conference call with employees Friday morning, said they were notified of the plan only days ago. “This was a high-level policy decision,” Forest Service Chief Victoria Christiansen told employees on the call. Christiansen was clearly distressed to share what she called “very difficult news” and pledged to do all she could to support those affected.

As the call was underway, Agriculture Secretary Sonny Perdue, whose department includes the Forest Service, formally notified Labor Secretary Alexander of USDA’s intention to transfer the centers to Labor, which runs other federal Job Corps centers. The move is part of Perdue’s efforts to reorganize and streamline operations at the department.

The Forest Service has yet to work out many details for the move. It will begin by requesting reduction in force authority from the Office of Personnel Management as early as next week so the agency can offer affected workers job placement assistance, severance pay and early retirement options. But there are many other issues to work out as well, as was clear by the questions employees raised. Those include:

  • What’s going to happen to students currently enrolled in centers slated to close?
  • How will the cuts affect wildfire response?
  • How will management of centers on Forest Service land be shifted to the private sector?
  • What will happen to employees currently in the process of relocating between facilities, some of whom have sold homes and shipped household goods?
  • How will existing construction contracts be handled where work is ongoing at some facilities?
  • Will employees be able to apply for jobs with contractors expected to take over the facilities?

“We only found out about this four days ago,” Christiansen said. “All of the processes for this transition are not where we want them to be.”

Acting deputy chief for business operations Robert Velasco said he anticipated the process for transferring and closing the centers would take three to six months.

The centers slated to close are in Montana, Wisconsin, Arkansas, Virginia, Washington, North Carolina, Oregon and two in Kentucky.

Forest Service officials said they expected to brief members of Congress on the plans next week. “My guess is the requests for briefings will be accelerated,” Christiansen said.

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TSP Modernization Act Goes Into Effect September 15 2019

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We have had a lot of Federal Employees asking about the TSP Modernization Act of 2017 and when it would be come available for the employees.  For the longest time, we only knew that the TSP would be allowed to have up to two years to be ready, or so wanting to know when the changes implemented by the TSP Modernization Act would take effect. Until today, we only knew a general time frame: September 2019; however, the Thrift Savings Plan has now provided a specific date as to when you can expect the changes to go into effect.

According to a recent bulletin posted by the TSP, the changes under the new law will go into effect on September 15, 2019.

Change to Eliminate Financial Hardship In-Service Withdrawal Six-Month Suspension Rule

The bulletin contains information for federal agency payroll and HR staff about changes to the rules governing hardship withdrawals from the TSP while in service.

The bulletin notes that as of September 15, any TSP participant who received a financial hardship in-service withdrawal and is suspended from contributing to the TSP will be able to re-start TSP contributions even though the participant may not have completed the six-month suspension period.

Key Points to Note:

  • Any participant who received a financial hardship in-service withdrawal and is suspended from contributing to the TSP will be able to re-start TSP contributions effective September 15, 2019, even though the participant may not have completed the six-month suspension period.
  • Participants whose TSP contributions were suspended as a result of a financial hardship in-service withdrawal will receive a TSP notice alerting them that they can resume contributions as of September 15, 2019. Restarting TSP contributions is the participant’s responsibility.
  • Participants and agencies will still need to follow current procedures to resume contributions by having the participant access their employer pay system, or by completing Form TSP-1, Election Form.
  • Report 5501 (Financial Hardship In-Service Withdrawal Report) will be generated through September 13, 2019.
  • As of September 15, 2019, Report 5501 (Financial Hardship In-service Withdrawal Report) will be obsolete as any financial hardship in-service withdrawals taken on or after that day will not require a six-month suspension of contributions.

The TSP will publish a separate bulletin in the third quarter of 2019 with more details providing guidance for agency HR and payroll offices to implement these changes in conjunction with changes from the TSP Modernization Act of 2017.

For more information or immediate assistance, please reach out to us so we can help you plan for your retirement. Visit our Contact Us Page or call us Toll Free (877) 733-3877 x 1

OPM Chief to Propose Legislation for Merger With GSA By Week’s End

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Nearly a year after the Trump administration announced its proposal to send the bulk of the Office of Personnel Management’s functions to the General Services Administration, acting OPM Director Margaret Weichert said Tuesday that she will be submitting proposed legislation to Congress authorizing the merger “hopefully by Friday.”

Speaking with reporters, Weichert said that the legislation would transfer the legal authorities currently provided to OPM to an as-yet unnamed office within GSA, akin to its existing Federal Acquisition and Public Buildings services. Additionally, the bill would create a small policy-focused personnel office within the Executive Office of the President, modeled after the Office of Federal Procurement Policy.

“GSA has that structure, that framework, and is also a known expert in IT contracting and procurement, and that is a critical element in supporting the mission of OPM going forward,” she said. “We’re not structured to invest in world class operational excellence. The backlogs in terms of hiring, background checks and retirement processing, those are all endemic to our structure, and throwing money at the problem doesn’t fundamentally fix how we get after shared services support structures.”

A document outlining Weichert’s justification for the merger provided to Government Executive stated that the government’s HR agency lacks sufficient resources or technological capabilities to handle its duties alone. The administration cited the 2015 OPM data breach as an example of structural vulnerabilities within the agency.

“Despite the criticality of its mission, OPM is not currently structured or resourced sufficiently to maintain its mission in a sustainable, secure, and financially stable or sustainable way moving forward,” the document said. “In other words, the status quo is not viable. The disastrous large scale data breach experienced by OPM in 2015 is an illustration of what is at stake.”

The administration did not elaborate about the source of these woes, but said conditions will be worsened by Congress’ decision in the 2018 National Defense Authorization Act to send the agency’s background investigations functions to the Defense Department. President Trump finalized the transfer of the National Background Investigations Bureau through an executive order last month.

The background investigations bureau “accounts for more than 80% of OPM’s revolving fund resources,” the document said. “This decision [to transfer it to Defense] will dramatically undercut OPM’s ability to operate and maintain the systems that support the federal civilian workforce, greatly increasing the risk of another failure on a scale as large as or larger than the data breach.”

Although background investigations currently account for a significant amount of OPM’s workload, it is unclear that the move of those operations to the Pentagon will affect the rest of the agency’s duties. For nearly two decades, OPM farmed out the bulk of its security clearance work to contractor U.S. Investigative Services, until a data breach at that company led to the agency terminating the contract in 2014. And OPM did not officially create the National Background Investigations Bureau until 2016.

Weichert said she “can’t speak to that circumstance,” but said that the departure of NBIB revenues will create a $70 million budget shortfall for OPM, and a greater “tech debt” that would impede IT modernization.

In a statement Tuesday, American Federation of Government Employees National President J. David Cox accused the Trump administration of engineering some of the problems that it now cites as justification for dismantling OPM.

“By divesting OPM of its responsibility to conduct background investigations on federal employees and contractors, the Trump administration has created the crisis it is now using to justify abolishing OPM,” Cox said. “[This] administration is clearly following a ‘ready, shoot, aim’ strategy built on misleading everyone about its motivations. Congress must prevent this reckless move in order to protect OPM from this irresponsible plan.”

In its document, the administration argued that aligning OPM and GSA would develop “synergies around people, facilities and contracts,” producing efficiencies that could result in savings of between $11 million and $37 million annually, although it provided no details about how those figures were calculated.

The document argued that GSA could help guide OPM in its effort to modernize its aging IT infrastructure, which the administration said in some cases relies on systems dating back to the early 1980s.

“GSA’s position as a trusted leader and valued partner in helping improve agencies’ use of information technology is bolstered by its B+ grade on the latest [Federal IT Acquisition Reform Act] scorecard, the highest in the federal government,” the administration wrote. “Additionally, GSA has spent the past decade focused on qualitatively and quantitatively improving its own shared CXO functions, so it is well positioned to support OPM.”

FERS Supplement Questions and Answers

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The Federal Employees Retirement System annuity supplement is important for those covered under FERS who plan to retire before turning 62. The supplement bridges the time between the onset of retirement and the age you qualify for Social Security retirement—which is generally 62. This benefit provides a source of income that mimics the age 62 Social Security benefit, but is computed using only civilian federal service creditable to the FERS retirement benefit.

About half of all FERS employees are entitled to this benefit when they retire. The supplement ends when a recipient turns 62. After reaching the minimum retirement age until the supplement ends at 62, an earnings test is applied by the Office of Personnel Management that can cause a reduction or elimination of the supplement.

Since the FERS supplement can get complicated, let’s look at some key questions and answers about it.

Who is eligible to receive the supplement?

To receive the supplement, you must be eligible for an immediate, unreduced FERS retirement benefit. Some employees are immediately eligible for the FERS supplement when they retire. This includes those who retire with entitlement to an immediate annuity, such as employees who have reached their minimum retirement age with at least 30 years of creditable service or those at age 60 with at least 20 years.

The FERS supplement is especially significant to those who must retire early under special provisions that apply to certain groups of employees, including law enforcement officers, firefighters, air traffic controllers, National Guard technicians, Customs and Border Protection officers, nuclear materials couriers and special agents of the Diplomatic Security Service. It is generally payable at retirement for these special coverage employees when they retire as early as age 50 with 20 years of covered service. It’s sometimes available even earlier for employees eligible to retire when they complete 25 years of covered service. The mandatory retirement age for most of these employees is 57 (56 for air traffic controllers).

For employees who retire under discontinued service (involuntary) retirement provisions or under early retirement provisions (that is, a major reduction in force, reorganization, or transfer of function), the supplement is payable when they reach their MRA if they retire at a younger age.

Who is not eligible?

If you’re already 62 when you retire, you will be eligible for Social Security retirement rather than the FERS supplement. Employees who resign without being old enough or having enough service to qualify for an immediate retirement are not eligible for the supplement even though they may receive a deferred retirement at a later date.

Employees retiring at their MRA with at least 10 years but less than 30 years of service (known as “MRA+10” retirement) and those retiring at age 60 or 61 with more than 10 but less than 20 years, are not eligible for the supplement even though they may choose to postpone their retirement application. Disability retirees are also not eligible.

Who pays it?

There is no special application to receive the FERS supplement. If you are entitled to receive this benefit, it is included with the FERS basic retirement benefit, which is administered by OPM.

What is the earnings test and how is it applied?

Continued receipt of the annuity supplement is subject to an earnings test every year and can be affected by wages earned by the retiree. OPM conducts annual surveys of more than 77,000 supplement recipients to assess their earnings. These surveys are sent in April and must be returned by the beginning of June.

Let’s suppose Lori, a federal law enforcement officer, plans to retire at 52 on Dec. 31, 2019, with 20 years of service. Her birthdate is Nov. 15, 1967 and her minimum retirement age is 56 years and six months. She won’t be subject to the annual earnings test until she has reached that age.

Now, let’s fast-forward and see what happens when Lori turns 56 and six months. Assume she has been receiving a FERS supplement of $1,000 per month, or $12,000 annually.

She will reach her minimum retirement age on May 15, 2024. Lori will not be subject to the earnings test until 2024 because she didn’t reach her MRA by the end of 2023. Lori will continue to receive her full supplement during 2024. The annual earnings survey will be sent to her early in 2025.

Let’s assume Lori earns $36,000 per year. On the earnings survey, she will report all earnings from 2024 received after reaching her MRA. That adds up to a little less than $21,000 (seven months of wages). The reduction to her supplement is computed at $1 for every $2 in earned income over the limit. The earnings limit amount for 2019 is $17,640 per year. If Josie earned $3,360 over the 2024 earnings limit, then her supplement would be reduced by dividing the amount over $3,360 in half, arriving at an annual reduction of $1,680. After the reduction is applied ($12,000 – $1,680), the new supplement rate becomes $10,320 annually, or $860 per month.

So, effective in July 2025, Lori will see her supplement reduced from $1,000 per month—which she had been receiving since retirement—to $860 a month.

Now suppose Lori decides to fully retire in 2026. Once she can provide proof of her earnings level going below the annual limit, she can file to restore the supplement. This proof is generally a tax return—in this case, her 2027 return, which would be the first to show the reduced income. After a long process of submitting new, lower wage reports to OPM and gaining approval to restore the supplement, it will be reinstated. The supplement ends at 62 for all FERS participants.

Should I let OPM know when my income changes?

Dan Jamison, a certified public accountant and retired FBI agent who has a lot of experience helping law enforcement personnel understand their retirement benefits, says it’s not a good idea to contact OPM and report job changes or earnings. Instead, he says, it’s better to wait to receive the earnings survey in the mail. Contact OPM immediately if you don’t receive an earnings survey by mid-May if you have reached your minimum retirement age by Dec. 31 and still haven’t turned 62.

Will the supplement be eliminated by Congress?

Policymakers have proposed eliminating the FERS supplement many times over the years—including this year. OPM has reported that such a move would save the government $18.7 billion over 10 years.

So far, the supplement is still available to eligible federal retirees. The FERS supplement is one of the benefits included when FERS was implemented that allows federal employees to plan for retirement with similar age and service requirements as employees who retire under the older Civil Service Retirement System.

So now with that being said, who would like to receive a Free Federal Retirement Review and take advantage of this provision before it goes away.  You can Schedule your Free Retirement Review here or give us a call at (877) 733-3877 x 1

The FERS Supplement Questions and Answers

By | Benefits, Federal Pay, Retirement | No Comments

The Federal Employees Retirement System annuity supplement is important for those covered under FERS who plan to retire before turning 62. The supplement bridges the time between the onset of retirement and the age you qualify for Social Security retirement—which is generally 62. This benefit provides a source of income that mimics the age 62 Social Security benefit, but is computed using only civilian federal service creditable to the FERS retirement benefit.

About half of all FERS employees are entitled to this benefit when they retire. The supplement ends when a recipient turns 62. After reaching the minimum retirement age until the supplement ends at 62, an earnings test is applied by the Office of Personnel Management that can cause a reduction or elimination of the supplement.

Since the FERS supplement can get complicated, let’s look at some key questions and answers about it.

Who is eligible to receive the supplement?

To receive the supplement, you must be eligible for an immediate, unreduced FERS retirement benefit. Some employees are immediately eligible for the FERS supplement when they retire. This includes those who retire with entitlement to an immediate annuity, such as employees who have reached their minimum retirement age with at least 30 years of creditable service or those at age 60 with at least 20 years.

The FERS supplement is especially significant to those who must retire early under special provisions that apply to certain groups of employees, including law enforcement officers, firefighters, air traffic controllers, National Guard technicians, Customs and Border Protection officers, nuclear materials couriers and special agents of the Diplomatic Security Service. It is generally payable at retirement for these special coverage employees when they retire as early as age 50 with 20 years of covered service. It’s sometimes available even earlier for employees eligible to retire when they complete 25 years of covered service. The mandatory retirement age for most of these employees is 57 (56 for air traffic controllers).

For employees who retire under discontinued service (involuntary) retirement provisions or under early retirement provisions (that is, a major reduction in force, reorganization, or transfer of function), the supplement is payable when they reach their MRA if they retire at a younger age.

Who is not eligible?

If you’re already 62 when you retire, you will be eligible for Social Security retirement rather than the FERS supplement. Employees who resign without being old enough or having enough service to qualify for an immediate retirement are not eligible for the supplement even though they may receive a deferred retirement at a later date.

Employees retiring at their MRA with at least 10 years but less than 30 years of service (known as “MRA+10” retirement) and those retiring at age 60 or 61 with more than 10 but less than 20 years, are not eligible for the supplement even though they may choose to postpone their retirement application. Disability retirees are also not eligible.

Who pays it?

There is no special application to receive the FERS supplement. If you are entitled to receive this benefit, it is included with the FERS basic retirement benefit, which is administered by OPM.

What is the earnings test and how is it applied?

Continued receipt of the annuity supplement is subject to an earnings test every year and can be affected by wages earned by the retiree. OPM conducts annual surveys of more than 77,000 supplement recipients to assess their earnings. These surveys are sent in April and must be returned by the beginning of June.

Let’s suppose Lori, a federal law enforcement officer, plans to retire at 52 on Dec. 31, 2019, with 20 years of service. Her birthdate is Nov. 15, 1967 and her minimum retirement age is 56 years and six months. She won’t be subject to the annual earnings test until she has reached that age.

Now, let’s fast-forward and see what happens when Lori turns 56 and six months. Assume she has been receiving a FERS supplement of $1,000 per month, or $12,000 annually.

She will reach her minimum retirement age on May 15, 2024. Josie will not be subject to the earnings test until 2024 because she didn’t reach her MRA by the end of 2023. Josie will continue to receive her full supplement during 2024. The annual earnings survey will be sent to her early in 2025.

Let’s assume Lori earns $36,000 per year. On the earnings survey, she will report all earnings from 2024 received after reaching her MRA. That adds up to a little less than $21,000 (seven months of wages). The reduction to her supplement is computed at $1 for every $2 in earned income over the limit. The earnings limit amount for 2019 is $17,640 per year. If Lori earned $3,360 over the 2024 earnings limit, then her supplement would be reduced by dividing the amount over $3,360 in half, arriving at an annual reduction of $1,680. After the reduction is applied ($12,000 – $1,680), the new supplement rate becomes $10,320 annually, or $860 per month.

So, effective in July 2025, Lori will see her supplement reduced from $1,000 per month—which she had been receiving since retirement—to $860 a month.

Now suppose Lori decides to fully retire in 2026. Once she can provide proof of her earnings level going below the annual limit, she can file to restore the supplement. This proof is generally a tax return—in this case, her 2027 return, which would be the first to show the reduced income. After a long process of submitting new, lower wage reports to OPM and gaining approval to restore the supplement, it will be reinstated. The supplement ends at 62 for all FERS participants.

Should I let OPM know when my income changes?

Dan Jamison, a certified public accountant and retired FBI agent who has a lot of experience helping law enforcement personnel understand their retirement benefits, says it’s not a good idea to contact OPM and report job changes or earnings. Instead, he says, it’s better to wait to receive the earnings survey in the mail. Contact OPM immediately if you don’t receive an earnings survey by mid-May if you have reached your minimum retirement age by Dec. 31 and still haven’t turned 62.

Will the supplement be eliminated by Congress?

Policymakers have proposed eliminating the FERS supplement many times over the years—including this year. OPM has reported that such a move would save the government $18.7 billion over 10 years.

So far, the supplement is still available to eligible federal retirees. The FERS supplement is one of the benefits included when FERS was implemented that allows federal employees to plan for retirement with similar age and service requirements as employees who retire under the older Civil Service Retirement System.

So now, would anyone be interested in a Free Retirement Review to take advantage of this provision before it goes away? Please visit our Contact Us Page to schedule your review today or call us at (877) 733-3877 x 1

Lawmakers Push to Allow Pension Contributions for Former Temporary Feds

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Lawmakers from both parties introduced a bill Thursday that would allow all federal employees to make catch-up contributions to their retirement accounts to make up for time they spent in temporary positions.

The Federal Retirement Fairness Act (H.R. 2478), introduced by Reps. Derek Kilmer, D-Wash., and Tom Cole, R-Okla., would allow federal employees who have spent time in temporary and seasonal positions or an intermittent work status to contribute 1.3 percent of their base pay, plus interest, to the Federal Employees Retirement System. Doing so would grant the workers credit toward their defined benefit pension for their time as temporary employees.

Kilmer and Cole first introduced the bill last year, after they were alerted to the fact that federal employees at naval yards and air bases needed to work past retirement age to become eligible for full pension benefits. That bill did not receive a vote in the House.

“Many federal employees begin their careers in temporary positions before transitioning to permanent status,” Kilmer said in a statement Thursday. “This bill will ensure that all federal workers, from the Puget Sound Naval Shipyard and beyond, have the opportunity to retire at the same time, regardless of how they started their careers.”

The Office of Personnel Management used to allow former temporary employees to make catch-up contributions, although the practice was discontinued in 1989 after the establishment of FERS.

The bill has broad support from federal employee and management organizations, including the American Federation of Government Employees, the National Federation of Federal Employees and the Federal Managers Association.

“[This legislation] provides long overdue pension parity to those federal workers who failed to receive possible pension credit for their federal service,” said Matt Biggs, secretary-treasurer of the International Federation of Professional and Technical Engineers. “This bill recognizes that regardless of an employee’s status as temporary or permanent, workers should not be unjustly penalized.”

The bill’s introduction comes as the Trump administration is pushing for a new retirement system for term employees—workers hired on set contracts between one and four years—that would only offer access to the Thrift Savings Plan, albeit with a more generous employer contribution.

It is unclear how this bill might interact with that proposal, if implemented. A spokesperson for Kilmer did not immediately respond to a request for comment.

If Anyone is needing a free retirement Consultation, please visit our Contact Us Page.

 

 

Most Feds Will Get Retroactive Raise This Pay Period

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The federal government’s largest payroll processor announced Tuesday that most civilian federal employees will see the average 1.9 percent pay raise, authorized by Congress in February, in their paychecks next week.

The National Finance Center, which is housed within the Agriculture Department but does payroll for dozens of federal agencies, said that it has implemented the pay increase, which includes a 1.4 percent across-the-board raise and an average of 0.5 percent increase in locality pay, for the current pay period that began on April 7.

Although President Trump signed a bill in February authorizing the pay raise retroactive to the first pay period of 2019, there was a significant delay in implementation. Trump did not issue an executive order overriding Trump’s decision last December to institute a pay freeze for civilian federal workers until March 28, six weeks after the raise became law.

The National Finance Center said Tuesday that “most” employees will see both the pay raise reflected in their pay checks next week, as well as a lump sum payment accounting for the raise’s retroactivity to the beginning of the year.

However, some hurdles still remain for some workers.

“Other employees will receive their salary increase for [the current pay period], without the retroactive funds included, as authorized by their agency,” NFC wrote in an email to customers. “The pay raise may not be received immediately if there are any intervening personnel actions processed [since January], such as but not limited to within grade increases, promotions, etc. This scenario requires corrective personnel actions [by agency human resources offices].”

Pension Annuities, Withdrawals and More Questions Answered

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This week, we’re back with a few more questions and comments from readers, covering everything from Civil Service Retirement System and Federal Employees Retirement System coverage to TSP withdrawals.

I was CSRS back in 1977 thru 1982. I received a refund of the retirement funds. I went back into the service in 1983, did my remaining years and retired. In 2000, I returned to civil service and I am now FERS. I am paying back the five years for CSRS. How will they calculate the five years? 

First of all, if you had at least five years of prior CSRS coverage (whether or not you took a refund of retirement contributions), you should have been rehired under CSRS Offset retirement coverage and given a six-month opportunity to choose FERS coverage. If this is not what happened, you should contact your human resources office to find out if you were misclassified under FERS. If so, there’s a remedy under the Federal Erroneous Retirement Coverage Corrections Act, which allows you to go back to CSRS Offset coverage instead of FERS if you choose to.

If you remain under FERS and have more than five years of coverage under CSRS, then you will have a “CSRS component” to your retirement computation. That portion of your benefit will be computed under CSRS rules.

Keep in mind that since you received your refund of contributions prior to March 1, 1991, you can receive credit for this service without paying the redeposit. Your annuity will be subject to a permanent actuarial reduction based on the amount of the redeposit, interest due and your age at retirement. The actuarial reduction will not be applied to an annuity due your surviving spouse. You can avoid the reduction by repaying the refund.

I will have 24 years total at retirement at age 63. I have Federal Employees Group Life Insurance Coverage [at a level of] my salary times one. Lately, everyone is saying to keep it and eventually the government will pay for it. That’s a new one on me.

You can continue basic FEGLI into retirement as long as you were covered for the five years immediately preceding your retirement. The premium is $.325 per $1,000 of coverage per month until you’re 65 and retired. Then, if you elect the 75 percent reduction option at retirement, the premium ends and the coverage begins to reduce by 2 percent per month until you’re left with 25 percent of your original coverage at no further premium. You can also choose no reduction or a 50 percent reduction if you’re willing to pay an additional premium. And you can continue optional FEGLI into retirement if you have been covered for five years and retire on an immediate retirement.

Annuities begin on the first [of the month]. But if you retire on the fourth of any month, you will not start the annuity until the next month, and actually receive it the following month, so you will be out about seven weeks with no pay. 

The start date of your retirement is the first day of the month after your last day on the job. (You’re paid your salary through close of business of the date you indicate for your separation on your retirement application.) There’s an exception for employees who retire under CSRS or CSRS Offset that allows retirement to start on the day after the retirement date if the date of final separation is the first, second or third day of the month. Regardless of whether you are retiring under CSRS or FERS, if you select June 15 as your retirement date, for example, this is the day your salary will stop accruing. Your first retirement benefit will be for the month of July, payable on Aug. 1. So you’ll get no compensation for June 16-30. This is why most employees try to retire on the last day of the month—or the first three days of the month in some cases under CSRS or CSRS Offset.

On the TSP issue of required minimum distributions, folks should notify the TSP to send your RMD distribution in mid-December so you can maximize those funds. If your RMD is 4 percent, and those funds gained 4 percent during the year, your TSP would not run out, because it would replenish itself. The RMD is based on the balance of TSP on Dec. 31 of the prior year, so you get another year of earnings on that RMD.

Here is an example of one of the loyal readers of this column who consistently provide supplemental information and insight that’s very helpful. I’d add this note: According to the TSP, if you’re already receiving a series of monthly payments from your account when you turn 70½, your monthly payments will be used to satisfy the IRS minimum distributions requirement. If the total amount of your monthly payments does not satisfy the requirement, the TSP will issue a supplemental payment for the remaining amount in December. This is automatic if your monthly payments are not high enough to satisfy your annual RMD. Your monthly payments can be as low as $25.

I don’t understand why the federal government can’t come up with an annual statement, like the Thrift Savings Plan gives you an estimate. Why can’t you just go to the Office of Personnel Management website and get the info? I would think that would keep your information up-to-date and it wouldn’t take so long to finally get your first retirement check.

The problem is that OPM doesn’t have access to your current information, since your personnel and payroll data is not transferred from your agency to OPM until you have separated for retirement. In many cases, agency payroll offices do provide an annual benefits statement so you can get a snapshot of your retirement and insurance benefits. For example, some USDA federal employees who have their payroll processed through the USDA National Finance Center will receive an annual benefits statement. It describes the estimated value of your retirement benefit, your TSP account value, and when you’ll be eligible for Social Security and Medicare benefits.

Now for others or anyone who wants to receive their annuity estimate in a free Federal Retirement Review and go over all of your benefits can request one from one of our Chartered Federal Employee Benefits Consultants. So Request and Schedule your review today!

Treasury Suspends G Fund Investments, Retirement Backlog Grows

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Treasury Secretary Steve Mnuchin informed Congress this week that his department would cease its investment in two federal retirement programs as part of its extraordinary measures intended to delay running into the debt ceiling.

On Saturday, the federal government hit its borrowing limit, and last week Mnuchin informed Congress that he would be suspending the department’s issuance of State and Local Government Series securities. Mnuchin followed up Monday, sending Congress a letter informing lawmakers that he would suspend investments in the Civil Service Retirement and Disability Fund, as well as the Postal Service Retiree Health Benefits Fund.

And on Tuesday, the Treasury secretary informed House Speaker Nancy Pelosi that he would suspend investment in the Thrift Savings Plan’s G Fund, which is made up of government securities, to avoid breaching the debt ceiling. With these actions, and an influx in revenues when federal income taxes are due in April, officials believe the Treasury Department can continue to fund government operations “for several months” before Congress will need to act to raise the debt limit again. Lawmakers hope to do so when they pass appropriations bills to set spending for the 2020 fiscal year this fall.

Federal employees should not worry too much about their retirement savings, though. Mnuchin told Congress that once the debt limit is raised, his department will make these investment funds whole once again.

Elsewhere on Capitol Hill, some lawmakers plan to introduce legislation to make the federal government’s defined benefit retirement programs more generous.

Rep. John Garamundi, D-Calif., sent a “Dear Colleague” letter to lawmakers asking them to cosponsor the CPI-E Act, a bill that would base Civil Service Retirement System and Federal Employees Retirement System cost of living adjustments on the Consumer Price Index for the Elderly, rather than the currently used CPI for Urban Wage Earners and Clerical Workers.

“The CPI-E is the most accurate and balanced measure of the real costs that seniors face in retirement,” Garamundi wrote. “Current measures do not adequately take into account the rising expenditures of retirement, such as housing and health care costs. This inadequate accounting amounts to an effective decrease in benefits for those who rely on these federal programs.”

When introduced, the bill will have dozens of cosponsors, including members of both parties. Garamundi introduced similar legislation in 2017, although it never emerged from committee.

The Office of Personnel Management reported Tuesday that the volume of federal employees retiring in January and February, when the agency experiences an annual surge, was down compared to 2018.

In January, 13,264 employees filed for retirement, and last month 10,792 employees applied. That’s down from last year, when 14,590 employees requested their retirement benefits in January, followed by 13,290 in February.

The 35-day partial government shutdown could account for some of the drop in retirement requests, as unfunded agencies furloughed HR employees, making it impossible for some to retire if they had not announced their intent before the lapse in appropriations began last December.

Over the two-month period, OPM processed 18,705 retirement claims, in line with the same period in 2018. Although the retirement backlog spiked from 18,019 claims in December 2018 to 23,121 in January, OPM was able to maintain that figure last month, as it only increased slightly to 23,370.

If your within six Months of your retirement date and would like a Free Federal Retirement Review please visit our Contact Us page and request and schedule your review today.

Thousands of Feds Still Await Back Pay After Shutdown

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Despite efforts to ensure that federal workers impacted by the 35-day partial government shutdown received back pay as quickly as possible, an official at the government’s largest payroll processor confirmed Thursday that “thousands” of employees at the Homeland Security Department are still waiting for their first paycheck of the year.

And employees at other agencies say they still are missing a significant chunk of what they were owed and it is unclear when they will be made whole.

An official at the National Finance Center, which is housed within the Agriculture Department and provides payroll services to more than 130 agencies across the federal government, confirmed Thursday that processing back pay has been “a big issue throughout all of DHS.” Due to an error related to “adjustments of pay,” HR employees have been working overtime since the government reopened to fix each employee’s pay manually.

“This was departmentwide for DHS, and there are thousands of individual, manual payments they’ve had to do,” the official said. “It’s crazy over there.”

The National Finance Center official said all Homeland Security employees still awaiting back pay should see their back pay sometime between today and Feb. 12 as essentially “three pay checks in a single deposit.”

Acting Office of Personnel Management Director Margaret Weichert touted the administration’s efforts to secure back pay in a tweet last week, suggesting that employees were “getting paid in record time” and that most employees “will be paid by [Jan. 31].” A senior administration official told Government Executive that although the vast majority of the 800,000 employees either furloughed or working without pay during the shutdown have received all of their back pay, officials were committed to ensuring remaining workers are made whole as swiftly as possible.

“The administration took unprecedented steps to ensure federal employees impacted by the shutdown received back pay within a week and before the end of the month,” the official said. “The challenges of executing a mid-cycle paycheck in record time led to a modest number of exceptions, but the vast majority of affected employees welcomed their back pay on or before January 31, rather than waiting until their next scheduled pay day of February 8.”

Officials with the American Federation of Government Employees said there also have been a number of issues surrounding back pay payments from the Interior Business Center, a payroll processor within the Interior Department that services a variety of federal agencies. In addition to incomplete payments, those paychecks have not been reflected in agency HR portals, and a number of important payroll deductions were not taken out of the payments.

A National Finance Center official confirmed that it also did not take out deductions like court-ordered payments or union dues.

“On the back pay issue, we’ve got people here [at the National Science Foundation] who are still missing between 25 and 33 percent of our pay,” said David Verardo, president of AFGE Local 3403, which represents around 1,000 NSF employees. “This is from the Interior Business Center—that’s who handles our payroll—and a whole lot of deductions weren’t taken out, including child support, alimony and, of course, union dues. The agency has told us that we have to just deal directly with those creditors. I don’t know how that works, but it seems like it involves law enforcement and the courts, so we’re bracing for some difficult times.”

The issue appears to be widespread. Officials at the Federal Railroad Administration also reported that they haven’t received all of their back pay yet, and employees at the National Archives and Records Administration also experienced issues where various deductions, from child support and alimony payments to Thrift Savings Plan loan repayments and union dues, were not taken out of their paychecks.

A post on the Interior Business Center’s website confirms that it only took “required deductions” out of back pay payments, such as taxes, insurance premiums and federal retirement program contributions.

“For other deductions, it depends on the type of deduction as to how retroactive payments will be made,” the payroll processor wrote. “In general, voluntary allotments such as Combined Federal Campaign and allotments to financial institutions will not be deducted from back pay. Another example is court-ordered payments, which may have required employees to continue to make payments via personal checks while in non-pay status.”

In a statement, the Interior Business Center said it is aware of issues surrounding missing payroll deductions, and will provide additional information to agencies “as it becomes available.” Additionally, a spokesperson said all outstanding back pay should reach employees in their next pay check, which is due to go out by Feb. 12.

“The overwhelming majority of employees received their pay on or by Jan. 31, 2019,” a spokesperson said. “The small group of employees affected (those who have not received their back pay in full) due to issues such as personnel status or data entry will receive a full interim payment in the upcoming pay cycle.”

TSP Proposes New Shutdown Loan Rules, OPM Considers Health Care Portal, and More

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Officials with the agency that administers the federal government’s 401(k)-style retirement savings program published an interim rule Tuesday that would ensure federal employees impacted by a government shutdown can take out loans on their Thrift Savings Plan accounts regardless of how long the lapse in appropriations is expected to last.

Posted in the Federal Register by the Federal Retirement Thrift Investment Board, which governs the TSP, the rule narrowly applies to federal workers who are either furloughed or forced to work without pay during a lapse in appropriations. Before this week, any employee in a “non-pay status” was eligible to take out a loan, so long as that status was expected to last less than 30 days.

As a result, there was uncertainty regarding whether employees at unfunded agencies could apply for TSP loans during the 35-day partial government shutdown, especially as it stretched into the third and fourth week. Earlier this month, TSP officials reported that they saw a 5 percent increase in the issuance of TSP loans during the lapse in appropriations, compared to a 26 percent increase in withdrawals, a more onerous process that forces participants to incur a 10 percent tax penalty and stop contributing to their accounts for six months.

In the rule filing, officials said they took great pains in order to come up with a way to implement the rule immediately.

“This interim rule applies only to participants who are furloughed or excepted from furlough (i.e., continuing to work and earn pay, but their pay is delayed until appropriations are authorized) due to a government shutdown,” the rule stated. “The FRTIB’s staff and contractors have designed manual workarounds to highly automated business processes in order to make this interim rule effective immediately so these participants will have access [to] TSP loans in the event of another government shutdown.”

Additionally, the rule allows TSP participants to request a suspension of their loan payments in the event of a shutdown to avoid the potential that they could default. And the agency is reexamining how it handles TSP loan applications from federal employees in other forms of non-pay status.

“Participants who are not receiving pay for other reasons (e.g., administrative furlough, voluntary leave of absence, seasonal work, sabbatical, disciplinary suspension) remain ineligible to request a loan,” the rule stated. “The FRTIB is considering whether to allow these participants to request loans in non-pay status and will address this subject in the final rule.”

Meanwhile, the Office of Personnel Management is thinking about a new way to help federal workers decide which insurance plan to enroll in as part of the Federal Employees Health Benefits Program. Meritalk reported Monday that the agency has issued a Request for Information seeking vendors to develop a “one-stop shop” portal for employees to compare and then enroll in health care plans.

Although OPM currently offers the ability to compare different FEHB plans on its website, the enrollment process and other customer service functions are largely decentralized across a multitude of agencies’ HR departments.

Among the functions OPM hopes to include in the portal are enrollment and decision-making support, enrollment processing, as well as enrollment and premium reconciliation and data collection and reporting. Responses to the request are due March 11.

On Tuesday, OPM announced that it is extending the deadline for the Combined Federal Campaign, the federal government’s annual charity giving effort, until Feb. 22.

The campaign was disrupted by the partial government shutdown, as donations are primarily made by way of payroll deductions. As a result, many payroll offices at unfunded agencies were not open to receive or process CFC pledges. Additionally, federal workers impacted by the shutdown would have been unlikely to make charity donations without knowing when they would next receive a pay check.

Although the deadline for making donations through the campaign was delayed, OPM said in a press release that money still will begin being disbursed to charities on April 1 as originally scheduled.

We also have other alternatives to where you don’t need to take a loan from your TSP to consider. Going six months without contributions is a tough penalty. Learn more by contacting us soon.

Congress Looks For New Ways to Pay Federal Employees

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Many of the 800,000 federal workers on furlough or working without pay during the now-month-long shutdown will miss their second paycheck on Jan. 25.

Some members of Congress are offering bills to reduce the financial impact of the shutdown on feds, even as the White House and Democratic lawmakers remain at odds over funding and reopening the government.

Rep. Anthony Brown (D-Md.) is pushing a bill that would permit the more than 400,000 federal employees working without pay — including FBI agents and airport security screeners — to collect unemployment benefits.

The Labor Department recently affirmed its policy of not permitting working people from collecting unemployment, even though they are not being paid.

“If Trump is going to continue to hold federal employees hostage, then we will ensure they yare provided for during the shutdown,” Brown said on Twitter.

Rep. Peter Welch (D-Vt.) wants to keep paying feds who work during a shutdown.

“It defies common sense and anyone’s definition of fairness to require federal employees to work without pay,” Welch said in a statement. His bill would apply to future shutdowns as well.

Rep. Eleanor Holmes Norton (D-D.C.) is offering a bill to give back pay to contractors in custodial, retail, food service, security and other typically low-wage jobs supporting federal activities.

Rep. Bob Gibbs (R-Ohio) offered a bill to pay employees required to work, as a one-off appropriation for the current shutdown. His bill attracted 23 co-sponsors – all Republicans. Other members have offered similar legislation.

Many feds are dipping into their retirement funds for cash during the shutdown. Rep. Pete Olson (R-Texas) wants to let them do so without incurring any penalty.

Commerce Secretary Wilbur Ross, meanwhile, said in an interview on CNBC’s Squawk Box that feds should look to their banks for assistance.

Asked about feds resorting to food banks because of missed paychecks, Ross said, “I know they are and I don’t really quite understand why, because I mentioned before, the obligations that they would undertake — say borrowing from a bank or a credit union — are in effect federally guaranteed, so that the 30 days of pay that some people will be out, there’s no real reason why they shouldn’t be able to get a loan against it, and we’ve seen a number of ads from financial institutions doing that.”

House Speaker Nancy Pelosi dismissed Ross’s comments.

“Is this a ‘let them eat cake’ kind of attitude? Or call your father for money?” Pelosi asked in her weekly press conference. “Or this is character building for you it’s all going to end up very well just so long as you don’t get your paychecks… I don’t quite understand why as hundreds of thousands of men and women are about to miss a second paycheck tomorrow.”

Plan to Pay Excepted Feds Immediately Gains Momentum

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With just days remaining until federal employees at unfunded agencies miss their second straight pay check, an idea to compensate at least some of them promptly appears to be gaining traction on Capitol Hill.

Two weeks ago, Sens. Ron Johnson, R-Wis., and Susan Collins, R-Maine, introduced the Shutdown Fairness Act (S. 113), which would make sure federal workers at unfunded agencies who are currently working without pay will get their pay checks on time, instead of after the government reopens. The measure would not compensate furloughed employees, although last week President Trump signed legislation to provide them with back pay after agencies reopen.

“All employees required to work during the shutdown to perform national security and other critical functions should receive paychecks on a current basis,” Collins said in a statement. “It is not fair to force employees to work and not pay them. Hundreds of thousands of federal employees and their families are being harmed by the partial government shutdown, and I am continuing to work with my colleagues and the White House to bring it to an end as quickly as possible.”

Jan. 18 marked the end of the second full pay period of the government shutdown. If Congress cannot reach an agreement on how to fund the government this week, roughly 800,000 employees, of which at least 420,000 are working without pay, will miss their second straight pay check.

Although the bill was introduced with four other Republican cosponsors, that tally had grown to 20 by Tuesday. And although he is not yet an official sponsor, Sen. Mark Warner, D-Va., threw his support behind the idea in multiple news interviews.

“The fact is, since we have already agreed to pay them when we reopen, why shouldn’t we at least go ahead and, even if we are shut down, pay these federal workers come Thursday, so they don’t have to incur additional pain and suffering?” Warner said Friday.

Warner repeated that sentiment on “Meet the Press” on Sunday. And on Tuesday, Warner introduced the Stop Shutdowns Transferring Unnecessary Pain and Inflicting Damage in the Coming Years Act, an effort to prevent future government shutdowns, similar to legislation introduced by Sen. James Lankford, R-Okla., and others last week.

Lankford’s bill would institute an automatic continuing resolution at existing spending levels in the event that Congress fails to approve an appropriations package, although the approved spending would decrease by 1 percent after 90 days, and an extra 1 percent for each 30 days thereafter. But Warner’s bill would maintain existing spending levels for all unfunded agencies, and end appropriations for Congress, its associated agencies and offices, and for the Executive Office of the President.

“The Stop STUPIDITY Act takes the aggressive but necessary step of forcing the president and Congress to do the jobs they were elected to do,” Warner said in a statement. “It is disturbing that the daily lives of hundreds of thousands of workers are at the mercy of dysfunction in Washington.”

Labor Dept. Denies Request That Excepted Feds Be Eligible for Unemployment

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Labor Secretary Alex Acosta has rejected an effort by District of Columbia Mayor Muriel Bowser to allow federal employees working without pay during the partial government shutdown to be eligible for unemployment benefits while agencies remain shuttered.

On Monday, Bowser sent a letter to Acosta requesting the change in policy. Currently, furloughed federal workers and idle contractors in a number of states can apply for unemployment, although they are expected to return the money when they return to work and Congress has approved back pay. But excepted employees, whose pay is guaranteed once the government reopens, cannot apply for unemployment.

In the letter, Bowser said it is unfair that employees working without pay are effectively in worse financial straits despite arguably sacrificing more during a shutdown.

“These federal workers are providing the nation and our region with vital services such as public safety,” she wrote. “Without a steady paycheck or unemployment benefits, hardworking federal workers and their families are forced to make difficult decisions: pay the mortgage or buy groceries; pay for a doctor’s appointment or pay to keep the lights on. These are decisions no one should have to make.”

But on Thursday, Bowser reported that her request was denied and decried the decision. She noted that in Washington, D.C., alone, more than 7,500 furloughed federal workers and contractors had already filed for unemployment. That number increases to roughly 9,000 federal workers, not including contractors, in the D.C. metro area.

“Federal workers and their families continue to pay the highest price for this unnecessary and unprecedented shutdown,” Bowser said in a statement. “It is unconscionable for the Trump administration to acknowledge that these individuals are working without pay and with no end in sight, but will not make the smallest effort to help them by allowing states to offer unemployment insurance benefits.”

The line between federal workers who are furloughed and excepted is shifting, as agencies like the IRS recall significant numbers of workers to restore services despite the lapse in appropriations. Observers have been vocal in questioning the legality of such decisions, and the constantly loosening interpretation of what constitutes the protection of life and property is the subject of a lawsuit by the National Treasury Employees Union.

Friday marked the end of the second full pay period of the shutdown, which is in its 28th day. Agencies will be required to send out new furlough notices next week, as the shutdown passes the 30-day mark. If a deal to reopen the government is not reached by Tuesday, employees of unfunded agencies likely will miss their second straight paycheck.

Best Dates To Retire in 2019

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It’s time for our annual look ahead at the best dates to retire in the next year. As always, your retirement coverage under the Civil Service Retirement System (including CSRS Offset) or the Federal Employees Retirement System (including transfers to FERS) will be an important factor in choosing the best date.

CSRS

Some of the best dates to retire for CSRS employees occur when the end of the month (or one of the first three days of the month) coincides with the end of a leave period. This allows a final leave accrual (remember, annual leave is paid in a lump sum after you separate) and also ensures that the day after your separation is the first day you begin accruing CSRS retirement benefits.

The best dates for CSRS in 2019 that will allow a retirement at the end of the month (or within the first three days of a month) and also at or near the end of a leave period will be Jan. 3, Feb. 1, March 1, March 30, Aug. 2, and Aug. 31. Jan. 3, 2020, would also work, because it’s within the 2019 leave year.

The following dates would also work for CSRS, but would not earn a final leave accrual since they are not at the end of a pay period: May 3, May 31, June 30, July 3, Sept. 3, Oct. 3, Oct. 31, Nov. 1, Nov. 30, and Dec. 3.

FERS

All immediate, optional FERS retirement benefits start the first day following the month of retirement. This means, for example, that regardless of whether you retire on Oct. 1, 2, 15, or 31, your first FERS retirement benefit will be paid on Dec. 1 for the month of November. Your salary will cease on the last day of your federal employment. If your goal is to have your retirement benefit begin in October, then Sept. 30 would be the best date for you. FERS employees should focus on choosing a date at the end of the month, even if it is a Saturday or a Sunday, since these days can be included in the computation of service credit.

Retiring at the end of a leave period can be good, even though your salary will stop on that date and your retirement won’t start until the first day of the following month. This is because you will be paid your salary for the days that you worked during that last month, which could be more valuable than the retirement benefit you would forfeit. Because the benefit is computed very differently under FERS than CSRS, be sure to consider the tradeoff of salary for retirement benefit when you are choosing an end-of-leave-period retirement date that isn’t near the end of the month.

Also, remember that your payroll office pays your salary two weeks behind and the Office of Personnel Management may take a few months to process your retirement application. So your first retirement payment may not arrive on the first day of the month. You may receive several interim retirement payments from OPM until your claim is finalized and monthly payments begin.

Leave Considerations

Is it important to you to receive a large lump sum payout of your annual leave? If the answer is yes, the end of the leave year is the time to plan your departure. FERS employees who have a substantial amount of creditable service would benefit from a Dec. 31, 2018 or Dec. 31, 2019 departure and CSRS employees might choose Jan. 3, 2019 or Jan. 3, 2020. Although this won’t be the end of the leave year, it will allow 25 leave accruals and receipt of your first retirement benefit for the month of January (payable on Feb. 1).

If maximizing your lump sum annual leave payout is not that important to you, then remember you will be paid for your accumulated and accrued annual leave regardless of the exact date you retire.

Are you ready to explore some specific dates in 2019? Follow the link Below to Request your Free Federal Retirement Review and we will also send you the

Second Furlough Notice and Another Missed Paycheck Appear Likely for Shutdown Feds

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Early next week will mark a new set of key deadlines in the partial government shutdown, with significant implications for the more than 800,000 affected federal employees.

By Monday, the shutdown will have dragged past the 30-day marker. That means the furlough notices most federal workers currently sent home without pay received on Dec. 21 will expire. Due to a quirk in federal statute, furlough notices can only last for a month. Most of the 300,000 employees still furloughed received a message at the start of the shutdown that read: “This furlough is not expected to exceed 30 days. Therefore, it expires on Jan. 21.”

According to guidance from the Office of Personnel Management, agencies should treat a shutdown passing the 30-day mark as resetting the clock.

“When the shutdown furlough goes beyond 30 days, agencies should treat it as a second shutdown furlough and issue another adverse action or furlough notice,” OPM said, which also clarified that reductions in force would not take place as part of any shutdown.

OPM did not respond to requests to confirm whether the second round of furlough notices would go out, whether it was coordinating those efforts with federal agencies or how the notices would be communicated to employees, instead referring questions to the Office of Management and Budget. OMB also declined to answer any questions, referring questions back to OPM.

Tuesday will bring another key day for federal employees, as multiple White House officials have said it is the deadline by which the government must be reopened to prevent feds from missing a second paycheck. In criticizing House Speaker Nancy Pelosi’s, D-Calif., planned trip overseas to war zones—which has since been canceled after President Trump revoked the military aircraft Pelosi and the congressional delegation planned to use—White House Press Secretary Sarah Sanders noted that Pelosi was not scheduled to return until Tuesday.

“We want to keep her in Washington,” Sanders told reporters on Thursday. “If she leaves, she guarantees that the second round of paychecks to workers won’t go out.”

Most of the more than 800,000 federal employees affected by the ongoing shutdown are not scheduled to receive their next paycheck until Friday, Jan. 25, but federal agencies need a few days to certify time and attendance sheets and recall workers who process them. All employees, both those furloughed and those working due to exceptions and exemptions, are guaranteed back pay. Congress has also instructed agencies to make employees whole “at the earliest date possible after the lapse in appropriations ends,” regardless of the timing of the next pay period or when the next round of paychecks is scheduled to go out.

Federal employees first missed their paychecks on Jan. 11, a date many lawmakers in both parties initially saw as a key date and potential turning point. As it turns out, it yielded no developments.

The second round of furlough notices, and missed paychecks, is all but assured. Both chambers of Congress have canceled scheduled recesses for next week, but members of the Senate have largely left Washington, D.C., and no votes are scheduled. They have been put on notice, however, to stay available for a quick return if a deal to reopen government is reached. The House on Friday adjourned until Tuesday.

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It’s Official: Furloughed Feds Will Receive Back Pay Once the Shutdown Ends

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