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Federal Pay

A Paycheck Mistake, and Changes to TSP Catch-Up Contributions

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The agency responsible for processing payroll for around 650,000 federal workers last week announced that it had issued incorrect paychecks for some employees across the federal government earlier this month.

The problem stemmed from the final paycheck of the 2019 calendar, which ended Jan. 4 and was issued Jan. 10. A number of federal workers reported receiving both smaller and larger amounts than they were owed.

The National Finance Center, which is a subcomponent of the Agriculture Department but provides payroll services for a variety of federal agencies, first acknowledged the discrepancies on Jan. 10, and said the problem likely resulted from federal payroll tax withholding.

By Jan. 14, the National Finance Center announced that it had identified the root cause: employees who had not submitted a new W-4 form or were not exempt defaulted to a new, often incorrect number of exemptions. Single federal workers had taxes withheld as single, with two exemptions, while married feds had taxes withheld as married, with three exemptions.

NFC said it implemented changes to fix the problem “prior to the second pass” on the relevant pay period’s payroll processing. Although the agency said it expected to have compiled a list of all employees who received the wrong amount in their pay check by the end of last week, it did not announce a timeframe for when employees who are owed money would be made whole, or when employees who were overpaid will see a lighter paycheck.

“Updates will be forthcoming as additional information becomes available and the corrective action is finalized,” NFC wrote.

Meanwhile, the federal agency responsible for administering the federal government’s 401(k)-style retirement savings program proposed new regulations this week to make it easier for older federal employees to make catch-up contributions to their Thrift Savings Plan accounts.

Currently, TSP participants age 50 and older may exceed the normal 401(k) annual contribution limits in order to make up for time spent in the private sector or when they were otherwise unable to invest in the TSP. But in order to do so, those federal workers must submit a form authorizing catch-up contributions, in addition to the standard contribution election form that all participants provide to their agency.

In draft regulations set for publication to the Federal Register Thursday, the Federal Retirement Thrift Investment Board, which governs the TSP, proposed that beginning Jan. 1, 2021, federal workers will no longer be required to submit that second form to enroll in catch-up contributions.

“Instead, the TSP will simply continue to accept contributions based on the participant’s contribution election that is already on file, until his/her contributions reach the combined limits on catch-up contributions and other types of contributions,” the agency said.

TSP officials first announced that this change would be coming last year. It is part of an effort to make the process simpler and easier for federal workers to participate, as well as to streamline the process for both the TSP and federal agencies.

According to the proposed regulations, beginning next year, when federal workers hit the standard annual contribution limit, the TSP will automatically cross reference their ages to see if they are eligible to make catch-up contributions. If the employees are at least 50 years old, they will be able to continue to make contributions up to the higher catch-up contributions limit.

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Bipartisan Spending Deal Includes Average 3.1% Pay Raise for Federal Workers in 2020

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Congressional negotiators agreed to use language advocated by Democrats to Provide an across-the-board 2.6% Pay increase to Federal Civilian Employees, along with an average 0.5% boost in Locality Pay.

Congress is set to provide federal civilian employees with an average pay raise of 3.1% next year as part of a spending deal that must pass before Friday’s deadline to avert a government shutdown.

According to a House Democratic aide, language in the spending legislation, which lawmakers still were finalizing Monday afternoon, would provide feds with a 2.6% across-the-board raise, along with an average 0.5% increase in locality pay.

The provision mirrors language passed by the Democrat-controlled House as part of its fiscal 2020 Financial Services and General Government appropriations bill earlier this year. The Senate’s version of the bill contained no language on employee compensation, effectively endorsing President Trump’s plan to provide federal workers with a 2.6% across-the-board raise but no increase in locality pay.

The agreement also marks the return of pay parity, as members of the military are also slated to receive an average 3.1% pay raise. Last year, although service members received a 2.6% pay increase, civilian feds only saw a 1.9% raise, as part of a deal to end the 35-day partial government shutdown.

The House and Senate must both vote to approve the spending deal, which will be split into two bills, by Friday, in order to avoid another government shutdown.

TSP to Change COLA Calculations and More

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The agency responsible for administering the federal government’s 401(k)-style retirement savings program announced Tuesday that it plans to change how it calculates annual cost of living adjustments associated with some of its offerings for retirees.

When Thrift Savings Plan participants take a post-separation withdrawal, they have the option to receive the money over time in the form of an annuity with an increasing payment option, which is based on an annual cost-of-living adjustment calculation. Currently, these annual adjustments are tied to inflation, as measured by the annual change in the consumer price index, with a cap of 3% per year.

Since the TSP contracts out annuity services to a vendor, that vendor charges fees based on an annual increase of 3% per year, even when the actual annual adjustment is less than that.

According to a proposed rule published Tuesday in the Federal Register, the TSP would cease tying annual cost of living increases to inflation, and instead provide an annual fixed increase of 2% per year. Officials noted that the Federal Open Market Committee has stated its aim is to keep inflation at that rate each year “over the medium term,” and that the average annual rate of inflation over the last 20 years has been 1.95%.

The change, according to the TSP, would allow participants who take an annuity to receive, on average, a 10% to 15% higher initial monthly payment, due to reduced fees to the annuity vendor.

“Although this increase comes at the expense of a smaller amount of inflation protection (i.e., protection only up to 2% per year as opposed to 3%), using a fixed rate makes it less likely that participants will pay for more inflation protection than they need,” the TSP wrote.

And with a fixed COLA adjustment each year, participants will have more certainty regarding how much money they will receive on a monthly and yearly basis.

In the wake of the surprise news that President Trump will grant federal employees the day off on Christmas Eve next week, the Office of Personnel Management has issued guidance clarifying how that decision will affect federal workers’ pay and benefits.

On the pay front, full-time federal employees will receive their usual basic pay despite federal agencies being closed. And those who had been scheduled to take leave will not be charged for the day off. But if an employee has scheduled “use or lose” annual leave and cannot reschedule it before the end of the leave year, which falls on Jan. 4 for most workers, it will not be refunded to their leave bank.

The holiday’s impact on part-time and alternative work schedule workers varies, but OPM issued a fact sheet to go over a variety of possible scenarios

Should Feds Prepare for Another Government Shutdown

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We’re not even 12 months removed from the most recent government shutdown and already there are fears that another shutdown is possible later this month. The latest continuing resolution Congress passed to sustain government operations while lawmakers negotiate a budget deal runs out on Dec. 20, and while most lawmakers seem to believe an agreement is within reach, it is not certain that President Trump would approve it. That possibility should get every federal employee’s attention.

LifeCents survey data suggests that many of the 800,000 workers impacted by the previous shutdown suffered significant hardships: 22% percent of respondents claimed to have missed a significant payment, while 24% reported that the shutdown took a physical and emotional toll.

One career government employee told us: “The long shutdown was the fifth time I have experienced being shut out from my job, with the associated worries of how long it will last, when will we get back pay, and how long will my emergency fund last.” After more than 30 years of federal service, he finally decided to leave his job at the IRS as a direct result of the shutdown.

While this employee had an emergency fund that could sustain him until the government reopened, many people do not. Studies show that 78% of American citizens live paycheck to paycheck, while 40% do not have enough in savings to cover a $400 emergency. For such individuals, the prospect of missing one or more paychecks could be catastrophic.

Where to Begin

Agencies can help protect employees from potential financial hardship by encouraging workers to establish emergency savings funds, and then help them acquire the knowledge and build the habits to regularly contribute to that fund.

Many will find the prospect of building a savings account with enough money to cover three to six months of living expenses daunting, so employers should advise people to start small. A base amount of a few hundred dollars can still cover a small emergency and may even be enough to see employees through an abbreviated shutdown. Maintaining a small emergency fund can also limit the amount of debt someone takes on when they’re not receiving an income. Instead of using credit cards to cover expenses, employees can rely on their emergency funds, allowing them to avoid accruing new debt.

There are programs available to educate government employees on savings strategies. For example, the Office of Personnel Management provides retirement and financial literacy training that can help employees better manage their finances.

Inspiration From the Private Sector

Although the public sector is more limited than the private sector in its ability to incentivize employees, there are aspects of some private sector savings programs that government agencies may wish to consider emulating.

For instance, many companies have implemented “helping hands” or “hardship” funds. Employees contribute a small amount of money on a regular basis into a specialized savings account as a gesture of goodwill to their colleagues. These funds accumulate and can be disbursed in case of an emergency—such as a government shutdown.

Some companies have established community savings programs that reward or recognize participants when they achieve specific goals. For example, an organization may set a savings goal of $400 per person and reward employees with a celebratory event once everyone hits that goal. Initiatives like this show that a small incentive tied to a specific goal can help people develop long-term savings habits.

Benefits of Financial Security 

Shutdowns sow tremendous confusion and uncertainty among employees. By helping employees understand the importance of creating emergency funds, managers can proactively provide workers with the underpinnings of a financial safety net that may help soften the blow.

Investing in employees’ financial literacy and wellness can also help improve job satisfaction and reduce attrition. A 2019 PwC survey found that employees value having a financial wellness benefit and access to unbiased counselors. Organizations that provide such benefits are more likely to be seen as good places to work.

While managers cannot control shutdowns, they can help employees understand what tools, benefits, programs, and resources they have at their disposal to protect themselves during economic hardship

Getting Close to Retirement

Is your retirement date just around the corner and you have Questions?  We specialize in helping you plan, prepare and execute your retirement plan with the Full Assistance of My Federal Retirement Help.  Just contact us today

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Federal Retirees Will Get 1.6% COLA in 2020

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Retired federal workers will receive a cost of living adjustment of 1.6% to their defined benefit pensions next year, according to an announcement from the Social Security Administration.
The increase, which also applies to recipients of Social Security benefits, is a downgrade from the 2.8% increase some federal retirees received in 2019, and the 2% boost they saw in 2018.

The annual COLA is based on the percentage increase in the average Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the third quarter of the current year over the average CPI-W for the third quarter of the previous year in which a COLA became effective.

Unlike last year, when Civil Service Retirement System participants received the full 2.8% COLA while Federal Employees Retirement System enrollees only received a 2% increase, the 1.6% increase applies to participants in both FERS and CSRS.

That’s because FERS retirees only receive the full COLA if the difference in the CPI-W is 2% or less; if the difference is between 2% and 3%, they receive a 2% increase; and if the change is 3% or higher, FERS participants receive 1 percentage point less than the full increase.

Late last year, Rep. Gerry Connolly, D-Va., introduced the Equal COLA Act, a bill that would ensure FERS and CSRS retirees received the same cost of living adjustment each year. Connolly reintroduced the bill (H.R. 1254) last February, although it has yet to receive a hearing.

The COLAs will take effect next January.  If you are thinking about Retirement and want a Free Retirement Review or need any assistance, we can help you.  Please Contact Us to request your free consultation.

2020 Open Season Coming Soon – Time to Start Thinking About it.

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Among the signs that fall is upon us is that health insurance open season looms in the not-too-distant future. The 2020 open season will run from Nov. 11 to Dec. 9, 2019. It makes sense to do some homework before the start of open season because, as usual, you’ll have a lot of options.

The 279 health plans available in the Federal Employees Health Benefits Program include:

  • 18 fee for service plans open to all
  • 4 fee for service plans with availability limited to certain groups
  • 257 HMO plans
  • 19 high deductible health plans
  • 28 consumer driven health plans

Plan brochures and plan comparison tools will be available in early November, before the start of open season. The 2020 rates for all FEHBP plans are available now.

There’s a new indemnity benefit plan called GEHA Elevate that will fill a spot that has been open for 30 years in FEHBP. Indemnity plans allow you to visit almost any doctor or hospital you like. The insurance company then pays a set portion of your total charges.

The lines between preferred provider organization plans and health maintenance organization plan continue to blur.  Today, you may find that a traditional fee for service plan such as Blue Cross/Blue Shield Basic Option requires the use of network providers (similar to an HMO) for the plan to provide coverage.

Plans such as Aetna Direct, which is classified as an HMO, work well for retirees nationwide who are enrolled in Medicare Parts A & B. It does not require a referral to see a specialist and coverage is available outside of the network providers.

Laurie Bodenheimer, acting director of health care and insurance at OPM, said this week that only 5% to 6% of federal enrollees change plans during open season, adding that she wished the percentage was higher. She admitted that switching can be a daunting task, and people enrolled in plans currently accepted by their doctors may be reluctant to change. Others are put off by the confusing jargon in the health insurance world.

Two health plans will no longer participate in FEHBP in 2020: MVP Health Care, which covers 3,200 employees and more than 4,000 retirees in New York; and Highmark Choice Co. (also known as Keystone Health Plan West), which  covers 718 employees and 323 retirees in Pennsylvania. Enrollees in these plans will have to select a new plan during open season. Otherwise, they will be automatically enrolled in the lowest-cost nationwide plan option, which for 2020 is GEHA Elevate.

Blue Cross/Blue Shield’s standard option remains the most popular FEHBP plan with retirees, with more than 930,000 retiree enrollments as of March 2018. But it’s also one of the most expensive. Blue Cross/Blue Shield’s basic option was most popular among current employees, with 807,000 enrollments.

Some plans will significantly increase premiums in most areas in 2020. They include:

  • Rural Carrier Benefit Plan
  • Aetna HealthFund Value Plan
  • Aetna HealthFund High Deductible Health Plan
  • Aetna HealthFund Consumer Driven Health Plan (in some areas)
  • Aetna Open Access High Option Plan
  • Health Net of California High and Standard Option Plans (in some areas)
  • Humana Health Plan Basic, Standard and High Option Plans
  • Humana CoverageFirst Value and Consumer Driven Health Plans
  • Humana Medical Plan High and Standard Option Plans
  • Humana Employers Health Plan of Georgia Basic, Standard, and High Option Plans
  • District of Columbia M.D. IPA
  • Hawaii Aetna HealthFund Value Plan

Some plans will be reducing premiums in 2020:

  • APWU High Option
  • GEHA High Option
  • MHBP Standard and Value Options
  • SAMBA High and Standard Options
  • Aetna HealthFund Consumer Driven Plan (in some areas)
  • United Healthcare Insurance Company High Deductible Health Plan
  • Health Net of California Basic Plan
  • Aetna Open Access Basic and High Option Plans (in some areas)

As open season nears, we’ll look in more depth at how you can assess your options. If you are close to retiring and need some assistance, we can help guide and direct you as well.

For example, when John and Liz were retiring and they saw the prices of health insurance, it was better for them to let the Federal Health plan go and they chose Medicare and Medicare Supplement which saved them about $238 per month, and still had Zero out of pocket, no more copays.  If you would like your Free Retirement Review or just have simple questions, please Contact Us now for assistance.

Thousands of IRS Employees Are Working Outside Jobs That Risk Conflicts of Interest

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The Internal Revenue Service does not sufficiently track whether its employees are taking on outside jobs such as tax preparation that could be in conflict with their government duties, according to an inspector general report.

By examining tax income data from 2016, the Treasury Inspector General for Tax Administration identified “167 employees who were potentially engaged in a prohibited employment activity and did not have an approved request” to do so, and “2,196 employees with outside employment activity who hold IRS positions that have a high risk of an actual or perceived conflict of interest as a result of the outside employment but did not have an approved outside employment request.”

The employees in question worked in accounting, bookkeeping, taxation, and legal and financial services in their outside jobs, according to the report dated Sept. 25. These jobs are potential conflicts of interest because IRS employees “have knowledge of the IRS’s internal processes and dollar value thresholds that can be used to benefit another employer,” the report stated. “Employees who have an actual or perceived conflict of interest can compromise the integrity of tax administration and erode public confidence that the IRS administers the nation’s tax laws fairly and equitably.”

The IG noted specifically that five employees earned income from the tax preparation service H&R Block and three had active Preparer Tax Identification Numbers that indicate they were paid to do returns.

The inspector general acknowledged the IRS has made some progress following a 2014 report that found more than half of IRS employees in 2011 who reported income from a non-IRS source had not received approval. However, it still “has not established processes to perform regular reviews of the [outside employment tracking system] to ensure its accuracy” and managers have not been reviewing outside employment requests in a timely manner. As of August last year, 9,063 of the 14,155 active requests in the system (64%) were not reviewed in a timely fashion.

Additionally, few employees have been disciplined for outside employment issues. From 2014 to 2018, only 40 employees were disciplined and 13 were suspended or removed from service, according to the report. There were 77,924 IRS employees in 2016, according to agency data.

The inspector general also expressed concerns that the IRS plans to migrate its outside employment tracking system, but was not sure where. “While the [outside employment system] continues to need improvement, it is still a more efficient and effective process than trying to manage the thousands of employee outside employment requests manually,” the inspector general said.

The inspector general made several recommendations on how the IRS can improve its oversight and administration of outside employment tracking. The IRS agreed in full or in part with most, but said “while non-bargaining unit employees are required to submit requests in the [outside employment system],” it disagreed that it can “unilaterally require bargaining unit employees to submit all outside employment requests through the [outside employment system] to review for conflicts of interest,” as the inspector general recommended. Also, agency officials did not agree with the recommendation to consider amending the Internal Revenue Code to allow the IRS to use tax data to identify employees in prohibited outside employment because the IRS general counsel has advised against it.

Feds Will Pay 5.6 Percent More Toward Health Care Premiums Next Year

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Federal employees will pay an average of 5.6% more for their health insurance premiums in 2020, a dramatic uptick from the historically low increase workers saw this year.
The government’s share of Federal Employees Health Benefits Program premiums will rise by 3.2%, the Office of Personnel Management announced on Wednesday, and the government will cover an average of 70% of each enrollee’s total premium costs. While the enrollee share of the rates increased just 1.5% in 2019, they jumped by 6.1% in 2018. About 8.2 million former and current federal employees, and their family members, are currently enrolled in FEHBP.
Non-postal federal workers will pay an average of $8.74 more per paycheck for their insurance in 2020. Those in “self-only” coverage will pay $4.72 more per paycheck, while those with family plans will see an average increase of $14.20.
U.S. Postal Service employees will pay an average of $10.31 more for their premiums, with exact increases dependent on their plan.
Laurie Bodenheimer, OPM’s acting director of health care and insurance, noted that the exact amount federal employees end up paying will depend on the plans for which they sign up. While the average premium was predicted to increase by 1.5% in 2019, employees ended up paying just 0.42% more on average, based on the plans they actually chose.
OPM added two new plans for employees nationwide, as well as 16 new options in local areas, as a result of its offering an indemnity benefit plan for the first time in 30 years. Those “fee-for-service” plans allow enrollees to go to virtually any health care provider and receive reimbursement for a set percentage of their costs. After a competitive bidding process, GEHA won the opportunity to provide the indemnity plans.
Bodenheimer conceded that “at this point in time” the indemnity benefit plans are not different from existing fee-for-service plans. Having an additional carrier to offer nationwide plans, she added, is itself a significant upgrade.
Officials said the sharper increase for 2020 rates was a result of Congress reinstituting the Health Insurance Provider’s Fee, which it waived last year. The fee was created as part of the Affordable Care Act to help fund state exchanges and is paid for by insurance companies. Officials also pointed to rising drug costs as contributing to the overall rate increases.
“Today’s announcement is the culmination of a yearlong effort,” OPM Director Dale Cabaniss said. “Our employees have worked tirelessly on behalf of all feds to secure them world-class healthcare and give them the knowledge to make informed decisions for their families.”
American Federation of Government Employees National President J. David Cox criticized OPM for failing to further rein in the growth of costs.
“The Trump administration has failed to do its job of providing affordable health insurance to its workforce,” Cox said. “Shifting more health-care costs onto federal workers and retirees will force growing numbers to choose between keeping their health insurance or paying for rent and other costs of daily living.”
All told, OPM will offer 279 health care options to enrollees, an increase of 14 from 2019. Individuals will not have that many options—as available plans vary by region—but every enrollee will be able to choose from 18 nationwide plans. About 5-6% of FEHBP enrollees opt to change their plan each year, a portion OPM believes is too low.
“We wish it was higher,” Bodenheimer said.
About 6,300 enrollees will be forced to sign up for a new plan after two carriers dropped out of the program. If those individuals fail to make a new selection, OPM will automatically enroll them in a GEHA plan.
New features in FEHBP next year will include more benefits for mental health and substance abuse treatment, Bodenheimer said. Plans will offer more services to help enrollees quit smoking, as well as enhanced services for individuals with chronic conditions. OPM has also improved its plan comparison tool, which enrollees will be able to access one week before the Open Season period begins.
Enrollees in the Federal Employees Dental/Vision Program will pay 5.6% more on average for their dental plans, and 1.5% more for vision. Bodenheimer applauded the growth FEDVIP has seen in recent years, including 1 million new enrollees last year driven driven largely by merging it with a previously separate program for retirees.
OPM will run open season, the annual period in which all federal employees and retirees can make changes to their health care enrollments, from Nov. 11 through Dec. 9.

If you need any assistance during this open enrollment or thinking about retirement, please feel free to Contact Us to schedule your Free Retirement Review today!

How a Broken Pay System Forced Postal Supervisors to Take USPS to Court

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The U.S. Postal Service has a serious middle management problem.

In late July, the National Association of Postal Supervisors filed a federal lawsuit against the U.S. Postal Service, challenging its administration of the pay system that covers approximately 50,000 managers and supervisors. It is the first time in nearly 45 years that NAPS, on behalf of the postal managers and supervisors it represents, has sued the Postal Service over pay.
NAPS went to court because the Postal Service has violated the law’s requirement that it pay managers and supervisors a salary comparable to the pay of their private sector counterparts and that it pay them more than the workers they supervise. These managers and supervisors help to assure the prompt and efficient delivery of mail and the reliability of postal operations. Without a “supervisory differential” in pay, the incentive of craft workers to become supervisors is sorely undermined, and without compensation comparable to the private sector, the Postal Service cannot recruit well-qualified supervisors from outside the Service.
NAPS was prompted to file the lawsuit after the Postal Service in May 2019 issued the final terms of its 2016-2019 pay package for all personnel under the Executive and Administrative Schedule (EAS), which covers the nearly 50,000 managers, supervisors and other middle-management employees who are not members of collective bargaining units. The terms of the Postal Service’s pay package were largely the same as it had first proposed in 2017, before more than a year of “consultation” with NAPS’s leaders and before a review by a three-member fact-finding panel convened in 2018 at NAPS’s request by the Federal Mediation and Conciliation Service. The fact-finding panel extensively reviewed the fairness of the Postal Service’s pay system for its managers and supervisors and unanimously found that the so-called “pay-for-performance” system the Postal Service had devised and applied to all postal managers and supervisors is “seriously flawed.”
Instead of accepting the panel’s recommendations, the Postal Service rejected nearly all of them, resulting in NAPS’s executive board voting unanimously to file a lawsuit contesting the Postal Service’s EAS pay policies and practices. In the lawsuit, filed in federal district court in Washington, NAPS also seeks a court ruling directing the Postal Service to recognize NAPS as a rightful representative of postmasters and EAS Headquarters and Area personnel. Unfortunately, the USPS denial of NAPS’s right to represent all EAS and postmasters is part of a continued effort by USPS executives to “divide and conquer” the EAS mid-level management ranks.
In its April 2019 factfinding report, the federal mediation panel unanimously concurred with NAPS on nearly all matters, strongly validating NAPS’s complaints about Postal Service EAS pay policies. The panel found that the Postal Service’s [pay for performance] system is “seriously flawed in that it does not accomplish its objectives or comport with the requirements of the [Postal Reorganization Act].” It also found that the Postal Service does not properly calculate the supervisory pay differential, which “has resulted in many thousands of Field EAS managers and supervisors receiving less than the Service’s own 5% target differential.” And it found that “the [pay for performance] program negatively impacts the Service’s ability to attract and retain qualified and capable supervisory and managerial personnel and fails to promote the maintenance of a well-motivated workforce.”
Experts in human resources continually stress the importance of worker engagement. Engaged workers create a positive impact on the bottom line of the enterprise, improving customer service, reducing absenteeism, and lowering accidents. The Postal Service has declined to put those principles into action, or even to become alarmed that its own Pulse Survey of the USPS workforce, conducted by Gallup, placed its employees in the bottom percentile of engaged workers in the nation. The Postal Service has taken no meaningful action despite the Gallup survey finding for the past several years that 99% of other large American companies have better employee engagement.
Postal managers and supervisors have grown increasingly frustrated over their pay and the lack of respect given by USPS executives to their role within the organization. At NAPS’s biennial national convention in August 2018, delegate frustration boiled over about the EAS PFP system that has produced years of paltry annual pay increases, including no pay raises for any EAS personnel in 2011 and 2012 and no pay raises for thousands of EAS personnel in 2015, 2017, and 2018. In contrast, all union-covered postal workers receive annual cost-of-living pay adjustments under agreements negotiated with the Postal Service. Further, unlike the rest of the agencies in the federal government, the USPS does not provide area wages or locality pay adjustments to workers in higher-cost areas, such as San Francisco, New York or Washington, D.C.
Now, a federal court will decide whether the panel was correct in finding that the Postal Service has violated—and continues to violate—the law’s requirements.

NEW TSP Withdrawal Process and Forms Up and Working

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Implementing the TSP Modernization Act of 2017 (TSPMA) is easier said than done. The changes to Thrift Savings Plan withdrawals require a multitude of changes to forms, publications, fact sheets and website content. Throughout the lead-up to the change, the TSP has been working in the background to ensure that, on September 15th, all of the “old” information is no longer available and all of the “new” information is ready for TSP participants who are ready to make withdrawals.

In the lead-in to the change, the Thrift Board declared a “dead zone” from September 7 through September 14 where no new withdrawal requests would be accepted. Nevertheless, they left all of the “old” forms and publications up on the website. Beginning on Monday, September 9th, we checked the TSP website every day to see if the new forms and publications had been posted. Finally, when I checked on Monday morning, September 16th, everything had changed and the new forms and publications were available.

You will probably want to go to the TSP website and download or print the new Summary of the Thrift Savings Plan. This publication tells you everything you need to know about the TSP and should be your first source of reference whenever you have a question.

You will no longer find paper withdrawal forms of any type in the forms sub-section of the withdrawals section of the site. There are online forms available for those who want to make a withdrawal or change their current method of withdrawal.

You will have to access your Thrift Savings Plan account and access an online withdrawal tool for withdrawals.

The TSP-99, Withdrawal Request for Separated and Beneficiary Participants will be the place to go for those who are separated and want to start the withdrawal process. You will also find the TSP-75, Age-Based In-Service “59½” Withdrawal Request and the TSP-76, Financial Hardship In-Service Withdrawal Request for in-service withdrawals, along with the TSP-95, Changes to Installment Payments for those who are separated and already taking installment payments from the TSP.  We have already assisted a handful of clients to get the process started.

If you are a FERS participant, whether you are retired or still employed, spousal consent is necessary for almost all actions that deal with withdrawals. You will find yourself answering a lot of questions online and will come to a point where you are directed to print out the appropriate form, fill in any additional needed information and obtain your spouses signed, notarized consent. You will then have to mail or fax the completed form to the Thrift Savings Plan. I went through the steps needed to take a “partial single withdrawal” and the process was easy and intuitive, but will help guide you through this process.

Though the old forms and publications are no longer on the website, no doubt there are hard copies floating around. If you’ll be withdrawing from the TSP in the near future, remember that the withdrawal process must start online; do not use an old paper publication.  If you have any questions, or want to have a retirement review, and let us help advise your best action within your TSP, please schedule your review today.  Contact us today!