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Congress To Deal With Host Of Financial Measures Upon Return

Congress To Deal With Host Of Financial Measures Upon Return

Both the Senate and House recessed without dealing with a few important monetary issues affecting both federal employees and retirees. However, that doesn’t mean they left it alone entirely. Congress has laid out the foundation that will lead to some decisions that will be made in the near future.

The House created a budget outline that would increase the contributions that employees would have to make toward their retirement, ending the FERS system altogether. FERS is the special retirement supplement plan for certain federal employees who must retire before the actual retirement age.

Full details are likely to be disclosed in another measure, but any outline is likely to be met with opposition and backlash from Democrats and certain members of the Republican Party.

The House, on the other hand, did make a little progress on its appropriations bill for the next fiscal year, which begins in October. It passed a measure that ties several bills together that have made it through the committees.

There’s been no news regarding the spending levels for agencies, which must be in place by Oct. 1 to avoid a partial government shutdown – similar to the one in 2013. Nothing has been brought forth regarding the federal debt ceiling either, which must be in place by the end of September. These deadlines are often used as a control mechanism in tax and spending policy decisions.

During a vote on a spending bill, the House dismissed the Trump Administration’s idea to resurrect the Circular A-76 and its request to close several DoD bases – a position taken during the passing of a separate budget DoD bill.

Both bills would be addressed after the Senate came back from its recess.

Not mentioned in another spending bill is the potential for federal employee raises – perhaps the 1.9% President Donald Trump suggested. The House Appropriations Committee appears poised to give this raise. The Senate hasn’t given an indication of what it’ll do.

Neither the House nor Senate have considered the administration’s idea to increase the buyout maximum of $25,000 to $40,000. The House defense bill did approve the extension of the DoDs existing authority to pay the increased amount.  When looked at from the agency’s standpoint, providing buyouts makes sense since it can recoup its losses without filling positions.

What’s not known is if the buyouts will be spread across the government. Multiple agencies have been keeping an eye on that possibilities since the first budget plans were lined out by the administration.  However, as it currently says, the spending bills going through Congress provide additional funding than the White House has suggested.

Again, nothing is solidified until Congress returns and makes a decision.

Obtaining the Best Federal Employee Life Insurance by Carol Singer

Obtaining the Best Federal Employee Life Insurance

By: Carol Singer

With so many different options on the market nowadays, life insurance can be a confusing topic (to say the least), especially for Federal Employees. As you may know, Federal Employees Group Life Insurance (FEGLI) only requires public sector workers to pay two-thirds of coverage while those in the private sector are required to pay 100%. Furthermore, private life insurance rates will depend on one’s health, which is different to FEGLI coverage where everybody within the same age bracket pays the same amount.


With this in mind, those who are healthy may feel as though the insurance is costly because they are paying the same amount as those who are not quite so healthy. In addition to this, FEGLI Option B and FEGLI Basic will both increase in line with adjustment to your salary no matter how healthy you may be; Option B covers you for between one and five times your yearly salary.


As you may know, Option B and Option C are also available, and these protect your partner and children. If you get married/divorced or if you gain/lose a family member, the two can be adjusted accordingly without having to prove insurability. With FEGLI Option C in particular, this is helpful for those who cannot get private life insurance; for example, those who have a health condition or are slightly older than private companies allow. This being said, coverage will never rise above $25,000 which can be quite limiting.


What Should You Do? – If we use all of the information above, the best step to take moving forward is to re-evaluate your life insurance options in five-year periods. Why? Because in this time, your insurance needs may have changed somewhat due to a big life event. If your children have completed college, you will not require the same levels of insurance now than you did back before college. Furthermore, you may have paid the mortgage, and this will allow you to reduce the coverage again. If you get married or divorced, regular assessment gives you an opportunity to adhere to your needs for the next period of your life even if it is a simple change in beneficiary.


Regardless of your hobbies, FEGLI will always keep you covered, but it becomes incredibly expensive as you age.  Once you reach a certain age, it is almost always advisable to begin reviewing the cost of your FEGLI against private market comparisons.  You’ll likely find that, as long as you are reasonably healthy, you can receive some very attractive benefits from an Indexed Universal Life (IUL) insurance policy or lock in much lower costs by using a fixed Term Insurance policy (for, say 20 or maybe 30 years) vs. continuing with FEGLI into retirement.


As long as you have the coverage for at least five years before retiring, you may maintain FEGLI Option B even after retiring. By having this in place, your partner can replace your income with this amount if you were to pass away before them. If we say you have five times your salary ($64,000 x 5 = $320,000) of coverage for option B, the cost would be just under $140 per month. After turning 60, this doubles and then increases yet again every five years until you reach 80, and this is important to consider.  This is why we highly recommend that you consider comparing your FEGLI policy against cheaper alternatives.

Facts About FEGLI

  • FEGLI becomes very expensive as you age.
  • Unfortunately, there is no way to take out a loan against your FEGLI policy.
  • Since it is a group life insurance policy, there’s no way to build a cash value.
  • In every circumstance (except the beneficiary causing your death), the beneficiary will receive the death benefit if you pass away.
  • There are no refund options for FEGLI if you choose to cancel.
  • With the living benefit in tow, you can receive early payments if you happen to come down with a serious illness.
  • For no extra cost, accidental death and dismemberment is included within the insurance itself.
Carol Singer
Carol Singer

Contact Carol Singer:

Phone: 505-672-2755

Email: [email protected]

USPS Faces Major Financial Obstacles In Funding Future Retiree Benefits

USPS Faces Major Financial Obstacles In Funding Future Retiree Benefits

The U.S. Postal Service said an impending cash crunch could cause the agency to default for a fifth straight year on a $6.9 billion payment for health and pension benefits for future retirees.

This cash crunch could also result in disruption to the regular mail delivery system.

According to the agency, cash balances are expected to be low by October. To avoid bankruptcy, it was unlikely to make its payments as federal law demands.

Megan Brennan, The Postmaster General, said it was imperative that federal regulators permit the Postal Service the freedom to raise the prices of stamps to cover its costs. The agency said the problem stems from less and less first-class mail being sent and the costly requirements for retiree benefits.

The agency has defaulted already on $33.9 billion in pre-payment health benefits. If not resolved quickly, the debt could be left up to American taxpayers to cover the costs of future postal retirees who look to get the benefits they are entitled to receive.

The Postal Regulatory Commission, which is set to meet next month, will decide on whether or not to raise stamp prices.

Brennan said the agency’s financial circumstances are serious but can be addressed. She noted that it is the unreasonable rate cap on stamp price that keeps the Postal Service from raising prices with the inflation rate. She said they would like the PRC to set up a new pricing system.

The Postal Service recently announced it would have a $2.1 billion quarterly loss compared to this time last year when it had a $1.6 billion loss. This, in spite of the double-digit increase in package delivery, was unable to counterbalance the letter mail decrease. Letter mail comprises of over 70% of the Postal Service’s revenue.


The Postal Service made $16.7 billion, which is $1 billion less than this time last year.

Chances are high that, after its 10-year review, the regulatory commission will permit the agency some flexibility in increasing its rates. This would mean a huge change in the agency’s pricing structure in 50 years. While the commission may dictate how much of an increase the Postal Service can impose, the first-class stamp price could increase significantly (It is currently $0.49).

The Postal Service, which operates as a lone agency, has been working hard to raise funds to deal with the financial burden it has been dealing with. One of the many investments the agency has made is in the purchase of new delivery trucks that quickly deliver packages to consumers.

Why TSP Is The Way To Go by David Chan

new update

Why TSP Is The Way To Go

By David Chan

thrift saving planThrift Savings Plan aka TSP is similar to a 401(k) but one that the government provides to all the federal employees. The TSP plan is a perfect fit for people who want to save but don’t like the hassle other ordinary savings plans possess.  Let’s take a look at why exactly it is what you might be in need of:

 The Quick Breakdown


TSP has a diverse choice of funds. Through it, you can get your hands on government bonds, various indexes and even the S&P 500.

Low Fees:

Many of the funds have a low cost attributed to them and have become a great choice over many other funds in the marketplace. However, there’s also room for alternative options.

Roth option for IRA:

In 2012, the Roth feature was added for TSP accounts.  Roth TSPs are a great option when considering your entire investment strategy. There are options for tax-free withdrawals and after tax investments. Of course, always consult with a professional first before you take any withdrawals.


The TSP is a great retirement vehicle. It is one of the most popular investment programs you have available as a federal employee. Of course, don’t discount the help and advice of a professional you can trust.  Whether it is to ask questions about your investment options or if you are now preparing to retire, a planning professional who knows and understands your options are vital.

David Chan
David Chan

Contact David Chan:

Phone: (510) 440-7110

Email: [email protected]

Leaving and Rejoining Federal Service

Leaving and Rejoining Federal Service: Benefits Retained and Benefits Lost

by Jay Hunt

Recently, we received an excellent question regarding what happens to all benefits when rejoining federal service. Primarily, they wanted to know what would happen if they ever returned and we realized this is something that needed to be covered, so that is what we plan to do today!

Over the years, thousands of federal service workers have gone back after leaving so this is not uncommon. In fact, it is relatively common for all of us in the world to go back to at least one job in our career. Whether we thought the move away would be good for our career or just our bank balance, it is easy enough to return when you realize the truth.

In answering the question, you will have the option to enroll into most of the federal benefits or continue from where you left off, and this includes federal health insurance (FEHB), federal employee life insurance (FEGLI), and likely more. With FEHB, it will be classified as ‘continuous’ for the five-year requirement before then carrying it over towards your future retirement.

FEGLI for Federal Employees Returning to Service

– With FEGLI, you will not have an opportunity to change coverage if you rejoin federal service within 180 days of leaving; you will just go straight back onto the same coverage you had before you left. If you left over 180 days ago, you have the option of rejoining the same coverage, or you can start from fresh with a brand new policy.

Furthermore, your annual leave will be calculated using your overall length of service (regardless of breaks) and any sick days taken previously will also carry over. If you withdrew from your TSP before resigning, this cannot be replaced although you will be able to carry on with the same plan and contribute in the coming months and years. If you managed to roll the TSP into a different account, there would also be options to roll this account into the TSP; this includes any qualified gains.

Returning to Federal Service and Retirement Coverage 

– When it comes to retirement coverage, this will ultimately depend on the time you spent away from federal service and what system you were on before your resignation. For example, you can return to FERS if this was your plan beforehand. If at resignation, you had fewer than five years of creditable civilian service, 4.4% of your salary will go towards the FERS system (this is not affected by whatever you were paying before leaving). As a side note, the percentage payable can increase by 0.5 points if your new position is covered by the law enforcement or firefighter special provisions. If you managed to obtain creditable civilian service time of over five years, your rate of contribution to FERS would remain the same.

With CSRS, you will find the rules to be different because most people are eligible to retire with CSRS; however, there are a few who are not yet eligible due to age. If you were not eligible to retire when you resigned, the following would be true;

  • You would be covered by Social Security if your break was larger than one whole year. Unfortunately, your opportunity for the standard CSRS has now gone, but you can choose between FERS and CSRS Offset.
  • If your break was less one year, you could choose FERS coverage when you return to your role.
  • At the time of leaving, you could have also been CSRS Offset, and you will be offered FERS on your return. However, all of your CSRS Offset years will be counted as FERS service for your retirement.

No matter what retirement system you follow or followed before your resignation, you will not have a problem depositing any money you withdrew before leaving. If you need any other advice, be sure to talk to a finance professional or someone who can help in federal service. If you want to retire with confidence, these decisions could be important so take your time!

You can reach Jay Hunt at;

Stratico Retirement & Insurance Solutions

[email protected]

(816) 260-6737


TSP – Increase Individual Wealth

Indexed Universal Life

Retirement isn’t something that is easily achievable. For most of the federal employees, becoming a wealthy retiree is only a long-off dream that they have always want to achieve. For some, it is also a nightmare. Many companies that used to offer pensions have now made the switch to self-fundable retirement plans. According to EBRI, there is only around 14 percent of workers that are employed in the private sector that enjoyed defined pension plans in 2011. There has been a massive decline in the number of companies that have started dropping their plans. Around 50 percent of businesses now offer 401(k) plans to their employees.

TSP thrift savings plan
Image Credits

The 401 (k) plans offered by Uncle Sam are considered to be the most generous of them all. The TSP has the lowest administrative fee, and a multitude of workers that come under the FERS retirement plan are eligible for approximately 5 percent from the government. According to a report from the Thrift Investment Retirement board of the federal government, around 75 percent of the employees invest around 5 percent (if not more) in their Thrift savings plan, which makes them eligible for the 5 percent match from the government. This 5 percent, in the longer run, can amount to serious amounts of money.

Speak with a licensed financial advisor that understands your needs for information on growing your wealth.


OPM Continues To Review Hiring Process

OPM Continues To Review Hiring Process


There is a total of 164 authorities, available to agencies that can be used to hire new employees to the federal government. Not many of the hiring appointments go on to help the agency managers in identifying talent that would ideally meet their minimum qualification standards. Of course, the ideal selection of new diverse and vigilant applicants is out of the question. The Office of Personnel Management or OPM along with Congress have also acknowledged the fact that there are no quick fixes to the problems related to business, policy, and technology in the federal recruiting process.

OPM has suggested in this regard: Agencies should change their overall approach rather than just hoping that posting the jobs to will end up bringing out the most talented candidates for them. The agencies should instead target and reach out to pools of talent consistently.
The “post, wait and pray” tactic used by the agencies while posting on the USA jobs website is not very commendable. The President of Avue Technologies, Linda Brooks said to the Governmental Affairs, and Senate Homeland Security Committee this past week,
“You should always be recruiting; you should never stop. In the National Park Service, let’s just say I need 2,000 air conditioning mechanics. You should have one posting. You should always be taking applications.”
OPM is currently trying to make incremental and periodic updates to the job portal. The first step towards an improved portal came back in last year, and the agency has planned to continue bringing out improvements.

Workers Falling Short on 401(k) Contributions

new update

Workers Falling Short on 401(k) Contributions


401(k)s may be the most important part of millions of American workers or professionals retirement plan. 401(k)s can help create the financial security that people need post-retirement. The ideal scenario is a worker making an adequate contribution while receiving their employer matching contributions at the same time. In some cases, the contributions of workers make it incumbent upon the employer to pay more than just the matching percentage. However, one among every five workers in the United States is not contributing enough to receive the full match from their employer – which is equivalent to throwing away money.


20% of Workers Fail to Receive a Full Match From Their Employer


Alright Solution has studied the plans and contributions of three and a half million eligible workers of more than a hundred companies to infer that 20% of employees do not contribute enough to their 401(k) to receive their company’s match.  Similarly, Fidelity also studied the contributions of around two and a half million workers eligible for more than six thousand plans, and they have arrived at the same conclusion. At the outset, it is simple to assess the reasons why employees are not contributing enough. The culprit is current wages.  Those who are earning below a certain threshold save far less than those who earn more. Relatively young professionals are also contributing as much as their older contemporaries, likely because retirement is much father off for them and they are less conscious of their retirement goals or post-retirement financial security. However, some older professionals and many with enough income are also not contributing enough to their 401(k) to have employer matching retirement contributions.


Wells Fargo has studied the contributions of four million people eligible for around five thousand plans. The bank found that 25% of the boomer generation is not contributing enough to take advantage of the full match from the employer. 31% of Generation X and 37% of the Millennial Generation are also not contributing enough to take full advantage of their employer’s 401(k) commitment.


Similar to the WellsFargo study, Alright Solutions discovered that 21% of workers aged forty to forty-nine saved less than match threshold, 29% saved the threshold amount and 50% saved more than match threshold.  Further, 16% of workers aged fifty to fifty-nine saved less than the match threshold, 25% were at the match threshold, and 58% were above.  Workers aged above sixty, those with the most immediate retirement objectives, saved much more readily, with 61% of this group contributing more than match threshold with only 14% saving less than the match threshold.


Many Fall Short of Match Threshold by 1%


The studies and the stats have revealed an interesting reality. While there are many who are not contributing enough and this may appear to be an erroneous decision, yet there is a silver lining. 20% of those who are contributing less than the maximum are only falling short of the match threshold by just 1% on average. For these workers to get the full match contribution by the employer, the contribution needs to be increased by an average of $750 per year. This does not seem to be a massive amount, but it can have a ripple effect on the amount of retirement income the saver could achieve.


The reality of cash flow must also be acknowledged. Most people who struggle to keep up with existing debts and short-term goals may not be able to find the extra money needed to reach the appropriate threshold or beyond. It has been found in the same study that the more one earns, the more one contributed to their 401(k). 69% of those earning more than a hundred thousand in a year contribute more than the matching threshold, thus compelling the employer matching retirement contributions and effectively contributing more. In contrast, only 30% of people earning twenty thousand to thirty-nine thousand contribute more than the match threshold.


Corrective Measures


Age, income, and expenses are the three most important factors here. The fourth factor that plays a significant role is the lack of awareness. Many workers are unaware of all the plans available to them. Many are enrolled automatically, and the workers do not check out all the details. Many workers are not even aware of the match thresholds.


Some plans do not have increasing contributions. Some plans have better match thresholds for the employees than the employer. Then there are plans allowing both Roth and pre-tax contributions. Everyone should check the match threshold in his or her 401(k) plans. One must reconfirm if the full contribution is being made by the employer.


What Happens When You Do Not Have Enough Saved for Retirement

What Happens When You Do Not Have Enough Saved for Retirement

Everyone is aging, and this is the one process that cannot be changed or reversed. Change is inevitable, coming up more rapidly than we would like it to be. Even if you are young and you think retirement is a million miles away, you should start thinking about it as soon as possible. More and more people are regretting that they failed to start saving earlier impacting their quality of life at retirement. It gets worse when we start postponing the inevitable by neglecting to spend enough time stressing about how important it is to consider our life after work. The education system does not provide basic financial know-how, and people are struggling when it comes down to their financial planning as a result. Instead of spending quality time on getting themselves financially educated, they have spent money on less important, emotional and unnecessary purchases, car loans, house loans and items well stuffed in the huge garage. Here is some information what might happen to you if you have not sufficiently prepared for retirement.

What Happens When You Age?

Remember 2000 and 2008? Alternatively, all the crisis before that? A crisis is what people call “unexpected” situations that damage the economy, causing regular citizens to lose significant amounts of their savings. Those kinds of events have destroyed well-built businesses, employees get fired, and families get displaced.  If a person is young enough, they will have a better chance to recover, but if you are in your 50s or even 60s, when one of these events takes place (and there will almost certainly be a future crisis), then the average American’s retirement outlook would go from bad to worse.

The 401(k) was created many years ago, and it has become a primary component of many people’s ‘American Dream’ – work hard, earn money and save for a rainy day – the thought is that your 401(k) will take care of your retirement income needs. The sad truth is that 401(k)’s have been neglected. Studies show that very few are consistently contributing to their 401(k).  However, with Social Security benefits being impacted by reduced Cost of Living increases, and the lack of available pension plans

What is Retirement?

Retirement is a goal that many people long for and will work their entire lives dreaming about. Moreover, in theory, it sounds like a magical time – you no longer have to work, you get enough money, you can travel the country (and the world), your kids are all grown up, taking care of their kids, so you have no real responsibilities. However, that comes only if you have taken good care of your finances and you have planned for better (or worse) days. If you are forced to work into your 70’s as many Americans do, just to maintain a certain quality of life, then you may have done something wrong.

What To Do?

We have established that financial planning for retirement is incredibly important but what should we do to avoid a sad retirement? Well, the simple answer is financial education, but it is more complex than it sounds. Reading books, going to courses, getting advice – all healthy but it would mean nothing if you do not implement everything that you learn into your life. Different people will give you different advice, so you have to experiment. Try what works for you and what does not. Some people love saving money under the pillow, other love having a secure bank account and some like to invest for the future. You will get different information from the sources that you read from but do not get discouraged – write down what you were thought and try it – only this way you will see if it works for you or not.

Create habits – some are more important and obvious than other. The first and most important rule of financial planning is to set a savings goal and stick to it.  Saving a portion of your salary can become a habit, and the compounding of interest can have a very significant impact on your retirement life when you start saving early.

Start writing down all of your expenses (and your income). Every few months you can go through them and check if you have made emotional purchases that you do not need and this way you can get closer to saving more money – money that you will need when retirement comes knocking on your door.


As always, connect with a professional financial planner for further strategies and options.




Your Guide to Investing from a TSP Millionaire

Your Guide to Investing from a TSP Millionaire

For all federal employees, knowing how and when to invest into TSP seems to be a mystery. Therefore, we’ve decided to compile an all-inclusive guide and expert advice from one man who managed to become a millionaire from his own investment. After following this advice, we hope you can put yourself in a position to enjoy a healthy retirement.

Strategy – First things first, he suggests the importance of a strategy not only with your TSP but in other areas of life too. For example, he recognized that the payments for a new car continued long after the new car smell, so he set the target of reaching 300,000 miles in a car before replacing it. Rather than paying huge amounts of money each month, he re-routed this straight into his TSP.

In a career with the federal government, he soon realized the importance of starting early as well as researching the finance world. Although finances may seem a little boring at first, we highly recommend spending some time learning about investing too because you can learn how to be comfortable in the years ahead.

Towards the beginning of the 1990s, he started to invest in stock mutual funds because he recognized the long-term benefits despite the short-term declines. Over time, he bought magazines and studied all the information available. As his knowledge improved, he started to assess the most profitable markets and where his money would be best positioned. From these humble beginnings and not really knowing where to start, he earned over one million dollars by the time he retired. No matter how late you think it is or how much you think you’ll have to contribute, you can take advantage of the TSP calculator online and work out a plan that allows you to reach your goal by retirement.

Biggest Mistake – In this day and age, the biggest mistake people make is thinking that their goal is unattainable. With this mindset, it definitely won’t be attainable because you aren’t even trying. Even if mathematics is your weakest subject of all, the only thing you need to understand is compound interest; the longer you leave your money to accumulate, the more money you have at the end. Just as in many other areas of life, you need to consider the three D’s; determination, discipline, and direction.

Key Lessons – Using lessons from the millionaire and various experts, we first suggest developing a plan before then sticking to this in the long-term. Since both stocks and bonds experience short-term dips, they will recover in the long-term, so it doesn’t pay to be hasty. This being said, you should be willing to create a portfolio of both stocks and bonds, and this combination is called ‘asset allocation’. As your circumstances in life change, you should look to increase/decrease your tolerance of risk accordingly.

After investing, drop the ‘investment news’ apps and just forget about the market for a while. Considering you’re in it for the long haul, there’s no need to panic just because the experts are telling you to withdraw. While short-term investors will follow the advice, you need to keep your head and trust the cyclical nature will turn things your way before withdrawing years down the line.

In fact, you should actually look to extend your portfolio when the prices are low because you aren’t looking for a short-term profit. With the prices down in the gutter, you benefit when they start to increase once again. Over time, you should combine large company US stocks with foreign stocks and US bonds. With a TSP, you’re allowed this sort of freedom, and you can keep adjusting the proportions as the years go by.

If you feel as though your TSP is in a strong position, you can also look into the idea of investing outside of the TSP. For example, some holdings are not available within the TSP including foreign bonds, international small company stocks, and emerging market stocks and bonds. If you’re looking for something really different, you can even move into commercial properties with Real Estate Investment Trust (REIT) shares.

Finally, we also suggest keeping your eye on actively-managed funds because you will come across some experienced managers who look after some diamonds. Rather than just looking towards those at the top of the market, look for the managers who exceed expectations year after year. If a manager has delivered outsized returns over a fifteen year period, it shows that they’ve worked in the highs and lows of the market and still managed to return well. Furthermore, another interesting factor is how important their services are to the fund. If they have a large stake in the fund themselves, they’ll want to see it perform long into the future.

Summary – No matter how far you are into your career, there is no greater time to invest in your retirement than right now. Even if you need the support of a finance manager, there’s nothing wrong with receiving a little help. If you take advantage of the TSP calculator today, you can calculate how much you need to invest to reach your goal!

Postal workers’ Pension Plan

Postal Workers’ Pension Plan

The U.S Government has special retirement policies or plans that cover all full-time federal workers at retirement. The type of plan and amount to be received depends basically on the position held by the individual while in service, as well as the agency he served. Some federal workers – like members of Congress – have reasonable retirement plans that will pay retirees as though they were still in active civil service. Federal employees like postal workers and others under the basic Federal Employees Retirement System (FERS) annuity plan can receive about 25 percent of their salary before they retire after 25 years of service.

The United States’ postal services offer workers benefits that include an option of American Postal Worker Union (APWU) health insurance plans and flexible spending accounts. Group life insurance, retirement benefits, and employees’ relief funds are offered to federal employees who work in the postal careers. To gain access to APWU health insurance plans, you do not have to be a member of the union.

Civil Service Retirement Plan

For workers who got employed into USPS before 1984, they are registered under the Civil Service Retirement System (CSRS); except they decide to join the Federal Employees System.  The CSRS provides retirees a better and larger yearly pension after retirement and also offers annual cost of living adjustments. However, unlike FERS account holders, you may not be eligible for the matching thrift savings and social security. A postal worker who retired with CSRS after 27 years of employment at age 57 with the average of his maximum pay he earned in three years being $54,000 will receive a yearly retirement payment of $27,135.

Federal Employees Retirement System

In the year 1987, the Federal Employee Retirement System (FERS) was introduced to stand in for CSRS. All USPS workers that started working after 1984 are enlisted in FERS. Workers who started before 1984 have the right to remain on CSRS or cross over to FERS.  With FERS, a postal employee who retired at age 58 following 27 years of work with the highest of her three years of income being $54,000 would get a yearly retirement benefit of $14,580. FERS members, be that as it may, are qualified for Social Security and can contribute up to 5 percent of their earnings to a TSP, which is coordinated by the government in a tax-deferred account. The implication is that FERS account holders can wind up with larger retirement benefits.

Drawing the Line Between CSRS and FERS

Tammy Flanagan, senior welfare executive at the National Institute of Transition Planning Inc., calls attention to the claim that CSRS is superior to FERS is not always true. You want to work out whatever ever you think is best for your particular condition. However, the available options include considering one’s contribution to TSP with FERS and the likelihood of retiring right on time under CSRS and working somewhere else for some years to meet all requirements for Social Security. Flanagan also argued that FERS workers have better control over their retirement. Interestingly, TSP funds may remain invested even after retirement, and Social Security benefits are accessible whenever after age 62.

Choosing the Right Financial Planner

Choosing the Right Financial Planner

Money makes the world go round; a statement that holds true no matter what way you look at it. In life and for businesses, money is the single biggest factor that controls all decisions and considerations in the coming hours, months, and decades. Therefore, it’s fair to say we could all do with a little help now and then to keep our finances in order and ensure we can be comfortable in the years ahead.

With a professional and trustworthy financial planner, you can address those key parts of life such as a marriage, divorce, graduation, or even just paying for a child’s education. By laying out all the information available, a financial planner will advise you on the right steps to take to ensure your financial security both now and long into the future. By helping you to overcome obstacles, you can avoid debt and unnecessary charges.

Today, we’re going to show you some key considerations to make when looking for a financial advisor but first we should say that this is a very personal experience. Although you can certainly ask friends for recommendations, you need to choose an advisor with whom you feel comfortable, relaxed, and a sense of trust. Without this, the whole exercise is pointless because you won’t act on their advice. With this out of the way, let’s take a look at the key considerations.



When scouting the market, look out for those happy to share their experience with the world. Within a quick time, you should know how long they’ve been in the industry, what experience they have which makes them qualified to help, and what qualifications they can offer. Within the financial planning industry, the most common credential will be a Certified Financial Planner (CFP) designation.

When someone is a CFP professional, it means he or she has passed all the necessary exams and courses that cover all the topics in the financial planning world. By passing a rigorous exam process, you can be confident they aren’t attempting to run a business from their garage with no qualifications. Nowadays, there are various types of credentials so be sure to ask what they mean or research yourself.


Payment Terms

When you first reach out to a financial advisor, their fees shouldn’t be a big secret. Although the way in which financial planners are paid can be very different, they should be happy to talk money from the outset. Just so you’re aware, planners earn their money in different ways including hourly fees, commission, retainer, or assets under management. Make sure you know exactly what you’re paying before you go forward with their services.

Commission – With some financial planners, they’ll have relationships with certain financial institutes and businesses. Essentially, this means they’ll receive compensation when they get clients to sign up to products whether it’s insurance, annuities, or any other product/service. If you’re going to go with a planner who does this, you have to remember their opinions will be influenced by the money they receive by getting you to make certain decisions. If you want a purely impartial review of your finances, go for someone with no links and no commission opportunities.

Retainer – With a retainer-based advisor, fees will be paid periodically, and this could be every month, quarter, or year. If you use their services regularly, you’ll be charged for anticipated help; it could also be based on how complex your investments may be. Typically, this is only offered when you use their services regularly, and hourly payments become too confusing/unnecessary.

Asset Under Management – With this type of payment system, the advisor will look after your investments in return for a percentage of the rewards. Generally speaking, 1% is around the average for this service, but you may be required to own a certain value of assets before choosing this method. Why? Because a 1% charge on hundreds wouldn’t earn them enough money to make it worthwhile.

Hourly –  Finally, hourly services will see you pay for every hour the financial planner helps. If you’re only using the advisor every so often, this is likely to be the payment system chosen. Across the US, charges can vary depending on supply and demand; however, common fees will be between $200 and $300 per hour. Whether they sit down with you once a month or just answer the key questions you have, this is very much a ‘bits and pieces’ service in that they aren’t required 100% of the time. Perhaps your wedding is coming up, and you need advice on how to avoid debt, here advisors can charge you for a few hours’ work with ease.


When you pay attention to these considerations, you’ll be in a great position to find a reliable financial advisor. Remember, choose a planner who suits your needs rather than just choosing them because they ‘owe your friend a favor’.





Motivation and Reward in the Public Sector

Motivation and Reward in the Public Sector

In life, we all have motivating factors that allow us to perform in our jobs every day. However, why is it that some people will always contribute more than others in the same role? Today, we’re going to dig beneath the surface to answer this question with a particular focus on the largest motivator of all; money.

In the coming years, rumors suggest that a pay-for-performance (PFP) system will soon be replacing the General Schedule. If this is true, ‘pay bands’ will decide the rate of pay for new employees before then seeing salary increases relative to performance. For many years, the appraisal system in the public sector has been a rather odd one. For example, the Department of Navy, in the 1970s, used three punch cards for Quality, Adaptability, and Quantity. After being judged to be Outstanding, Satisfactory, or Unsatisfactory, the cards were signed, and the appraisal was over.

Even after the Civil Service Reform Act (CSRA) in 1981, the new individual metrics weren’t monitored properly which meant they were just as reliable as the punch cards; even though the paperwork increased somewhat.

As part of the CSRA, ‘Merit Pay’ was also a feature where GS-13/14/15 Feds were moved to GM-13/14/15. For senior managers, they had a small pool of money they could distribute based on performance reviews. However, most were left upset by the spoils because the criteria used to judge employees were all rather subjective. Since the money was divided before the appraisals, the latter would justify the former as opposed to the other way around.

With this negative impact, the whole system needed improvement and thus came the Performance Management and Review System (PMRS). Sadly, the selected improvements didn’t have an impact, the system was pulled by Congress, and they reverted to the General Schedule (GS); this spelled the end for performance reviews, and the experiment was unsuccessful.

The Performance Review Return – Despite its disappearance, there were still advocates for the system (in theory) because it makes sense that employees work harder with money dangled before their eyes. For a long time, the interest remained under the surface before the ‘A New Civil Service Framework’ in 2014 reignited the PFP flame.

Between 2011 and 2014, President Obama’ National Council introduced a pilot system named ‘Goals-Engagement-Accountability-Results’. Known as GEAR, the program was tested in five different agencies, but no results were ever publicized in one way or any other.

Silence is Golden? – Despite the silence, the Department of Defense decided to follow suit and introduce a PFP program. Although the initial system was abandoned due to alleged favoritism, the DoD is currently launching the New Beginnings initiative which signals a fresh attempt at a PFP system.

According to the ‘Promote Accountability and Government Efficiency Act’ from Rep. Todd Rokita, reports suggest once again that Congress favors a PFP approach if only they can find a universal system that suits everybody. According to Rokita, US citizens are more than tired of seeing federal employees retain their roles after poor performance reviews and misconduct. With this new bill, Rokita hopes federal employees will become more accountable to provide the best service possible rather than ignoring calls and letters from people looking to resolve issues.

Although it wasn’t obviously highlighted in the bill, there was a statement deep within suggesting no pay increases for those who don’t achieve a score of at least 4 out of 5 during an appraisal. With this one sentence alone, Rokita suggests that pay raises will only be awarded when a performance review suggests one is deserved.

Definition of Insanity? – According to Einstein, the definition of insanity is doing the same thing over and over again while expecting a different result; does this apply here? To this day, there is still very little experience and data of a PFP system within a unionized environment. Furthermore, there’s also a question of blue collar workers who are rarely included in PFP experiments.

Of course, this discussion has taken place without even considering the cost of a potential PFP system. According to many demonstration projects, salaries actually increase further and faster with a PFP system compared to the General Schedule. With this in mind, will a PFP program be allowed the time of day?

Finally, there is even evidence to suggest that employees doesn’t even benefit from increased motivation; the foundation of a good PFP system. As we all know, money is a key motivator for employees especially for those in sales who don’t enjoy work. However, for an industry based on a mission and particular service, evidence suggests it could actually be a distraction.

If you’re looking to further your learning on this particular topic, there is a fantastic TED talk from Daniel Pink where he discusses the net loss of using a PFP system. While some industries thrive with a PFP program, Pink summarizes that believing in making a difference needs to be the main motivator for federal employees rather than money.

Your Children May Live With You Some More Years

Your Children May Live With You Some More Years

Capture Them in Your Retirement Plan


Researches reveal the increasing number of young adults still living with their parents even when they finally come of age. Most young people tend to return to their parents instead of creating their residence and home after a remarkable achievement in their life, like at completion of military service or graduation from college.


According to a recent research conducted by Pew Research Centre, about 32.1% of people between the ages of 18 to 42 years are still living with their parents, rather than their partner or spouse in their own home, a leap from the 20% as at 1960. In the research, 36% were either married or living with friends outside their parent’s home, 14% were living alone; either single or as a single parent and 22% had some other special housing arrangement like college housing.


There are several contributors to this dramatic increase in the number of youngsters still living in their parent’s home. First of them is the postponement or termination of marriage plans. A disturbing number of young people are running away from the idea of marriage.


Also, unemployment and low income have contributed a high percentage to the number of youth still living under their parent’s roof; particularly the young men. Employed young men are more likely to leave their parents and live independently than their unemployed counterparts. Sadly, the unemployment rate has dramatically increased in recent times.


In simpler terms, the tendency of your adult child to be under your roof is not only high; they may contribute little or no financial assistance to the home.


The bulk, however, falls back to the parent who begins to make unplanned expenses even as they approach or enter retirement. Based on your current financial status, this could make you work longer; engaging in full or part-time jobs to make ends meet, even after retirement from civil service.

Although your federal retirement benefits may come in handy here, it may not do much. Hence it is good to know how far it can go.


It is perhaps important for you to put up your adult child on your Federal Employees Health Benefits (FEHB) family registration, pending when they turn 26. Although the insurance package may still be extended a further 3 years, this is usually at a higher cost.

Also, the FEDVIP vision-dental health scheme can also cover your child, but not after they attain 22 years. This program, however, has several restrictions, and there is no provision for coverage extension.


SO what happens at death? The benefit a child gets has several cutoff dates. This benefit continues until the age of 18. Some exceptions, however, include:


  • For full-time students, the annuity cover the child till he/she clocks 22 years, but benefits cease if the child dies, moves to a non-recognized school, gets married,  ceases to be a full-time student, is unable to tender proof, when required of full-time studentship, or when enlisted in active military service or Academy.


  • Where a child is disabled in anyway that makes it impossible for him/her to offer self-support and one that started before the child reached 18, the child will continuously receive the annuity for life – except if the child becomes healthy, marries, or regains ability for self-support.


  • In some other schemes that have survivor/death benefits, the child’s living arrangement and age doesn’t count. This means that you can designate anyone as a beneficiary of your FEGLI regardless of age and living situations. There are exceptions though in situations where the insurance was particularly “assigned” to a number of beneficiaries – usually affected by a divorce order.


Hence, Uncle Sam may not offer so much assistance. The truth still stands: the primary responsibility of catering for your children, pending when they are financially capable and independent, falls back on the shoulders of the parents.

Is FEGLI Right For You, Right Now? By Carol Singer

Is FEGLI Right For You, Right Now?

By: Carol Singer

When it comes to the FEGLI, there are some common questions that arise time and time again but perhaps none quite as much as ‘is it the right time in my career/life for FEGLI?’. In truth, there’s no definitive ‘yes/no’ advice we can provide here, but we can suggest three considerations to help make your decision that little bit easier.


  • Firstly, do you believe that you are healthy enough to qualify for individual coverage? When thinking about this factor, you should consider your habits, age, health, lifestyle, etc.


  • Secondly, what’s your timeframe in the coming years? Normally, federal employees will get priced out of FEGLI coverage as they age and as FEGLI Rates rise dramatically, so what stage of your career have you reached?


  • Thirdly, what are you trying to protect with a potential policy?


The Federal Employee Group Life Insurance, shortened to FEGLI, is advantageous for many federal employees since coverage can be obtained without the worry of medical underwriting. If you’re still early in your career, it’s also quite easy to get a competitive death benefit. However, it isn’t all roses with FEGLI coverage because the premiums steadily increase over time and everybody pays the same rate (the flip side of having no individualism with underwriting).  This means that healthy FEGLI participants will be charged the same higher rates and unhealthy participants.  So if you are healthy enough to get individual coverage you should seriously consider less expensive FEGLI alternatives.


Potential Benefits of Private Life Insurance vs. FEGLI

If you were to assess the private life insurance market, there are also pros and cons because coverage is more flexible with various riders and underwriting…but the medical underwriting may force you to pay higher premiums if you are unhealthy.


Surviving a Health Scare – If you were suddenly struck down with a heart attack, cancer, or even a stroke, your ability to obtain life insurance would be difficult and the expenses would go sky-high. Therefore, ‘living benefits’ – benefits you can access while still alive – can be an excellent way to replace your income and stay afloat in the short-term. With private insurance, an Accelerated Living Benefit rider could allow you a certain percentage of your benefit early. On the other hand, the FEGLI offers you nothing which leaves you scrambling around with your TSP for much-needed funds.


Considering you have been working hard to contribute to your TSP year-after-year, to think it could all disappear in a matter of months on medical bills and replacing your income is quite worrying. Just because of a health problem, you lose your nest egg, and this is before we even mention taxes and a penalty for withdrawing from your TSP early.


With life insurance, the question for many years was ‘what if I were to pass away?’ However, this is quickly being replaced with ‘what if I live after a health issue?’. Nowadays, technology within the medical industry is growing rapidly, but the cost of medical care is increasing even faster which is putting families into debt every single day.


Do I Need FEGLI?

With any type of insurance you purchase, whether it’s life, travel, homeowners, or health, the idea is to protect something of value just in case something were to happen or go wrong. Ultimately, this is why life insurance is a personal choice and different for every individual in the world. Normally, you can decide with your family the main concerns and how you want to protect them.


If insurance was free to everyone, there’s no doubt we’d be taking policies against cardboard box injuries, asteroids, and everything in between. Perhaps even more efficient, if we could see into the future, we would know exactly what insurance was required (or we could prevent the problem from happening in the first place). Unfortunately, neither of these options are available because insurance costs money and we haven’t developed time machines. Therefore, the answer to the all-important question of life insurance should be answered by looking for flexible coverage at an affordable price.


Within the industry, insurance will typically be limited in the amount of triggers they have, so finding an inclusive policy such as this is easier said than done. If you were to ask a federal retiree whether they managed to purchase cancer insurance after forking out for the FEGLI, FEHB, and FLTCIP, you wouldn’t get much of a response. Even if they were lucky enough to buy cancer insurance, then what happens if they have a heart attack; nothing because the wrong trigger was set and money has been wasted.


Rather than buying insurance policies with a single trigger, it will always be more efficient to find coverage with many different benefit triggers.


FEGLI Candidates – With all of this information in mind, who does the FEGLI suit? First and foremost, Death Only Insurance will be the cheapest option for those aged under 45 years. If you are already past this age, the five-year increases have already started, and the Basic Extra Benefit has ended. Therefore, private insurance starts to become more competitive (this is helped by the addition of living benefits).


After this, FEGLI may still be an option if you have a health condition since there is no medical underwriting. If the issue is serious, private insurance companies will take this into account and raise all premiums.


With the FEGLI still around today, this alone shows that it has a place in the industry and it helps thousands of people. This being said, it is very generic in that everybody pays the same regardless of his or her health, smoking habits, and every other factor that normally plays a role. In the same breath, the price increases will apply to everyone regardless of the same factors.


Key Questions – Before we go, we want to provide you with some key questions you need to ask before making a decision;


  • Will underwriting be a problem if I go for personalized coverage privately?
  • Can I pass the underwriting in a few years’ time if I were to wait?
  • What exactly do I need to protect? – For most, the death benefit will replace income, pay for a funeral, and ensure their families can continue their current lifestyle while adjusting to your passing.
  • Will my need for insurance be removed in the next decade or two? – For example, will you finish paying a mortgage or will your children leave education?
  • Have I got cash reserves to act as living benefits?


All things considered, the best thing for you to do right now is to assess your position. The longer you wait, the more FEGLI becomes unattractive, and you are forced into private insurance which can be damaging if you have a health issue. If you need help with this decision, be sure to discuss your position with a finance expert for unique advice!

Carol Singer
Carol Singer

Contact Carol:

Phone: 505-672-2755

Email: [email protected]

How to Submit Your ‘Healthy’ and Complete Federal Retirement Application

Indexed Universal Life

How to Submit Your ‘Healthy’ and Complete Federal Retirement Application

If you are currently going through the process of planning your retirement, you will need to submit a complete federal retirement application, but the Office of Personnel Management (OPM) suggests making it ‘healthy’. For example, this describes a form that is complete from the very top while containing the right signatures and dates. With all questions asked on the form, you should provide full answers as well as check the appropriate boxes.

Avoid Common Problems – According to OPM, there are some common issues that arise for many including the survivor election chapter; this needs to be filled regardless of your relationship status. For example, consent must be given by the spouse if a married applicant were to elect less than a full survivor annuity. Furthermore, the section regarding court orders must still be addressed even if there is no order.

Elsewhere, you’ll also need to list all periods of creditable civilian and military service; for the latter, you’ll need a Form DD-214. If you happen to be taking an early retirement or perhaps even discontinued service retirement, there will be additional documentation to complete. Finally, the forms require you to provide information regarding your FEHB status and whether any of your policies will continue into retirement. For example, individuals need to have worked in federal employment for five years before their retirement date. If you also want to remain eligible for FEGLI, you need to prove your coverage for the previous five years here too.

As you can see, a healthy retirement application can be difficult to achieve so take your time, don’t feel the need to rush the process, and don’t be afraid to ask for assistance if you feel your application would benefit.  Oftentimes a qualified financial professional is the best solution to your lack of knowledge.  But make sure you find a highly-trained and knowledgeable federal employee financial planner.

Finding the Balance with TSP Contributions with David Chan

Finding the Balance with TSP Contributions
By David Chan

When you work for the federal government, there are all sorts of advantages you can enjoy and receiving a matching TSP contributions is only one of them. The Thrift Savings Plan (TSP) allows a certain amount of money to be paid your way after choosing to retire. However, there are still thousands who don’t choose to contribute into their TSP because of one main reason; it is not mandatory. With FERS, Social Security and the FERS Annuity are an automatic part of the federal employee’s retirement package, whereas the TSP option is something federal employees can opt out of.

With your FERS annuity, nobody can avoid the 0.8% payment from your salary just as he or she can’t prevent the 6.2% charge for Social Security. Regardless of how close or far away you are from retirement, these two outgoings will remain for years to come yet there isn’t such a demand on you to pay into your TSP…but should you be contributing anyway?

If we use an example, let’s say a female employee works for a federal agency for 30 years with a salary starting at $60,000. Each year, she experiences a 1% increase in salary for the entirety of her career. For the first ten years of her career, she chooses not to pay into the TSP. For the next twenty, she changes this to 5% of her earnings (which is then matched by the government). If we use the TSP Calculator available through, this comes to over $250,000 at retirement. Considering no contributions were made during the first ten years, this is quite impressive.

On the other hand, her friend and colleague contributes 5% from the very first day and continues on this path for thirty years; with the same salary. Pl ugging the different numbers into the same calculator, it comes to just short of $460,000. As you can see, this is a huge difference, and it increases to over $900,000 with a simple change in contribution from 5% to 15%.

From this, we hope you see that the best retirement is always made in the early years. If you start investing now, no matter how far away your retirement may seem, you will have earned a fantastic nest egg by the time the magical date comes. Feel free to check out the TSP Calculator online where you can play around with different contribution percentages to see what you need to save to reach your goal by retirement!

David Chan
David Chan

Contact David Chan:

Phone: (510)440-7110

Email: [email protected]

Lawmakers Offer 2018 Budget Proposal That Affects Federal Employee Pay and Benefits

Lawmakers Offer 2018 Budget Proposal That Affects Federal Employee Pay and Benefits


It appears that conservative lawmakers are contemplating yet another budget proposal for 2018 that would affect federal employee pay and benefits.


The Republican Study Committee, which has roughly 150 House Republicans sitting on it, has offered its take on the 2018 budget. The committee includes House Budget Committee Chairman Diane Black of Tennessee, House Oversight and Government Reform Committee Chairman Trey Gowdy from South Carolina and Reps. Jim Jordan of Ohio and Darrell Issa of California.


The proposal is similar to the efforts the administration is calling for – to decrease the federal employee workforce.


The RSC has proposed several other suggestions. For instance, the committee wants the agencies and president to work alongside the House to recognize the no-longer needed federal positions and the appropriations bills that allow members use and add Holman Rule provisions that limit the positions or eliminate them altogether.


According to the proposal, the Holman Rule would be useful to reform the federal bureaucracy, making it more accountable to the American people. The Holman Rule was recently used to offer an amendment to the 2018 appropriations bill. The suggestion was made to eliminate the Budget Analysis Division in the Congressional Budget Office, letting the 89 employees in it go.


The committee suggested that new hires ought to be limited to one new employee for every three who quit or retire.


Much of the RSC’s suggestions are in tandem with the president’s ideas.


What is the RSC looking at in terms of federal payment, health benefits, and retirement for 2018?


Federal Employee Pay


Republican Study Committee Proposal


The RSC has proposed a cut to the yearly pay increase of half a percentage point under the current formula. The committee said the national debt is close to $20 trillion and it’s been estimated that it’ll hit $30 trillion in the next 10 years, creating a fiscal state of emergency.


The committee used the April 2017 study from the Congressional Budget Office regarding what the government spends on federal employee compensation. The study found that 17% more money was spent on federal workers than private workers.


The committee also proposed the elimination of automatic federal employee pay raises, claiming that the increases should be based on merit, not be automatically done.


President’s Proposal


The president is calling for a 1.9% increase for federal employees in 2018 with the military getting a 2.1% increase.


House Budget


There is no mention in the proposal about civilian workers’ pay.


The House has been fairly mum about pay raises for its civilian federal employees. Moreover, the House Appropriations Subcommittee on Financial Services and General Government had no alternative to Trump’s proposal for the 2018 appropriations bill.


The entire House is looking over the package of appropriations bills that includes giving military members a 2.4% raise in 2018.


Federal Retirement


Republican Study Committee


According to a proposal by the RSC, all federal employees – new and current federal employees – would have to pay more toward their retirement benefits, but it doesn’t offer an exact percentage.


  • Future federal employee retirement benefits would be calculated on the employee’s highest five years (instead of the current High-3 calculation).
  • It would abolish the supplemental payments to employees who stop working before the age of 62.


President’s Proposal


The president’s own proposal would cut $4.1 billion in federal retirement – or a grand total of $150 billion for the next 10 years. There were four explicit changes being sought:

  • 1% increase in employee contributions for the next six years.
  • Abolish the COLA for present and future participants of the Federal Employee Retirement System (FERS) and cut COLA by 0.5% for participants of the Civil Service Retirement System.
  • Base future retirement benefits on employee’s highest five years of income.
  • Abolish the supplement payments to people who stop working before the age of 62.


House Budget


Based on the reconciliation instruction in the proposal from the House Budget Committee to the House Oversight and Government Reform Committee, the cuts in retirement would amount to $32 billion during the next 10 years. This is much lower than the president’s administration has determined.


The request from the Budget Committee doesn’t go into specifics but does propose that present federal employees contribute more to their pensions and abolish the supplemental benefit for people who retire before they’re Social Security eligible.


Health Care


Republican Study Committee


The committee has encouraged Congress to change the Federal Employee Health Benefits Program into a “premium support system.” Since the government pays a certain percentage of the health premiums for its employees, FEHBP participants can pick the higher-priced health plans.
According to the committee, the government offers a contribution for the standard federal health insurance while the rest of it employees would have to be financially responsible for. The option encourages employees to pick a plan that meets the coverage amount that meets their needs.


President’s Proposal


There are no major changes outlined in the president’s proposal to the FEHBP.


House Budget


There are no exact changes laid out in the Budget Committee’s proposal for the FEHBP.


A Look At Official Time and Performance


The proposal offered by the RSC notes that agencies are currently acting like a dues collector for federal union employees. The committee budget forbids an automatic decrease in union dues for the federal employees. However, even though the majority of federal unions must cover everybody, the employees can choose not to be a union member. If they do decide to become a union member, they can opt for the automatic dues reduction.


There have been no specific ideas from the House Budget Committee or president regarding federal unions’ role.


According to the RSC proposal, it would abolish official time.

The RSC has suggested that all federal employees be considered “at-will.”


A bill, brought forth by Rep. Todd Rokita, gives agencies the power to eliminate or suspend new employees with no right to appeal or notice, even if the employees were employed for a good reason, bad reason or no reason at all.

Congress Yet To Deal With Budget Plan That Affects Federal Retirement Benefits

Congress Yet To Deal With Budget Plan That Affects Federal Retirement Benefits



The House’s recess has just started and will continue until after Labor Day – the Senate isn’t that far behind. Moreover, as of now, there has been no floor vote taken in regards to a budget plan that would cut federal retirement benefits, as suggested by the Trump Administration.


As it currently stands, the budget resolution is just a planning document.  It needs the House Oversight and Government Reform Committee to come up with $32 billion in shortfall cutbacks during the next 10 years in programs it has control over.


The way the goal is to be attained is raising a number of contributions employees make to their retirement benefits and getting rid of the Special Retirement Supplement that people in FERS get if they retire before 62 years old and cannot draw their Social Security benefits.


The resolution didn’t touch the other multiple proposals noted in the White House budget plan, which bases the future retirees’ benefits on their highest five-year salaries, not the present three highest. It also didn’t touch on decreasing the COLA for CSRS retirees or getting rid of COLA for civil service employees on FERS benefits.


The Oversight committee can deal with these matters since they have the full discretion of how to attain the target.


Of course, when this process starts is anyone’s guess, as House Republicans have been unable to hold a floor vote because of other disagreements. A group of 10 House Republicans asked the committee to reject all proposals in similar fashion to the letter sent to the House leadership. Roughly 100 House Democrats and 18 Senate Democrats sent letters similar to their leaders.


In the House resolution, there would be a partial hiring freeze set in place with the idea to reduce the workforce by 10% for an undetermined amount of time.


In the meantime, the House Republican Study Committee came up with a budget plan on their own, which stated their positions, not an actual measure that could be voted upon. Some of their recommendations included increasing the retirement contributions and basing the COLA on another inflation index (one that would lead to minute increases).


The proposal also endorses a shift in how the government contributes to the FEHB premiums contribution. Right now, the contribution is in percentages, but they are requesting it be made in dollars. According to an analysis of that plan, enrollees would end up paying more. People in the lowest-cost plan may benefit from this switch.

Federal Employees Get New Thrift Savings Plan Withdrawal Options

Federal Employees Get New Thrift Savings Plan Withdrawal Options

The Thrift Savings Plan is a retirement plan prepared for military personnel and federal employees.  The retirement plan forms part of Federal Employees’ Retirement Systems Act of 1986. The funds and tax benefits workers get from The TSP is similar to a 401(k) package offered to private employees.

On the occasion of TSP’s 30-years anniversary in April 2017, Sens. Rob Portman (R-Ohio) and Thomas R. Carper (D-Del) passed a bill to update the TSP’s terms with related programs. In particular, the bill seeks to increase investment and thrift savings plan withdrawal options and alternatives.

For example, among the five funds available with TSP, tracking global stock will be expanded to involve new markets and Canada in 2019. The update is also making efforts at giving account holders access to invest in funds besides the current offer.

Other legislations before Congress offer federal employees, as well as servicemen and women in active service (and are not below 59 1/2 years), access to more post-retirement alternatives. Because of the limited current withdrawal options, hopes are high that this shift will offer more flexibility and free will in respect to how workers manage their retirement savings

A wide variety of TSP concerns in the federal retirement practice includes requirement and guidelines for withdrawal, divorced retirees who are asked to share their benefits with an ex-spouse.

Also, federal workers and service men who retire for special reasons may still have their TSP accounts open. Unfortunately, they will be unable to contribute more to their TSP account, but TSP funds may be transferred to certain tax-favored packages like IRA.

The fund transfer deadlines and other rules are typically difficult to comprehend, but we are, however, hopeful that the new investment and withdrawal options come with extra financial stability and as well as better comprehension of the provisions of the federal retirement plans.