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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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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.

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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

By | Benefits, Federal Pay, Retirement, TSP | No Comments

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!