Author: Emily Chambers

9 Republicans Draft Letter To House Leaders Over Federal Retirement Systems Concerns

9 Republicans Draft Letter To House Leaders Over Federal Retirement Systems Concerns


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President Donald Trump’s 2018 economic budget request is facing opposition with at least nine House Republicans due to the major changes he’s seeking for the federal retirement system.


His changes would affect both present and future employees and retirees.


The June 17 letter was signed by Reps. Rob Wittman (R-Va.), Barbara Cornstock (R-Va.), Austin Scott (R-Ga.), Walter Jones (R-N.C.), Tom Cole (R-Okla.), Chris Smith (R-N.J), Rob Bishop (R-Utah) and Frank LoBiondo (R-N.J.) and sent to Majority Leader Kevin McCarthy (R-Calif.) and House Speaker Paul Ryan (R-Wis.).


What Republicans Wrote To House Leaders


In the letter, the nine Republicans wrote they were concerned about the proposal’s breaking of a promise to federal employees and retirees who have developed a career plan on the age-old guarantee of benefit calculations. They said the employees and retirees, as well as their family, shouldn’t be treated in such a manner.


Their opposition letter follows the 100 House Democrats opposition letter that was sent to Minority Leader Nancy Pelosi (D-Calif.) and Ryan.


Republicans are concerned that the budget proposal is aimed solely at the federal workforce and would make it harder to hire and keep the most qualified. Trump’s 2018 economic budget would impact federal retirement in four ways:


  • Force employee’s to contribute 1% more every year for six years, equating to a 6% increase.
  • Abolish the cost-of-living adjustment (COLA) for present and impending Federal Employee Retirement system and reduce Civil Service Retirement System participants COLA by 0.5%.
  • Remove supplemental payments to employees retiring before the age of 62.
  • Base future retirement benefits on an average of the highest five years of salary, rather than three-years.


The Trump administration said these changes would lead to a cost savings of over $4.1 billion for 2018 and $149 billion for the next ten years. It would also ensure the private sector and federal retirement package are similar.


According to the nine Republicans, the budget proposals are nothing new. The letter states that recycling these proposals is both disruptive and demoralizing to the middle-class working in the federal government.


However, Democrats feel the Republicans’ letter is not enough. House Democrats have been extremely transparent about any language that leads to changes with the federal retirement and have urged Pelosi and Ryan not to permit any proposal that would have a negative impact. Republicans said they were just voicing their concerns about the changes.


However, Republicans have agreed on a number of arguments Democrats and federal employees unions have brought forth that have led to savings of $182 billion since 2010. These arguments include:


  • Three years of pay freezes for federal employees
  • Increase in retirement contributions


Republicans said they know what kind of deficit the country faces and doesn’t need to be reminded of it. However, it’s the federal employees that are being targeted, and they have repeatedly been subjected to changes.


According to the National Treasury Employees Unions, they were happy to see Republicans make their dissent known about the retirement proposals.


Tony Reardon, NTEU National President, said the organization was pleased with those House members for publicly standing up for federal employees in the nation – ones that are tired of being affected by the deficit crisis. He said the letter makes the House leadership aware that efforts to cut or abolish federal salaries and retirement would have significant resistance.




Best Dates to Retire for CSRS and FERS Employees 2017, and 2018

Best Dates to Retire

Before we begin our discussion, let’s try to understand some important rules and issues concerning FERS, CSRS, and CSRS Offset employees. To start, lets make the confusion regarding “Trans” FERS employees. “Trans” FERS employees are who have served at least five years under the CSRS and who voluntarily took transfers to FERS. Most of such employees volunteered for assignments during the two FERS “open seasons” i.e. in 1988 and during the latter half of 1998. Such employees are subjected to FERS rules vis-à-vis retirement eligibility and are also eligible to receive two annuities, one based on the number of years served under CSRS and the other depending on the number of years served under FERS.

Effective date of retirement and issuance of the first annuity check

An important point to note here is that the “date of retirement” and the “effective date of retirement” are not the same. Another important aspect to note is that the date of issuance of the first annuity check will depend upon the date of retirement. According to the CSRS rules, if a CSRS employee (including the Offset CSRS employees) retires on the first, second, or third day of the month then his/her retirement becomes effective from the very next day. Let us understand this with the help of an example. Suppose a CSRS employee retires on 3rd of January, now, in this case, his/her effective date of retirement will be 4th of January. In this case, the date of issuance of the first annuity check will be 1st February. But this is not the only rule. According to another rule, regarding the employees who retire in the last four days of a month, the effective date of retirement will be the first of the next month, and the date of issuance of the annuity check will be the first of the month after that. Again, let’s take an example of an employee who retires on 27th January. Now, in this case, the effective date of retirement will be 1st of February, and the date of issuance of the first annuity check will be 1st of March.

Rules regarding the FERS employees, including “Trans” FERS employees, determining the effective date of retirement and the date of issuance of the first annuity check are different. In the case of FERS employees, there are no separate provisions determining the effective date of retirement as we saw in the case of CSRS employees. Accordingly, irrespective of the date on which an FERS/”Trans” FERS employee retires, the effective date of retirement will be established as the first of the next month, and the date of issuance of the first federal annuity check will be the first of the month after that. Let’s understand this with a classical example. Assuming that an FERS/”Trans” FERS employee retires on January 1st then the effective date of retirement will be 1st of February and the date of issuance of annuity check would be 1st of March. But what if he/she retires on 31st of January? In this case, too, the effective date of retirement would come out to be 1st of February, and the date of issuance of the first annuity check would also remain 1st of March.

Treatment of unused annual leave when retiring

All retiring employees are paid in lump sum for their unused annual leaves. This lump sum payment is credited to the same bank account of the retiring employee in which regular paychecks are credited. In most of the cases, this payment is made within 10 to 40 days of the date of retirement.

As we saw in the above discussion, in some cases, once the employee has retired, it can take as long as two months for the first annuity check to arrive. Hence, it becomes important for the agencies to speed up the process of payment for the unused annual leave hours. There is no denying the fact that a retired employee will have to some bills in between the dates of his/her retirement and issuance of the first annuity check. The lump sum payment for the unused annual leave hours can be used to meet any unforeseen or immediate expenditures during this period.

Now let’s come to the point of accruing the full amount of annual leave hours for the last pay period. It should be noted here that an employee must be in “employee status” for his/her entire last pay period of work to be eligible for this. For example, if an employee happens to retire even a day before the official end of the pay period, then he/she won’t be eligible for accruing the payment of annual leave hours for the last pay period.

A lot of employees enquire about the best day of the pay period to retire so that they can accrue the benefits of unused annual leave hours for the last pay period too. The answer in most of the cases, where employees work from Monday to Friday on a bi-weekly payroll schedule, is second Saturday of the pay period. This holds true in most of the cases, but there are two expectations. The first exception is for employees working on an Alternate Working Schedule (AWS). In this case, if an employee can retire on the second Friday of the pay period and still accrue the unused annual leave hours for the last pay period. The second exception is for those employees who plan to retire before the beginning of the new leave year i.e. retiring at the end of the ongoing leave year. Some employees plan this so that they can receive their first annuity check on February 1st. There is a huge benefit in doing so. An employee who retires at the end of the leave year effectively maximizes the carryover from the previous leave year of 240 hours in addition to not using any annual leave in the current year. Such employees get paid for as much as 448 hours of unused annual leave hours. If you too plan to retire in such a way, then the best date for retirement would be – Jan 3 for CSRS/CSRS Offset Employees and Dec 31 for FERS/”TRANS” FERS Employees.

A major point to be kept in mind is that most of the agencies don’t allow more than 240 hours of unused annual leave hours to be carried over into the new leave year. This is also known as “the use or lose policy.”

As we have discussed all the major points, let’s take a look at the following table, which shows some of the best dates for retirement for CSRS/CSRS Offset and FERS/”Trans” FERS employees during 2017 and 2018. In the next section, we have also mentioned the guidelines that were kept in mind while formulating this table.

Except for Dec. 31, 2017, Jan. 3, 2018 and Dec. 31, 2018, the dates are the official end of a pay period (the second Saturday of the pay period).
For CSRS and CSRS Offset employees, the best day to retirement is within the last three days of the calendar month or the first three days of the next month. For FERS employees (including ”Trans” FERS), the day of the month is within the last three days of the month.
The main reason of CSRS/CSRS Offset and FERS/”Trans” FERS employees wanting to retire either within the first three days of the month or during the last four days of the month is simple i.e. to receive the first annuity check as soon as possible (within four to 5 weeks).

The dates shown in the table below were determined based on OPM’s 2017 and 2018 leave year calendars used by most federal agencies.


Calendar Year

Leave Year: Beginning Date to Ending Date Best Dates to Retire

CSRS/CSRS Offset Employees

Best Dates to Retire

FERS/”Trans” FERS Employees

2017 1/8/2017 to 1/6/2018

(26 pay periods)

Jan. 3, Apr. 1, Apr. 29, Sept. 2, Sept. 30 and Oct. 28 Apr. 29, Sept. 30,

Oct. 28 and Dec. 31

2018 1/7/2018 to 1/5/2019

(26 pay periods)

Jan. 3, Feb. 3, Mar. 3, Mar. 31, Apr. 28,  Sept. 1 and Sept. 29 Mar. 31, Apr. 28,     Sept. 29 and Dec. 31



3 Worst States for Taxes Everyone Should Know Before Retirement

When a person nears retirement, he or she often starts hunting up the best places to retire. The most common criterion for choosing a place is the tax laws of the state. If the taxes are more, a person usually avoids that state and seeks a place where the taxes are lower. Kiplinger recently prepared a list of top 50 places to retire in the U.S. Here the worst three states are mentioned.

TaxesWhere not to live after Retirement?

The study done by Kiplinger recently has created a list of all the 50 states in order of their preference that would be preferred by a retiree. The tax laws of all the states played a key role in assigning them a position in the list. States that have lower taxes gained a better position and states that have higher taxes were low on the list. The worst states for retirement are New York, New Jersey, and California. Another key factor that was used rank states are the health care facilities. Some other factors like the cost of living were also used.

The Last Option

The worst state to retire according to the Kiplinger list is New York as the living expenses are 29 percent above the national average. A sad fact is that the state is so expensive, the percentage of residents over the age of 65 and living in poverty is above average.

The Second Last Option

The runner-up is the state of New Jersey where the tax policies are tough on the retirees. The state sales tax is 7 percent and the local property taxes are also too high. When one combines the local tax and state tax burden, the result is second highest in the country.

The Third Last Option

The 3rd worst state for retirement is California. The state has expensive housing and the taxes are enough to put a dent in the retirement nest egg of a person. Most parts of the retirement income of a person are taxable. The income tax rates of the state are highest in the country.


It seems that the people who are nearing retirement would be smart to stay away from these three places when they are looking for a new home and new beginnings. After all, what’s the benefit of moving into a new place when one has to pay so many taxes?

Wyoming May Offer Early Retirement to State and UW Employees

A report says that Wyoming may offer early retirement to state and UW employees. This step would be taken to save money in the face of a huge budget shortfall. The step of early retirement will only be feasible if the lawmakers get a bill passed. The employee group of the state has not taken a stand in this regard yet. Though early retirement would be more costly to the state initially, it will save money in the long run.

Retirement Benefits

Bill Verifies the News that Wyoming May Offer Early Retirement to State and UW Employees

Wyoming may offer early retirement to state and UW employees. This speculation was confirmed with the proposal of a bill, Senate File 95 that is sponsored by ten lawyers is passed. This bill was introduced as the result of the efforts of the state leaders to save money. The state is already facing a huge budget shortfall.

The Eligible People

If the report that says Wyoming may offer early retirement to state and UW employees turns to be a fact, about 2,000 employees would qualify for an early retirement as per SF 95. The qualified workers are calculated on the basis of a formula that considers their years of service and age, says the primary sponsor of the legislation, Sen. Curt Meier, R-LaGrange. It is pertinent to add here that in total about 8,000 people work for the State of Wyoming and 3,000 employees work at the University of Wyoming.

The Shortfall

Wyoming may offer early retirement to state and UW employees because the lawmakers are struggling with a shortfall of about $400 million in the current budget cycle of two years and $3 billion. It is despite the fact that the Gov. Matt initiated $250 million cuts last summer which leave the Wyoming Legislature with about $150 million to use savings to fill or cut.

The Reductions

Wyoming may offer early retirement to state and UW employees because the lawmakers don’t wish to offer pink slips to the employees. Meier stated that he doesn’t want to give pink slips to people and if reductions are needed the executive branch should have some options.

The Plan

Wyoming may offer early retirement to state and UW employees if SF 95 becomes a law. If it becomes a law, it will come into effect on an immediate basis. After that, the employees could notify the Wyoming Retirement System and their employers and leave a job as soon as April 1, 2017. They can retire through June 30, 2019.

Long Term Savings

Offering early retirement to state and UW employees may cost some upfront money to the state but the amount of money the state would save over the long term is more, says Meier. The state would need to pay sick time and unused vacation time to the employees. The employees who are aged 61 or older would be given a bonus of three months as their salaries and the state would make the monthly payments of about 20 percent of the salary of the employee until the employee reached 62 years of age. The latter would be done for a few UW or state employees only. The state would also be responsible for making monthly health insurance payments until a retiree turns 65 years of age.

The Liabilities

In the fiscal that commences on June 1, 2017, the state would have to pay out an estimated $41 million to the retirees. It will have to pay about $34.4 million over the next two years. But since the number of salaries that need to be paid will be lesser, the nonpartisan legislative staff has around $56 million in savings for the year that begins on June 1, 2017. Around $108 million will be saved over the next two years.

The Filing of the Bill

SF-95, the bill that gave birth to the speculation that Wyoming may offer early retirement to state and UW employees was filed and made public a few days back.

No Reaction Yet

Interestingly, The Wyoming Public Employees Association, a group representing the state employees has not taken a stand on the new legislation that raised the speculations that Wyoming may offer early retirement to state and UW employees. The Executive Director of The Wyoming Public Employees Association, Betty Jo Beardsley stated that the group has yet to decide a position on this legislation.

Early Retirement for University of Wyoming Employees

Chris Boswell who serves as the Vice President of the University of Wyoming stated that the school is currently putting together an early retirement program for the faculty that will most probably be launched in this spring. This step is taken in order to save some money. He also mentioned that the University would be interested to see how this bill might merge with the existing early separation incentives of UW that are underway at the moment.

The Biggest Side Effect of the Bill

Meier says that the biggest side effect of the fact that Wyoming may offer early retirement to state and UW employees is that the state and University will have to face a brain drain as some of the skilled employees might leave and never come back.

Agencies Relying on only a few Hiring Authorities for the Recruitment of Federal Employees

The federal agencies are not taking help of many hiring authorities available to it. They are hiring federal employees by making use of only a few authorities. The agencies are mostly using competitive examining authority. They are not even mapping the performance of any hiring authorities. All these factors were highlighted by GAO.

federal employeesThe report on Federal Employees Hiring Process

The report that states that federal agencies are depending on only a few hiring authorities to fill the positions by hiring federal employees was created by the Government Accountability Office. It pointed out that the agencies used only 20 out of 105 options available to them for hiring 90 percent of the workforce in 2014. The numbers of people hired at that time were 178,000.

The report also exposed the fact that the agencies used 85 different hiring codes to fill only 18,000 positions at that time. The major reason behind the highlighted trend is that the agencies are confused by too many options.

Less Data Usage

GAO also stated that the agencies and OPM are not using the data that needs to be used to measure which of the hiring authorities are working the best. This data also needs to be used to determine whether the codes are working as per the intentions of the makers or not.

What is Hiring Authority?

For people who have no idea what hiring authority is, it is an executive order, a law or a regulation that lets the agencies recruit a person into federal service. They also describe the eligibility of a person, the duration on which the position should stay open and what rules must be followed by agencies while confirming a new hire.

The Maximum Usage

Federal agencies used the competitive examining authority on most occasions. They post the vacancy to and then rank the applicants before using a category rating to find a new hire.

The Three Agencies

GAO spoke with three agencies on the matter. These are the Air Force Materiel Command, National Institutes of Health and the Energy Department.

The Surveys

Agencies need to collect and report the time-to-hire information as well as satisfaction surveys for all the positions they posted on the USAJobs website. OPM and the aforementioned 3 agencies admitted that they didn’t use this data to study how well all the hiring authorities are working.

The Lost Opportunities

GAO also mentioned that by not measuring and evaluating the required data, the agencies and OPM are missing the opportunities to enhance the hiring process for recruiting the federal employees.

Increased Retirement Benefits Savings Lead to Lower Medicaid Spending

A new study has revealed the fact that increased retirement benefits savings lead to lower Medicaid spending. If a state is offering assistance to employees in boosting their retirement savings, it is indirectly contributing towards reducing the Medicaid spending. The study included several assumptions. Though it’s a fact that many states are offering programs to boost the retirement benefits savings, experts say that the other states should also consider initiating such programs by doing a cost-benefit analysis.

Retirement Benefits

Study Says Increased Retirement Benefits Savings Lead to Lower Medical Spending

The study that says increased retirement benefits savings lead to lower Medicaid spending was conducted by Segal Consulting. It carried out a review of all 50 states and the District of Columbia to get estimates on the impact of expanded retirement benefits savings by individuals who are not a member of any retirement plan on the future Medicaid expenditures.

The Result of the Study

The analysis performed by Segal Consulting shows that there is a positive correlation between increased retirement savings and reduced Medicaid spending as more retirement savings remove a percentage of the currently vulnerable households from poverty rolls at the time they retire. The study also highlighted that every state saw an estimated reduction in the Medicaid expenses of the state that were a result of increased retirement benefits savings especially in the first 10 years of the plan.

The Money

The study that highlights increased retirement benefits savings lead to lower Medicaid spending also offered some startling figures. It found out that fifteen states would succeed in saving more than $100 million each and the total projected savings were around $5 billion. The amount of savings ranged from $11 million in Mississippi to $604 million in California. It is pertinent to add here that California recently became the eighth state that had enacted a retirement program for the private sector workers.

Key Assumptions

The study that found out increased retirement benefits savings lead to lower Medicaid spending was able to get the said results on the basis of the assumption that the programs would incur savings that start at 1 percent per year reduction in spending for workers who are currently 64 years old or older than that, grading up to 5 percent for the ones who were currently aged 60. The researchers did not assume that the Medicaid access would be eliminated. Instead, they mentioned that it would be delayed.

With these kinds of assumptions, it is not a surprise that the researchers described the impact over time as exponential.   The researchers also noted that they did not take into account the different state eligibility nuances for Medicaid eligibility.

Segal as a Consultant for States Considering a State Retirement Plan

The paper that says increased retirement benefits savings lead to lower Medicaid spending was something of a promotion for the firm’s eligibility to serve as a Consultant to states that are considering the option of establishing a state-run retirement program. Segal Consulting can also help these states in creating as well as executing an RFP for providing the said services.

The Flaw

A flaw in the report that said increased retirement benefits savings lead to lower Medicaid spending is that it did not mention the fact that the same benefits (likely more than those) could be reaped by ensuring the expansion of retirement coverage generally through the existent employment-based savings system.

Already Enacted Programs

There are several states that have already enacted similar programs. It includes Oregon, Massachusetts, Illinois, Maryland, and Connecticut. Similarly, New Jersey and Washington State have launched small plan marketplaces to help people start saving more for retirement. It is also a known fact that around half of the states in the US are considering measures that will close the retirement coverage gap. Unfortunately, none of these programs have become operational till date. Only Oregon has made some progress as it has pledged to open the program for enrollment by July this year.

Opinion of an Expert

Cathie Eitelberg, who currently serves as the Senior Vice President and the Director of Public Sector Consulting at Segal, has expressed her opinion on the results of the study that mentions increased retirement benefits savings lead to lower Medicaid spending. She stated that the study clearly shows that the states could realize meaningful savings on the Medicaid spending when a good retirement savings plan is available to all the private sector workers.

She also added that a majority of jurisdictions still need to consider this option. It’s time that they should at least start evaluating the feasibility of such a program from a cost/benefit perspective.


We also agree that if it has been proved that increased retirement benefits savings lead to lower Medicaid spending, all the state governments need to start considering the launch of a state-run retirement benefits savings plan soon.

Donald Trump Supports Changing Federal Employees’ Retirement and Health Benefits

The new US President Donald Trump has supported the move of changing federal employees’ retirement and health benefits. Apart from announcing a hiring freeze, the government also wants to boost the attrition rate in federal agencies. It also hopes to offer only plans like 401(k) to all the federal workers by cutting down on retirement and health benefits that are seemingly more than what should be offered to a federal worker.

federal employees

Federal Employees Retirement and Health Benefits are Unsustainable for the Government

Sean Spier, the White House Press Secretary recently stated that the federal employees’ retirement and health benefits are based on antiquated assumptions and need a level of generosity that has been long abandoned by most companies in the private sector. He added that those costs are now unsustainable for the federal government as well as the state and local governments that are offering similar retirement and health packages.

These statements regarding federal employees’ retirement and health benefits were made while announcing the much-talked-about governmentwide hiring freeze.

The Top Priority

It is pertinent to add here that the administration’s criticism of the federal employees’ compensation package comes after when Republicans in Congress highlighted the issue as the most vital priority for legislative reform in the 115th congress.

Why was the Hiring Freeze Vital?

The federal government has also mentioned the reasons that made the hiring freeze a necessity. The freeze was a necessity as it was a key step to controlling the costs related to the federal workers. Spicer mentioned that the executive branch civilian employment rose by 17 percent from 2000 to 2014.

While looking at the larger picture, it is clear that the federal employment is smaller than it was in most years since the year 1966. The latter years of Clinton administration brought upon a rare period in which the civilian and non-postal employment sunk below 2 million. The civilian federal employment remains at its smallest rate across the entire executive branch. The smallest rate is lower than the level reached at virtually any point in the last 50 years.

A Long Term Plan

Apart from announcing a hiring freeze and aiming to reduce federal employees’ retirement and health benefits, the Trump government has ordered the Directors of the Office of Personnel Management (OPM) and the Office of Management and Budget (OMB) to come up with a plan to cut the federal workers through attrition. The plan should be presented till April 22, 2017.

The Reforms

It is being assumed that the decreases in the benefits of federal employees would most probably come through the congress. Jason Chaffetz, the Chairman of House Oversight and Government Reform has promised sweeping reforms in this area too.

Defined Contribution Benefits Only

Chaffetz also stated that his committee will push to move new federal hires to a defined contribution benefit like the Thrift Savings Plan. He added that he still needed to decide whether those employees would receive a generous government contribution towards the 401(k) in order to make up for the lost pension or not. He assured that the agencies would offer a healthy match to such a plan.

He also highlighted that he would protect the employees who are already vested in the pensions by saying that he did not want to unduly scare the employees who are already on the job since some years. He pointed out that it would be difficult to go after the existing federal employees’ retirement and health benefits.

More Attrition

Chaffetz also mentioned that his committee is considering ways to reduce the size of the federal workforce. Republicans are seeking legislation that would require two or three federal employees to leave before the federal agencies could be allowed to hire one new worker. He vowed to avoid the fallacy of the past according to which the reductions in the federal workforce simply led to more of contracted work. He concluded by saying that there are a lot of good quality workers but there are too many of them.


It is clear that the new administration not only wants to reduce hiring of new federal workers, it is also aiming to reduce federal employees’ retirement and health benefits so that the government could get rid of the liabilities that are increasing day by day. The government is also hoping to initiate a planned attrition of the feds to reduce their growing numbers. It would be interesting to see how feds and the federal unions would respond to the proposed changes and whether the government would be able to implement the said changes smoothly or not. Right now, all one can do is to wait and watch while the new administration tries hard to change the existing systems in a bid to reduce the number of feds and the costs associated with taking care of them.

Diminished Capacity Makes Retirement Benefits Planning Harder: Study

A recent survey has highlighted that the biggest concern of the retirees after 10 years into retirement was dementia or diminished capacity. People are concerned about the financial implications of their health and it is being stressed upon that the CPA financial planners should make sure that the financial fears of a person are addressed and retirement benefits planning is done smoothly before this disease takes total control of a person’s mind and leaves the person and his/her family devastated.

retirement planning

How People are Reacting to the problem of Diminished Capacity and Retirement Benefits Planning

The survey was organized by the American Institute of CPAs and it asked some questions from the CPAs regarding their clients’ attitude towards retirement benefits planning and dementia or diminished capacity. The survey stated that only 18 percent of clients are taking steps to address the problem while 35 percent are still weighing the problem. Half of the CPAs who were interviewed admitted that their clients have shown signs of diminished capacity or dementia in the last year.

The vital survey further revealed that one-third of the respondents feel that their clients have chosen to deal with dementia on a reactionary basis and about 13 percent are ignoring the problem. This makes it difficult for the CPAs to create a solid financial plan for the future years of the retiree.

How CPAs are Helping?

The survey highlighted that the financial planners are playing an active role in dealing with diminished capacity or dementia. About 85 percent are doing it by ensuring that all the health care proxies and powers of attorneys were in place. About 61 percent have made arrangements so that they can make contact with the professionals and relatives of the clients.

About 44 percent of the CPAs have got the authorization to contact the client’s attorney when needed while 35 percent have moved the money to a trust. About 34 percent have also automated the annual required minimum distributions needed by a client from their eligible retirement accounts. Around 18 percent have admitted that they had their clients move into an assisted care facility that was previously discussed with the clients.

Good Going

It seems that a number of CPAs are doing a good job of ensuring that their clients have access to retirement benefits and other facilities even after dementia or diminished capacity becomes a major issue for the clients. To help further, the members of the PFP Executive Committee have even developed a Diminished Mental Capacity Checklist that can assist too.

Federal Employees Benefit from OPM’s Guidance on Telework

As per a recent report, the federal employees benefit from OPM’s guidance on telework as it clears the air on how to do the job from the home while taking care of an adult or child who is dependant. It mentions that though an employee can leave the work in emergencies, in most situations, the focus should be on the work, not the dependent. The managers were told to be more accountable in keeping track of the performance of a teleworking employee.

federal employees

How Federal Employees Benefit from OPM’s Guidance on Telework?

Federal employees benefit from OPM’s guidance on telework seeing as the guidance makes it clear how to maintain a work-life balance while working from home. The guidance mentions that though the presence of dependents shouldn’t be an absolute bar to teleworking, the employees should not do dependent care duties while performing official duties. The interruptions are allowed as long as they are minimal and don’t hamper the work accomplishments.

Make Arrangements

The federal employees benefit from OPM’s guidance on telework because they were told that they should arrange for dependent care similar to the time when they were working in an office so that they don’t end up doing telework with the core aim of meeting their dependent care responsibilities while giving some time to official duties. Official duties should be the center of it all, not caring for a dependent.

Scheduled Breaks

Federal employees benefit from OPM’s guidance on telework given that the feds were told to have an understanding with the managers regarding the breaks too. They can take care of the dependent during regular breaks like a lunch break. If that is not possible then they can take a leave just to take care of the dependent by seeking permission from the direct supervisors or managers.

Open Communication

Federal employees benefit from OPM’s guidance on telework for the reason that OPM stresses on the need for a dialogue between the manager and an employee so that the expectations and work output during home telework schedule could be established while keeping in mind the level of dependency of the people in the employee’s household.

Managers must be accountable and give equal work to teleworking employees and the non-teleworking employees. They should also keep the communication open and seek the feedback of the teleworking employees especially with regard to the performance expectations.

Eligibility and Participation

Federal employees benefit from OPM’s guidance on telework as the agency has clearly mentioned that the management decisions regarding telework participation and eligibility should focus on accountability measurement principles and effective performance management. The former are listed in the employee’s performance plan.

USPS is becoming more Tech-Friendly

When one looks at the recent updates shared by the USPS, it is evident that USPS is becoming more tech-friendly. It is not only helping the clients to better scan the mail & packages they receive or send, it allows them to track their location as well. It is also improving its transportation schedules with the help of technology so that they can be enhanced further. It is clear that all these efforts would make the service provider more efficient and user-friendly.

postal service usps

How USPS is becoming more Tech-Friendly?

The first thing that indicates that USPS is becoming more tech-friendly is the fact that it recently expanded the Surface Visibility or SV program to 114 sites more. This brings the total number of SV sites across the nation to 437.  This program is a part of the broader efforts of the postal service to better use the technology and promote the SV application that enhances scanning and makes it easier for all the business clients to know the whereabouts of their packages and mails.

More Success

USPS has also closed the visibility gaps a bit more by expanding the SV scanning capabilities to five contracted sites and 65 peak annexes. It has provided these locations with a more flexible technology that makes use of the cellular network.

Transportation Updates

Another thing that solidifies the fact that USPS is becoming more tech-friendly is that the postal service has now developed SVWeb which is a site dedicated to the SV program. It will replace the older TIMESWeb.

For those people who have no idea what SVWeb is, it is an SV program that offers real-time transportation updates on the movement of all the trailers that are a part of the surface network. The data captured is utilized to identify all the trips that are on-time, early, canceled or late. The core aim of capturing the data and then tracking the trips is to ensure that the transportation schedules could be made more efficient in the future.


It is clear that the news that states USPS is becoming more tech-friendly is beneficial to all the people who make use of this service as improved processes saves time for them. Use of technology to track the movements of trips also allows the clients to know exactly when the package or mail will get to their location and they won’t have to keep wondering about it.

Small Businesses in New York Want State-Sponsored Retirement Plans for the Employees

A study has revealed that small businesses in New York want state-sponsored retirement plans for the employees. They want the state governments to provide the plans because they cannot do it by themselves as it’s beyond their budget.  Experts say that when the states auto-enroll the workers in the plan the participation in the plans would increase which would offer better retirement security.


Study Says Small Businesses in New York Want State-Sponsored Retirement Plans for the Employees

The study that says small businesses in New York want state-sponsored retirement plans for the employees was organized by AARP New York. The study was conducted via telephonic interviews with about 450 small business owners.  Beth Finkel who serves as the state director for AARP New York stated that the organization went out and asked the employers how they felt about offering an auto-enrolled retirement plan to workers.

The Result

The result of the study is that about two-thirds of the small business owners in New York are in favor of the state setting up a privately managed retirement savings plan for their employees. They want this because they cannot afford to provide a plan on their small budgets.

The Request

It is a fact that a lot of organizations are urging the governor, Andrew Cuomo to introduce a workplace retirement savings option that would be administered by the state as a component of the 2017-2018 state budget proposal which will be initiated next month. AARP is one of the organizations pushing for this change so that the employers can get help in alleviating the costs associated with providing a retirement plan to employees.

The Facts

Finkel also mentioned that people would be about 15 percent more likely to save for retirement if it is deducted from their paycheck automatically. This is the reason on why this is important for the organization. He also exposed the fact that about 3.5 million workers in the New York are expected to be ill-prepared for retirement and over half of the private-sector employees in the state do not have access to a 401(k) plan at work. It includes 67 percent of Hispanic people and 60 percent of Millennials.

Offering Help

Finkel says that those people won’t be able to afford retirement until the state understands that small businesses in New York want state-sponsored retirement plans for the employees and creates one. If the state doesn’t create a plan, these workers may have to work until they drop.

Muscle Shoals has Allowed Employees to Convert Sick Leave for Retirement

In a new development, the city of  Muscle Shoals has allowed employees to convert sick leave for retirement by allowing unused sick leave days to be used as service time. It was done to ensure that the city can attract and retain quality talent. It will also help employees who fail to meet the requirements of the retirement quota. The policy came into effect immediately.


Why Muscle Shoals has Allowed Employees to Convert Sick Leave for Retirement

Mayor David Bradford thinks that Muscle Shoals has allowed employees to turn unused sick leave to service time at retirement because the program will allow the city to find and retain quality talent. He also said that it’s just one more thing that the city can offer to someone who works for it. It’s an added benefit for the employees.

It is a part of the Retirement Systems of Alabama to let cities opt for an established conversion program that allows the employees to turn sick leaves into the retirement service credit. Earlier, Muscle Shoals paid the retirees for up to 640 hours which is equal to 80 days of sick leaves that were unused. That option is still open.

No Limits

Another thing that must be noted with regard to the fact that Muscle Shoals City has allowed employees to turn unused sick leave to service time at retirement is that there is no limit on how much accrued sick leave can be converted into the retirement service credit. An employee who can save 351 to 370 sick leaves could convert it to 18 service credit months. These months would be added to the actual service time of the employees while calculating the retirement benefits.

Helping Employees

This change would help those employees who do not meet the set retirement quotas as they can use the retirement service credit earned by sick leave conversion to meet the requirements for retirement.

The Cost

Ricky Williams who serves as the City Clerck said that the city won’t have to pay any cost initially but it would pay up a fee after one year based on the usage.

The Execution

The vital policy that states Muscle Shoals City has allowed employees to turn unused sick leave to service time at retirement goes into effect immediately and applies to all the sick leaves already accrued by employees.

The Incentive

Commenting on the development that Muscle Shoals has allowed employees to turn unused sick leave to service time at retirement, the City Councilman Neal Willis stated that it serves as an incentive for employees to come to work and appreciates them for not sitting out without a reason.

Many Americans Are Withdrawing from a 401(k)

A new study says that many Americas are withdrawing from a 401(k). Though this is a not a good news, some viable reasons why they do so were also listed. Some advice on how Americans can prepare a savings cushion to avoid the withdrawals from the retirement funds has also been mentioned.

retirement benefits

Study Says Many Americans Are Withdrawing from a 401(k)

The study that says many Americans are withdrawing from a 401(k) was entitled as the Natixis 2016 Retirement Plan Participant Study. It mentioned that 28 percent of Americans have admitted to making a withdrawal from their retirement plan, which is usually a 401(k) plan.

The Reasons for Why Many Americans Are Withdrawing from a 401(k)

The reasons for why many Americans are withdrawing from a 401(k) were also mentioned by the respondents of the study. The most common reason was that people were going through a financial hardship. The other reasons that were mentioned were the health care issues, debt payouts, medical emergencies and even home repairs or maintenance.

The Solution

As most of the reasons for why many Americans are withdrawing from a 401(k) are short-term financial shocks, it is suggested that the Americans should have an emergency fund that should contain 6 month worth of expenses so that they can easily deal with financial emergencies without having the need to raid the 401(k).

How to go about it?

Setting up a savings cushion is a very simple process that starts with figuring out how much money one will need to save. One should also calculate the nondiscretionary expenses for each month by taking into account the necessities like rent, utilities, insurance, food, car payments, etc. One should take the total of all the nondiscretionary expenses and multiply it by 6 to decide the amount of the short-term savings cushion. After the calculation is done, one needs to decide which expenses they can forgo to increase the savings. It can be anything from eating out less or bringing lunch from home for a few weeks.

Another Idea

Another thing one can do to increase the savings cushion to avoid being amongst people who are said to be a part of the reports that says many Americans are withdrawing from a 401(k) is to treat the savings like a 401(k) plan. The savings should be deducted from the salary so that one cannot have access to it and doesn’t have to deal with the urge to spend it.

What Americans think of the Drone Delivery by USPS

A poll was conducted to map what Americans think of drone delivery by USPS. It found out that though the idea seemed interesting to many people, their major concern was safety. They don’t trust technology to not intrude in their personal lives. Hence, the providers of such a technology would need to deal with safety issues first. During the poll, it was also highlighted that making use of the drones would make the image of USPS to be more innovative.

postal service usps

The survey on what Americans think of the Drone Delivery by USPS

A survey on what Americans think of the drone delivery by USPS was conducted by the USPS Office of the Inspector General. The survey polled about 1200 people who were between the ages of 18 to 75. It also has about 250 additional residents from the rural areas. The key finding of the survey is that people are not sure about the idea yet.

The Major Concerns

During the survey on what Americans think of the drone delivery by USPS, the major concerns of the people were highlighted. The most highlighted one is that most people had safety concerns. They were not sure about the fact that the drones would be flying over and to their houses.

Another concern was that the device may malfunction. People feared that the device could be misused for many bad activities like theft. They don’t trust this technology as much as it is hoped. This fact was revealed by Jake Soffronoff who serves as a public policy analyst for USPS OIG. He even added that it’s a reasonable concern because the drone would be flying overhead.

The Challenge

As the safety and malfunctioning of the drones would not be controlled by the USPS, it would be the responsibility of providers if the drones. They would need to ensure that the technology is not misused and demonstrate it to win the faith of people. Soffronoff says that the providers of the drones would have to deal with a trust barrier in the initial times. Even the organization who is offering may suffer from a drag on overall brand positivity.

The Positive

A positive outcome of the survey on what Americans think of the drone delivery by USPS is that people think that using drones would make the USPS look more innovative and would enhance the public perception. People who have greater knowledge of the drone delivery programs are usually enthusiastic about it, says the report.

Federal Employees’ Feel Frustrated by Poor Performing Applications

Many federal employees’ feel frustrated by poor performing applications, says a new survey. The responsiveness of the agencies in resolving the issues was considered to be slow. It also mentioned that the poor performing apps reduce the confidence in technology especially among the people in the public sector. The need for greater visibility to detect and solve issues before they harm the performance of the app was also highlighted.

federal employees

Survey on why Federal Employees’ Feel Frustrated by Poor Performing Applications

The survey that says federal employees’ feel frustrated by poor performing applications was conducted by an application performance company, Riverbed Technology. It took opinions of about 335 federal employees. The respondents included defense and civilian employees who served upper and middle levels of seniority. The survey highlighted why federal employees’ feel frustrated by poor performing applications. It says that employees feel that the poor performing apps stop them from doing their work and hampers their productivity.

Another Impact

The survey also mentions that whenever an application fails to perform, it reduces the confidence of public sector employees in the information technology modernization efforts.

Slow Response

Another vital thing revealed in the survey is that about one-third of respondents admitted that it takes over 24 hours for the IT Managers of the agency to resolve application failures despite the fact that they have clear processes in place to report any and all problems.

Expert’s Opinion

Davis Johnson who serves as the Vice President of Riverbed Technology’s public sector recently stated that in the private sector, the consumer applications cannot be down. It should be same in the public sector. He added that the survey that says federal employees’ feel frustrated by poor performing applications also found that a lot of federal agencies do not have visibility tools required to solve the trouble areas before they lead to application performance issues.

Johnson said that better end-to-end application and network visibility is needed if the federal agencies don’t want the promise of federal digital transformation and IT modernization to seem like an illusion.

More Facts

The survey mentioning federal employees’ feel frustrated by poor performing applications also pointed out that 98 percent of respondents think that latency issues negatively impact the productivity of agencies. About 25 percent said that they were frustrated when the application issues occurred multiple times a day and 50 percent of the respondents wanted better app responsiveness.

Women with Career Breaks must put 25 percent towards Retirement Benefits Savings: Report

A new report has stated that the financial wellness gap between men and women is reducing but it’s still too wide. It also suggested what amounts need to be saved towards retirement benefits by the Millennials.  It stated that women need to save almost double the amount saved by a young man if they intend to take career breaks. Employers were encouraged to help women save more money for retirement.

retirement planning

The Report on Retirement Benefits Savings and Financial Wellness

The report that highlighted facts about retirement benefits and financial wellness was entitled the Gender Gap in Financial Wellness Research report. It was shared by Financial Finesse, a renowned provider of Workplace Financial Wellness Programs. The report said that the gender gap in financial wellness is around 8.9 now which have improved by 37 percentage points since the year 2012. It also highlighted that Millennials have the most amount of time to make a nice difference in the retirement benefits savings.

Women Need to Save More

The report also mentioned that women need to save more money as compared to men because they often take career breaks for the family and it harms their savings. A 25-year man should save at least 11.1 percent of his pay towards retirement benefits and it is separate from the 3 percent employer match. In contrast, a woman who doesn’t takes any career breaks must save about 12.6 percent towards retirement benefits. Women who take early career breaks must save 25 percent of their salaries towards retirement benefits to make up the difference.

Expert Opinion

Linda Robertson who serves as the Director of Planner Operations for Financial Finesse stated that employers should offer financial mentorship to women who took career breaks. It would help them to be in a position where the break does not hurt them in a financial manner. It can be done by ensuring that women have a separate emergency fund and have the debt under control.

The Assistance

It was highlighted by Robertson that many employers are actually offering financial wellness programs that help women only. These programs train and educate women on college funding, budgeting and retirement preparedness She added that employers must encourage all the employees to boost their financial knowledge. They should also encourage behavioral change in employees by ensuring that the employee follows the key learning gained via financial education so that their retirement benefits could rise.

Millennial Retirement is No Longer Expected in America

A new survey has revealed that millennial retirement is no longer expected in America as the people of this generation plan to work way past the retirement age. They think they are not saving enough, the job market is difficult and they need side jobs to save better. They are also saving less money than required despite getting better saving opportunities as compared to the previous generations.


Why Millennial Retirement is No Longer Expected in America?

The main reasons why millennial retirement is no longer expected in America is that the Millennials wish to work past retirement just to keep busy or have some income. About 83 percent of the current retirees never worked past the retirement age but 83 percent of Millennials intend to work after they reach the retirement age. These vital bits of information were revealed in the survey conducted by Merrill Edge, an online discount brokerage service that is offered by Bank of America Merrill Lynch.

Some other reasons on why millennial retirement is no longer expected in America include low-interest rates, high life expectancy rates, and lackluster savings. About one in five Millennials believe that they need to hit a lottery to be able to retire in comfort. A difficult jobs market is another strong reason because half of the mass affluent respondents between the ages of 18 and 24 admitted that they would need a side job if they intend to save enough. The people categorized as mass affluent are those who have investable assets of about $50,000 or at least $20,000 along with an annual income of $50,000 or even more than that.

Millennials on Saving

It is a fact that Millennials have got a few extra years when it comes to retirement savings. They are also three times more likely to rank the retirement plan offered by their employer as a most vital benefit, found the survey. They also don’t have much faith in the social security and would prefer varied mandatory savings plans.

The Amount of Money Needed

Three in four Millennials say that they will need about $1 million to retire in 30 or 40 years. It is not a good number according to the experts.

Advice for Millennials

Though the survey clearly states that millennial retirement is no longer expected in America, there are a few things Millennials can do to ensure that they don’t need to work for long. The most vital of them is to save at least 25 percent of the income. Millennials can begin by capturing full company match in a 401(k) plan and then increase the savings 1 or 2 percent each year until 15 percent savings goal is achieved.

Traditional Retirement Benefits Savings Methods still Working for Retirees

Traditional retirement benefits savings methods are working for the retirees these days. This was revealed in a survey. Many retirees stick to social security to sustain in retirement. They also think that their financial condition is good and that they would not run out of money.

Retirement Benefits

Survey on Retirees Preferring Traditional Retirement Benefits Saving Methods

Most retirees who are enjoying a good standard of living these days have confessed that they have relied on traditional methods of retirement benefits savings. This was revealed in a study conducted by Insured Retirement Institute during last summer. About 40 percent of the respondents stated that they were dependent on pensions as the source of income in retirement. The total numbers of respondents were 800 Americans who were between the ages of 65 and 60.

A huge chunk of the respondents had an annual household income of more than $50,000 and all of the respondents had the investible assets of at least $50,000. About half of the participants have investible assets worth $100,000 and $500,000. The survey also revealed that only 24 percent of the workers in the private sector had a defined benefit plan.

Financial Condition

A huge variety of the respondents stated that their financial condition was good or better than they expected it to be in retirement. The title of the study that revealed the financial wellness was It’s All About Income. This study also highlighted that over 70% of respondents were not concerned that they would exhaust all their financial resources while living in retirement.

Social Security Dependence

The survey also made it clear that social security was a big factor for ensuring retirees’ financial wellness too. About half of the income enjoyed by 15 percent of the retirees was through social security. Other sources of income were employment or systematic withdrawals from the savings. They comprised of only a small part of the total income of retirees.

Minimum Distribution Rules

Over half of the respondents mentioned that they had withdrawn money from the retirement accounts only to satisfy the rules regarding minimum distribution and they didn’t want that money to take care of the immediate spending needs.

The report stated that the significance of pension as a retirement benefits savings option for retirees cannot be overstated as without it, the retirees would most likely have a lower standard of living and they would also be less confident regarding their ability to sustain savings in retirement.

California’s Secure Choice Retirement Savings Program to Roll Out Soon

The Secure Choice Retirement Savings Program of California will come into effect from January 1, 2017. This program intends to help people save more towards retirement benefits by ensuring that employers who don’t offer a retirement plan sign up the employees for a state-run retirement program. The California Treasurer’s Office has named it the most ambitious move towards boosting retirement security since the passage of the social security.

retirement savings

The Impact of California’s Secure Choice Retirement Savings Program on Employers

The employers who have more than 5 employees would be required to enroll their employees in the California’s Secure Choice Retirement Savings Program if the employer is not offering any retirement plan. These employers would be exempt from Employee Retirement Income Security Act requirements because of a new rule to exempt compliant state-run retirement programs from the federal ERISA preemption crafted by the U.S. Department of Labor.

Program Development and Enrolment

The Secure Choice Retirement Savings Program will be developed by The Secure Choice Board that’s led by State treasurer John Chiang.

Key Phases

The program would be phased in many stages. The employers with over 100 employees would need to be a part of the program within 12 months while those with over 50 employees will need to be a part of the program in 24 months. The employers with 5 or more employees would need to be a part of the program in 36 months’ time. Employers with less than 5 employees are not required to participate.

Impact on Employees

As a part of the program, the employees would automatically be enrolled by the employers unless the employee opts out. If the employee doesn’t opt out, about 3 percent of the salary would be automatically added to a personal tax-deferred retirement savings account. The employee can opt out or change the contribution anytime he or she wishes.

The deductions would begin at 3 percent of the employee salary and they will escalate by 1 percent until they reach the 8 percent mark.

No Action Plan against Non-Compliance

It has not been decided that what will happen to those employers who refuse to participate in the California’s Secure Choice Retirement Savings Program or do not comply with the regulations. People just have to wait for the day when the enrollment is announced and the action to be taken against non-compliance is announced.

Federal Employees of DC area to get an off on Inauguration Day

OPM has just announced that the federal employees who are working in the DC area would get a leave on Inauguration day. The agency has also released the holiday list for the next 3 years. It believes that federal employees would also take a leave after the New Year and before the Veterans Day as they fall on a weekend this year.

Which Federal Employees are entitled to Inauguration Day Leaves?

OPM has recently released the federal holiday schedule for 2017, 2018, 2019 and 2020. In the 2017 federal holiday schedule it was mentioned that the federal employees who work in the metro area of Washington, D.C. would be given a day off on the Inauguration Day. It must be noted that the inauguration of President-elect Donald Trump would take place on January 20, 2017, which is a Friday. It is clear that the National Guard and the reserves will offer their support & services in the inauguration ceremony.

Clear Mentions

The Office of Personnel Management has made everything clear on its website. It mentioned that an employee who works in the Prince George’s or Montgomery Counties in Maryland, District of Columbia or the Fairfax or Arlington in Virginia and is regularly scheduled to perform any non-overtime work on the occasion of Inauguration Day would be entitled to a holiday.  The employees in these regions who are not regularly scheduled to work on Inauguration Day won’t be eligible for any in-lieu-of holiday.

The Expected Holidays

OPM has also highlighted the fact that there would be some expected holidays in 2017. As January 1 is on a Sunday in 2017, the workers would most likely take an off on January 2. Similarly, the Veterans Day falls on a Saturday in 2017 which means that the employees would most likely get an off on November 10 of the same year.

The Past Record

For the people who are interesting in knowing the past holiday concessions, it is noted that the Inauguration Day in 2009 fell on the day after the holiday of Martin Luther King, Jr. birthday so the feds working in the Washington DC and nearby areas got to enjoy a four day weekend. In the year 2013 also, the second inauguration of President Obama occurred on a Monday which allowed some federal employees to enjoy three days of holidays in a row.