1.9 Percent Civilian Pay Raise Survives Committee Vote, Now Heading to Full Senate

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The Senate Appropriations Committee on Thursday unanimously advanced a fiscal 2019 spending bill that contains a 1.9 percent pay raise for civilian federal employees, going against President Trump’s proposed pay freeze for next year.

Committee members voted down 29-2 a Republican amendment to strip the pay increase from the Financial Services and General Government Appropriations bill, which will now head to the full Senate. Ranking member Sen. Chris Van Hollen, D-Md., applauded the panel for preserving the small raise.

“Our federal workforce protects our nation, ensures the safety of our food and medicine, delivers Social Security and veterans’ benefits, and carries out countless other responsibilities on behalf of our citizens. Yet instead of treating them like the dedicated and hardworking professionals that they are, the Trump Administration constantly attacks them,” Van Hollen said in a statement. “I was proud to work with my colleagues on both sides of the aisle to secure this modest raise, and I will keep fighting to ensure our federal employees receive the compensation and respect they deserve.”

The House Appropriations Committee did not include any provisions on federal employee pay in its version of the general government spending bill, which effectively endorses the White House plan for a freeze released as part of President Trump’s 2019 budget request. Neither House nor Senate appropriators have acted to advance the Trump administration’s proposed $1 billion interagency workforce fund, pitched by officials at the Office of Management and Budget and the Office of Personnel Management as a way to fund pilot programs that institute pay for performance.

The proposal to raise civilian pay by 1.9 percent falls short of the White House’s pay recommendation for members of the military, which sits at 2.4 percent in 2019. Members of Congress traditionally have pushed for parity in compensation increases for the civilian and military workforces, although they were unsuccessful in enacting pay parity last year.

Some members of Congress also signed onto a bill earlier this year that would provide a 3 percent across-the-board raise for civilian federal employees. Van Hollen said he supports that measure as well.

Now some other key information on how this would affect your pension if you would retire by the end of October.  Schedule your Personalized Federal Retirement Review so that we can explain how this will impact you.

White House Plan for the United States Postal Service – Fix It Then Make It Private

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The Trump administration on Thursday called for the privatization of the U.S. Postal Service, an agency with 600,000 federal employees and whose creation was codified by the Constitution.

The White House made the proposal in its wide-ranging plan to reorganize the federal government. Privatizing the postal service was among 32 distinct ideas it said would help agencies run more efficiently. It first called for reforms to the Postal Service that would create a more sustainable business model, but those changes would be made only for leverage to then sell the entire agency to the private sector. The proposal comes as a task force created by President Trump is working on a series of reforms to put USPS on firmer financial footing, which it will deliver in a report by Aug. 10.

USPS is continuing to expand its delivery network despite a significant decline in mail volume, the administration said, and can “no longer support he obligations created by its enormous infrastructure and personnel requirements.” The mailing agency is required by law to offer its services to every address in the country and has reported losses of more than $1 billion for 11 consecutive years.

“A privatized Postal Service would have a substantially lower cost structure, be able to adapt to changing customer needs and make business decisions free from political interference, and have access to private capital markets to fund operational improvements without burdening taxpayers,” the White House said. “The private operation would be incentivized to innovate and improve services to Americans in every community.”

USPS is caught between its requirement to operate like a business with “the expenses and political oversight of a public agency,” the administration said. Major savings would stem from not just reducing services and more pricing flexibility, but by freeing the agency to “more fully negotiate pay and benefits.” The Postal Service currently negotiates pay and cost-sharing of benefits with labor unions, but is required to participate in federal health care and retirement programs. Its prices are capped and approved by an oversight body, the Postal Regulatory Commission, which the White House suggested could still exist under a privatization model.

Another advantage of a private postal system, the administration said, would be access to private capital. The Postal Service does not currently receive any federal appropriations, aside from money the government spends for specific services.

Privatization could occur either through an initial public offering or a sale to an existing company, the White House said.

It said the reforms proposed by the task force Trump created would be implemented to stabilize the agency and better prepare it for its defederalization. That group has been meeting with stakeholders throughout the postal community for the last several weeks as it readies its recommendations.

The proposal is unlikely to gain any traction in Congress, which is currently working through its own reform packages to help the cash-strapped agency. Lawmakers on both sides of the aisle have spoken to the importance of preserving a federal mailing system to ensure delivery to all Americans, even to areas that the private sector has decided is not profitable to service. Members of Congress representing rural areas have particularly pushed not just the preservation of the Postal Service but an expansion of its offerings.

Lawmakers have not shown an appetite for reducing postal services, let alone privatizing the agency, intervening on a bipartisan basis in recent efforts by the agency to reduce the number of post offices, cut the number of delivery days and consolidate processing plants. The opposition to the proposal was broad and swift.

The National Association of Letter Carriers said the proposal has rendered Trump’s task force effectively moot and ignores the interests of every postal stakeholder aside from private shippers. NALC, along with the other major postal unions, has met with the task force and submitted its ideas for putting USPS on a better path.

“Now that we know that this administration and its Task Force will make recommendations on reforms to achieve OMB’s privatization goals, NALC will work tirelessly with other stakeholders and Congress to oppose this faulty privatization plan every step of the way to preserve this public service,” said NALC President Fredric Rolando.

Art Sackler, who heads the Coalition for a 21st Century Postal Service, a group of large-scale mailers such as Amazon, eBay and the Parcel Shippers Association, said his members were “very, very concerned about the Trump administration’s proposal.

“From our standpoint, privatization is not the answer,” Sackler said. Such a move would “sow confusion” and actually make matters worse for the Postal Service, he explained, by leading to further declines in mail volume. He added that rural communities would be particularly harmed: “No private company is going to want to undertake the level of commitment financially and other ways to really service those areas in the way the Postal Service serves them now as a vital link to the rest of the country.”

The coalition has signed onto legislative efforts underway in Congress, different iterations of which have bipartisan support in both chambers. Sackler called the White House’s efforts to deviate from those compromise plans “frustrating, but not surprising.”

Mark Dimondstein, president of the American Postal Workers Union, said the plan was marked by misinformation.

“Privatizing the Postal Service is not in the public interest and would be nothing more than a raid by corporate pirates on a national treasure,” Dimondstein said.

Unions Seek Court Action to Block Trump Orders

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Unions Seek Court Action to Block Trump Orders

On May 25, 2018, President Trump signed three executive orders on federal employee disciplinary and labor-management policies. In the aftermath of the signing, there was a huge uproar from every nook of the federal employment sector. This week, two employee unions, NTEU and AFGE, went to court to challenge the first two orders.

The first executive order came as no big surprise as The Trump administration has always made it a priority to make it easier for federal agencies to fire underperforming employees. More specifically, the order would significantly reduce the time a worker under investigation for underperformance or misconduct could spend on probation.

The second order slaps unions right in the face. It looks to limit official time use on union matters such as negotiating contracts, settling disputes, and whatnot. In essence, the order states that a federal worker should spend at least 75% of his or her official time doing government work. Currently, Civil Service Reform Act (CSRA) of 1978 offers protection on the use of official time.

According to the Act, the official time use is often up to the negotiations between the relevant agency and unions. That’s where the third executive order comes in. It looks to place the responsibility of renegotiation of official time use with OMB office within the White House.

Challenging the Orders

In what could be the onset on a long-standing court battle, American Federation of Government Employees (AFGE) and National Treasury Employee Union (NTEU) have filed suits against the first two orders in separate federal courts.

Both NTEU and AFGE want the courts to block The Trump’s administration plan to limit the use of official time on conducting union roles to a minimum of 25 percent. In the order, the federal agencies would target in negotiations to permit only one hour per bargaining unit employee per year. And to make matters worse, the use of official time would be subject to the approval of Office of Management and Budget.

National Treasury Employee Union, on its own, filed another suit in the federal district court against the first executive order on federal employee disciplinary process. In its statement, NTEU asserts that limiting the amount of time for an employee to show improvement to no more than 30 days denies every employee the “[fair] opportunity” to demonstrate “acceptable performance” that is guaranteed under the Civil Service Reform Act of 1978.

Whether they’ll overturn the orders remains to be seen. What’s surefire, however, is that it’ll be a lengthy, rocky lawsuit.

OPM Lays Out Proposed Cuts to Federal Retirement Benefits

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Office of Personnel Management (OPM) Lays Out Proposed Cuts to Federal Retirement Benefits

In the wake of Office of Personnel Management Director Jeff Pon has proposed changes to federal employees’ retirement benefits to more align them with that of the private sector.

In a letter to House Speaker Paul Ryan (R-Wis.), Pon proposed four main changes to federal employee retirement benefits that will affect 2.6 million federal retirees and survivors who receive monthly annuity payments:

1) Eliminate the Federal Employees’ Retirement System annuity supplements for new retirees and survivor annuitants;

2) Increase the Civil Service Retirement System and FERS average pay period to five years from three years;

3) Increase FERS employees’ contribution to their retirement to one percent each year until they reach 7.25 percent of basic pay; and

4) Reduce or eliminate retirement cost-of-living adjustments.

The agency expects to save an estimated $143 billion over ten years if all four proposes are enacted.

“The Office of Management and Budget (OMB) has advised there is no objection to the transmittal of these legislative proposals to the Congress and that their enactment would be in accord with the program of the president,” Pon said in the letter.

He asked that Congress give “prompt and favorable” consideration of the proposals.

To learn more, please schedule your free retirement review or contact us today.

Why Going Fed Was Possibly the Best Decision You’ve Ever Made

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You’d be forgiven if you wish you could ditch the feds for the private sector. After all, you have seen how those executives, hedge fund managers, big-time lawyers, and lobbyists live it large with their stately homes in leafy suburbs. Perhaps you are wishing had you switched careers, that could be you.

The chances are that you have heard about your college mates having it good. Talk about big end-year bonuses, stock options, and profit-sharing deals. After all, you are no different. You went to the same college, took similar courses, and graduated the same year.

You are probably wondering: “with my drive, talent, and skills, I could be better off in the private sector.” The truth of the matter is that you are probably not.

That’s right. If you thought you’d do much better outside of the federal sector, think again. At least, that’s what a recent study by the FRB (Federal Reserve Board) has confirmed. What’s more interesting is that more than 12,000 non-fed American employees took part in the study involving a series of surveys and polls.

An incisive look at the study shows that life outside of federal sector isn’t a bed rose:
Approximately 30 percent of adults surveyed indicated that they don’t have a steady income every month. What’s more worrying is that most of them claim that they cannot cover their monthly expenses with their paycheck. Still think your paycheck and federal retirement benefits are not good enough?

Nearly 37 percent of adults responding to the polls said that they don’t have any retirement benefit plan such as IRA, 401K, etc. What a wake-up call, right? As a fed, you can always count on your federal retirement benefits to take care of you in your retirement.

A further 25 percent of participants said that they have neglected medical care because they simply could not afford dental care for their children.

40 percent of those polled indicated that they don’t have sufficient money reserve in their bank accounts or elsewhere. That means 40 percent of Americans working in the private sector don’t have enough cash to pay for emergencies like car repair bill, sudden medical expenses, etc.

Think for a second. With robust federal retirement benefits, the TSP’s 5% match, health coverage when you’re in service and retired, and more, staying in the fed fold is perhaps the best decision you have ever made.

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Will You Make It On A Flatline Pension

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Will You Make it on a Flatline Pension?

Let’s get one thing straight right off the bat, the average life expectancy among American fed retirees is now at a historic high. Thanks to tremendous advancement in health & personal care services, federal retirement benefits, and investment in medical research, it’s not surprising that most of them will live well beyond their mid-80s, if not their 90s. In fact, according to a recent study from School of Gerontology at USC Leonard Davis, if you retire at 65, you can expect to live until the age of 86+.

Interestingly, another study shows that some of the retired Americans today spend more time in retirement than they did in their employment years. So, no matter how you look at it, the chances are that you’ll live longer than your parents or grandparents. That in and of itself can be a blessing or a curse to you depending on your federal retirement benefits. If your income stays steady with inflation over time, that’s well and good. If it doesn’t, you are in for long, bumpy ride.

Trump’s Flatline Retirement

For a long time, FERS retirees have had it good. They’ve lived reasonably comfy lives after giving their best years to serving Uncle Sam. Thanks to Cost of Living Adjustment (COLA) program, the feds retiring would establish a standard of living and make sure it keeps up with year-over-year inflation.

You see, with inflation catch-ups, fed retirees can comfortably make do with income from their federal retirement benefits, especially during periods of high inflations. But, that’s about to change – for the worst! Just recently, President Trump signed a set of three orders, one of which will see the elimination of COLA for ongoing and future feds retiring under FERS.

What does that mean for current federal workers? That means no inflation protection. If you go into retirement on a $1,560/month take-home in 2018, you’d still expect to receive $1,560 every month in 2028. That’s the pinch of a flat-lined retirement you’re looking at if The Trump administration’s proposed legislation goes into effect.

Unlike folks under FERS, those retiring under CSRS would still get cost of living adjustments. However, their COLAs will be set at 0.5% below the actual inflation rise. That means the value of the Civil Service Retirement System annuity will shrink every other year.

Elimination of FERS Supplement

And that isn’t the only bad news contained in the White House’s plan. If you are also planning to retire before the age of 62, you can kiss goodbye to your take-home pay. The elimination of the so-called FERS supplement will deal a massive blow to fed workers such as the police, firefighters, and air traffic controllers who are required by the law to retire by 57.

To learn more about your Federal Retirement Benefits, please request your personalized retirement review today.

Largest Federal Employee Union Sues to Block Official Time Executive Order

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The largest union representing federal employees sued the Trump administration Wednesday over President Trump’s executive order significantly curbing the use of official time by union representatives, arguing the edict violates the First Amendment and exceeds the president’s constitutional authority.

In a lawsuit filed at the U.S. District Court for the District of Columbia, the American Federation of Government Employees said the White House’s Executive Order Ensuring Transparency, Accountability and Efficiency in Taxpayer Funded Union Time Use violates the First Amendment-guaranteed freedom of association and effectively rewrites portions of the 1978 Civil Service Reform Act without the assent of Congress.

Last week, Trump signed an executive order instructing agencies to no longer allow union officials to spend more than 25 percent of their work hours on official time, a practice where union federal employees are compensated for performing representational duties. The order also stipulated that unions not be able to use official time to lobby Congress or to represent employees who have filed grievances or are appealing adverse personnel actions.

The executive order also said that unions must pay rent for the use of federal office space and that agencies should stop covering official time-related travel expenses.

At the crux of AFGE’s lawsuit is the provision of the executive order barring union employees from using official time to represent a colleague in grievance proceedings, which carves out an exception for an employee working on his or her own grievance.

“Employees may not use taxpayer-funded union time to prepare or pursue grievances (including arbitration of grievances) brought against an agency . . . except where such use is otherwise authorized by law or regulation,” the order stated. “The prohibition . . . does not apply to an employee using taxpayer-funded union time to prepare for, confer with an exclusive representative regarding, or present a grievance brought on the employee’s own behalf.”

That, the union argued, is a violation of AFGE’s freedom of association.

“There is no valid basis to distinguish grievances brought by the union [on behalf of the] union or grievances in which a union representative seeks to represent another employee from grievances brought on an employee’s own behalf or instances in which an employee is to appear as a witness in a grievance proceeding,” the union wrote. “By singling out labor organizations for disparate treatment, [the executive order] unlawfully restrains and retaliates against AFGE and its union-member representatives, separately and collectively, in and for the exercise of their rights to expressive association.”

AFGE also argued that mandating the number of hours agencies can authorize for employees’ use of official time improperly amends the section of the 1978 Civil Service Reform Act governing collective bargaining negotiations and establishing official time as a lawful practice. By setting a unilateral cap on the use of official time, the administration violated the provision of the 1978 law that says the practice will be granted “in any amount the agency and the exclusive representative involved agree to be reasonable, necessary and in the public interest,” the union argued.

“[The law] provides that agencies have a duty to bargain in good faith that includes the obligation to approach negotiations with a sincere resolve to reach agreement,” AFGE wrote. “By purporting to fix a preexisting and specific cap on the amount of official time that an employee may use in a fiscal year, and by purporting to add allegedly excess amounts in one fiscal year to the cap calculation for the following year, [the order] is contrary to [existing law].”

In a statement, AFGE National President J. David Cox described the executive order as an attempt by the White House to “score political points” by bashing federal unions and employees.

“This is a democracy, not a dictatorship,” Cox said. “No president should be able to undo a law he doesn’t like through administrative fiat . . . Congress passed these laws to guarantee workers a collective voice in resolving workplace issues and improving the services they deliver to the public every day.”

NTEU Reacts To Recent Executive Orders Targeting Feds

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The National Treasury Employees Union president is calling the three executive orders released by Trump last week a “threat” to the federal workforce and the federal government as a whole.

“The executive orders indicate an administration threatened by workers with rights. Our union has been around 80 years and this is not our first battle on behalf of federal employees,” NTEU Tony Reardon said. “The truth is these orders will disrupt the workplaces of every agency, add red tape and impede the quality work that taxpayers expect and deserve,” he added.

The executive orders, issued on May 25, will 1) limit the amount of time an employee can be under investigation for misconduct and encourages firings for underperformers, 2) states that employees who conduct union activities while on the job must spend at least 75 percent of their time doing government work and 3) calls for the Office of Personnel Management to renegotiate contracts with unions regarding the reporting of official time instead of working directly with individual agencies.

Reardon stressed that the orders will not immediately effect current employees and noted that the collective bargaining agreements currently in place, will remain in effect.

“NTEU believes agencies will need to wait until contracts are reopened or expired before they can try to impose the anti-labor provisions called for by the executive orders,” according to the statement.

Officials Outline Plans to Loosen TSP Withdrawal Rules

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Officials at the federal government’s 401(k)-style retirement savings plan on Wednesday announced how they plan to provide additional flexibility to participants in light of a law signed by President Trump last fall.

The 2017 TSP Modernization Act, enacted last November, will allow federal employees and retirees to make multiple age-based withdrawals from their Thrift Savings Plan accounts and remain eligible for partial withdrawals after they leave government. Additionally, those who have left government would be able to make multiple partial post-separation withdrawals.

At a meeting of the Federal Retirement Thrift Investment Board, which administers the TSP, project manager supervisor Tanner Nohe said employees of the agency have been working on implementation since the new law was signed. They plan to finish implementation by September 2019.

Under current rules, participants in the TSP are allowed one partial withdrawal in their lifetime—either in-service at age 59 1/2 or one after leaving federal service. After that one withdrawal, if a participant wishes to take money out of their account, they must make a full withdrawal, setting up monthly payments or an annuity or take a lump sum.

But Nohe said once the new rules are in place, a participant will be able to make post-separation withdrawals as frequently as once every 30 days without triggering a full withdrawal. Additionally, in-service age based withdrawals will be possible up to four times per year.

“With the change to one withdrawal every 30 days, that’s just a processing rule,” he said. “It’s to prevent mistakes or duplication.”

The law also lays the groundwork to provide participants greater flexibility in changing the amount and frequency of monthly installment payments. Before the TSP Modernization Act, a former federal employee could only receive payments from their account on a monthly basis, and changes to the sum of those payments could only be made during an open season period between October and December.

Nohe said that under the upcoming changes, a participant could elect to receive TSP payments on a monthly, quarterly or annual basis. On top of that, they can change both the amount and frequency of payments at any time of year, and participants can elect to stop and restart installment payments anytime. Retirees also will be able to make partial post-separation withdrawals while receiving regular payments.

Before the rest of the provisions of the new law go into effect, TSP will cease its practice of “account abandonment” as early as August, Nohe said. Under current TSP and Internal Revenue Service rules, when a participant reaches the age of 70 1/2, they must arrange for a full withdrawal and make a required minimum distribution to take out of their account each year.

If someone does not do that, TSP moves all of their holdings into the G Fund—government securities that accrue at a statutorily mandated interest rate—and contacts the participant to inform them of the change. Agency spokeswoman Kim Weaver said that usually prompts the person to contact the agency, at which point they set up how they wish to receive payments and the money is reinvested in other portfolios as they wish.

Nohe said that under the change that will go into effect this summer, that full withdrawal election is no longer required. Instead of abandoning an account, the agency will send a check for the minimum withdrawal payment required by law. Additionally, participants will be able to select whether the required payments come from their standard or Roth account, or some combination of the two.

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Trump Goes After Fed Employees With Executive Orders

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In three executive orders signed May 25, 2018, President Donald Trump took aim at making federal employees easier to fire while cutting back on union time.

The first order fulfils a longstanding goal of the Trump administration in making it easier for the government to fire poor performers from federal positions. The order would limit the amount of time an employee under investigation for misconduct could spend on probation and encourage firings.

The second order specifically targets the use of official time, which allows federal employees to conduct union activities such as representing employees in disputes and negotiating contracts with the agency, by stating that federal employees must spend at least 75 percent of their time doing government work.

Official time use has recently come under fire by both OPM and members of Congress, who say that the rising amount of time spent per employee is a waste of taxpayer money. However, many experts have said that current methods for measuring official time use are likely wildly inaccurate.

The use of official time is protected under the Civil Service Reform Act of 1978, and the amount of official time used by employees within an agency is usually up to the negotiations between unions and the agency.

The third of the executive orders calls for the renegotiation of such contracts, placing the responsibility for the negotiating strategy with the Office of Management and Budget within the White House and requiring that union contracts are posted online.

“These Executive Orders are about protecting taxpayers’ dollars, including those of our dedicated federal employees, and putting those resources to use in the most efficient and effective way possible,” said OPM Director Jeff Pon. “By holding poor performers accountable, reforming the use of taxpayer-funded union time and focusing negotiations on issues that matter, we are advancing our efforts to elevate the federal workforce.”

The American Federation of Government Employees, however, called the orders “hellbent on replacing a civil service that works for all taxpayers with a political service that serves at its whim.”

“President Trump’s executive orders do nothing to help federal workers do their jobs better. In fact, they do the opposite by depriving workers of their rights to address and resolve workplace issues such as sexual harassment, racial discrimination, retaliation against whistleblowers, improving workplace health and safety, enforcing reasonable accommodations for workers with disabilities, and so much more,” said AFGE President J. David Cox Sr. “These executive orders strip agencies of their right to bargain terms and conditions of employment and replace it with a politically charged scheme to fire employees without due process.”