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March 29, 2024

Federal Employee Retirement and Benefits News

Category: Articles

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White House Intends to Revive CSRs with Conservative Policies

A new proposal by White House will see a significant reduction in premium payments after several changes have been made to the current healthcare policies. However, critics of the new proposal argue that after implementation, the proposal will lead to an increase in costs.  The Congress was asked in a memo to; allow the expansion of access to health savings accounts, increase premiums for older Americans, and at the same time adopt the use of short-term plans for long-term purposes.

 

The Trump Administration argued there is a need for the middle-class to be provided with some relief because the administration understands the recent efforts by Congress to pop exchanges.  Federal CSR payments were terminated last fall by the Trump administration, and that is why the new proposal came as a surprise to many stakeholders.  The decision to end CSR payments was informed by the lawsuit that had been filed against the Obama Administration by House Republicans claiming that the Congress did not approach the payments. As a result, the payments were considered to be unconstitutional.

 

After receiving the CSRs payments, insurance companies are expected to ensure there are lower out-of-pocket costs such as deductibles, coinsurance, and copayments. The policy affects individuals that constitute close to 250% of the poverty level at the federal level. Similar changes had been suggested by proposed rule where there was a need to expand access to short-term plans. The Affordable Care Act rules do not affect the coverage option.  In this case, lifetime limits and annual limits form part of the ten essential health benefits.

 

Currently, older customers pay three times more than younger people regarding insurance premiums but the new proposal suggests that they should pay five times more than the young policyholders.  The main objective of this proposal is to ensure that the individual marketplace attracts more young people.

 

Apart from that, the White House insists that there is a need to life-protect all federal dollars through proper design of the legislative package that will be passed by Congress. The proposal was slammed by Andy Slavitt, who is a former acting CMS Administrator.

 

On his Twitter account, Slavitt claimed that the new proposal would raise costs for raise cost for low-income earners such as women, people with illnesses, and seniors. Until 2018, the ACA marketplace had over 12 million people that had signed up for coverage.  As a result, there is an expected increase in premiums without CSRs.

In The Military? Here’s How your Taxes are Different

If you’re a member of the military, taxes may be a slightly different endeavor for you than any other federal employee. There are several tax-related benefits to being in the military that may come as a surprise- did you know that if your expenses for purchasing a uniform are over 2% of your adjusted gross income, you can deduct those expenses when you file your taxes?

If you were in combat or a hazardous duty area while you served, there is no need to report the earnings you gained during that time. Of course, social security and Medicare will still be taken off of that income, and depending on your state, you may have to pay local taxes.

If you are not in the country to file your taxes come April 15th, you don’t have to worry. An automatic two-month extension will be applied to your filing deadline so there is no need to panic if you can’t make it back in time. If you are stationed in a combat zone, there is even more leeway- the IRS will grant 180 days’ extension either from the time you get back from combat, or when you are released from the hospital for injuries sustained in the combat zone. Also, if you are married and filing jointly, these extensions will also apply to your spouse, leaving breathing room for both of you, even if your spouse is not in the military.

You also have the opportunity to get free tax help- most military bases will offer professional support with your taxes, which, in light of the over $200 most Americans will pay to file their taxes this year, is a massive help. Finally, a TSP plan can be an excellent way to set aside pre-tax income to grow tax-deferred, up to $18,000 a year for adults under 50 years old. Remember too, when you are planning on retiring with a TSP annuity, you may be missing out on opportunities to generate more retirement income with other alternatives. TSP-withdrawal.com can put you in touch with professionals who can help you as you approach retirement, guiding you through the often very complicated process of withdrawing from your TSP to maximize your retirement income to the standard you are hoping to achieve.

Remember, no decision should be made without consulting a financial professional. The opportunity to save money could be readily achievable with the right help and guidance.

Are Your Savings Right for Retirement?

Mand and woman discuss retirement with their financial consultant

What are you doing to save for retirement? It’s probably not enough.

There are a variety of reasons you probably aren’t saving enough, but are they good enough to excuse causing yourself more hassle and pain down the road? According to a 2018 retirement savings survey, about 42% of Americans will retire without sufficient savings- not even $10,000. Women also lag behind men in retirement by as much as 5%, but it is still an improvement over past years- in 2016 63 percent of women had less than $10,000 saved, with a large section having saved nothing at all.

So what are the reasons for all of this poor financial planning? There are a few excuses, but the primary one is that you don’t make enough money to be able to afford to set some aside. However, one consideration is that when your money is saved in a tax-deferred account, like the cash value of an indexed life insurance policy or IRA, you are not paying income tax on that segment of your income, which can have the exciting result of reducing your paycheck by less than what you contribute to the fund. It may sound odd, but when you think about it, it makes sense- after all, if your income were, say, 10,000 dollars a year, and you contributed 1,00 of those dollars to the fund a month, assuming a 25% tax rate, your final paycheck would only be reduced by $75, but your account would grow by $100. Attach this to a good market with reasonable growth, and you would be in a vastly more comfortable position with, all things considered, a negligible charge per month.

However, if you are drowning in debt, whether it is a mortgage, credit card bill, or another loan, it should always be an essential priority to pay off these loans. But at the same time, there is no more significant loan than the one you’re paying to your future self- after all, if your debts are all paid but you have nothing to live on, your retirement will be a disappointment, and you will have nothing to fall back on in the case of a medical, family or another financial emergency.

Of course, everyone’s case is different, and not everyone can make these sometimes difficult decisions without the help of an expert. Talk to a retirement professional today and make sure that you know what you need to do to ensure you are financially ready for retirement.

Study Finds Telecommuting Makes Job Satisfaction Take Off

Work-life balance is very important to Federal employeesDo you telecommute or telework? It may make your job satisfaction skyrocket.

In a new federal employee study by the Office of Personnel Management, participation in teleworking or other agency-run wellness programs perform heavily more favorably on performance reviews than those who do not. More than 72% of employees talking about the program said that the program not only made their performance better, it also vastly improved their morale and intent to stay with their current agency, no small feat in an atmosphere with cripplingly low federal employee confidence and security in their jobs in light of recent government shutdowns.

Nevertheless, there is still hope. The study indicated that the reaction to the increased work-life balance offered by telecommuting was overwhelmingly positive, with nearly 80% of all employees saying that they were happier with their more flexible schedule. The reaction to other wellness programs was more lukewarm- only 38% said that they were happy with health and wellness programs.

Less than half of all federal employees think that their managers approve of the use of work-life programs, and in many cases, they aren’t wrong. For instance, the Department of Agriculture changed its telework policy, requiring its employees to be physically present four days a week. Considering the results of the study, it would seem that the Department of Agriculture would want to instead increase options for federal employees to work from a distance. However, for the most part it seems that federal employees would be highly interested in, and remain invested in, a program that would allow increased flexibility in their working hours.

Ultimately, the idea of a work-life balance is a distinctly Millennial concept, and with a changing work culture and a significant Millennial disinterest in public sector work, there is a sort of ‘change or die’ impetus to make these changes. Over decades, the public sector has been stagnant, using outdated technology and work methods, and younger generations are taking note. It isn’t just a question of Millennials, either, as even to the relatively technically up-to-date Generation X represents the largest percentage of federal workers today. Without updating the essential processes that this country runs on, there is no chance that it will be sustainable.

Federal employees are quickly moving towards the generational change that implies a movement towards more modern demographics, and a massive leap forward in making that happen would be to implement these key work-life programs. It remains to be seen where this can go, but for now it will be something to keep an eye on in the future.

Marriage: Wait until Retirement or Not?

Should I wait until retirement to get married?

Being in a non-standard relationship gets confusing- especially when your retirement is coming up. Many soon-to-be-retirees find themselves in this situation- they have been in a relationship for a long time and they’re considering moving to the next level, but should you wait until after you’ve gotten the stress of retirement over with?

The answer is actually an emphatic ‘no’. For the most part, although your life is your own and no two cases are exactly the same, there are a plethora of protections that your spouse will receive when they marry you under FERS that will go away as soon as you are retired.

Firstly, spouses can only be added to your FEHB if you are married. As long as your spouse is covered, they can continue being covered by FEHB after your death. A survivor’s benefit can also be a possible option. If you have been working under FERS for at least 10 years and you have been married for just 9 months, it is an easy process. After retirement, there is still a possibility of getting a spouse covered under your survivor’s benefit, but it can be much more expensive. If you choose to not get married at all, there is the possibility of an insurable interest survivor benefit- but this can be expensive and benefits can be much reduced.

In the case that you die before getting married, or even if you get married for less than nine months and pass away, all of these benefits are almost impossible to impossible for your significant other to receive.

There are many questions and a lot of confusion about how these benefits apply, even for spouses. Electing a survivor’s annuity is an important thing to consider- it can provide a significant portion of your annuity to your spouse even after you die. The cost is comparably negligible- the portion that your spouse can receive can be up to 55% for a portion of your annuity worth 5% to 10%.

If you have more questions, there are several options available. The main official government resource to find out more information is here: https://www.opm.gov/retirement-services/fers-information/ , but there are many difficult questions that are necessary to answer that can’t be answered by just research. For questions like this, there are several other resources available: for instance, to effectively cover your spouse, an option to consider is withdrawal from the TSP plan. You can consult with experts at http://tsp-withdrawal.com to learn more about better options, or simply consult a financial expert with experience in financial retirement.

Retirement Inequality: Worse than income inequality, study finds

Most small business owners find it hard to get employees on retirement savings plans due to the high costs. As a result, some employees are forced to work on their own when it comes to setting up 401(k) plans.

 

To address this problem, Oregon introduced a state-sponsored retirement savings programs that all employees within the state get an automatic enrollment in Roth IRAs.

 

This was an unprecedented move by the state of Oregon in an attempt to address the high-level retirement inequality in the state. Therefore, the only way to encourage more employees working for small companies to begin saving for retirement is by making things easy for them.

 

A recent study revealed a large number of workers in America do not have sufficient retirement savings while some do not even have a retirement account. In fact, more than 50% of employees in the United States are uncertain about their financial security after retirement. As a result, there is a need for state governments to step in and help address the high levels of retirement inequalities.

 

Most American households have been experiencing some improvements in savings as a result of stock market gains and rising home values. From the late 1980s, the number of unprepared working-age households has increased by over 20%, and this means that most people are more likely to experience financial challenges during retirement.

 

This worrying trend has been caused by a wide range of factors, and some of them include lower interest rates, longer lifespans, and a higher Social Security retirement age. Consequently, most people left with Social security as their only source of retirement income.

 

Low-income earners seem to have bleak future as there are no guaranteed pensions. The retirement savings inequality is attributed to defined savings plans that were introduced to replace guaranteed pensions.

 

The retirement accounts for lower and middle-income families are negatively affected by stagnant earnings and escalating housing costs. On the other hand, climbing investment values seem to favor wealthy households leading to existing inequalities when it comes to retirement savings.

 

The Federal Survey of Consumer finances recently revealed that the most affluent families continue to record solid savings growth as compared to other people. The inequalities are also witnessed across demographic groups where whites have solid savings as compared to Hispanics and African-Americans.

Life Insurance Losing Appeal in Changing Generational Priorities

The reduction in the number of people purchasing life insurance policies has reduced in the recent past, and this has become a major concern for the industry. In fact, most low-income earners do not seem to care about life insurance at all- only 27 million policies were bought in 2016, which, while it may seem like a lot, records indicate that the same number of policies was bought in 1965.

 

The policy sales remained the same despite the fact that there has been a 50% increase in population between 1965 and 2016. However, the decline remains a mystery. In fact, there was a 17% decline in the number of Americans with life insurance in the last three decades.

 

The reason for buying insurance varies from one person to another, and this might have an impact on the current number of life insurance policies. Some of the reasons include; covering for funeral expenses, making sure that mortgage payments are covered, and passing wealth to family or future generations. The demographic shifts have completely changed people’s motivations, and some of the reasons for having life insurance have become less important in modern society.

 

However, the poor performance in the life insurance industry can still not be explained by demographic and socio-economic trends. The cash value life insurance is a life insurance product that has been recording the lowest number of sales in the recent past.

 

The fact that the cash value life insurance policy provides a saving component should make it popular among policyholders. However, term life policies seem to be more popular among Americans, and yet it does not have the saving component.

 

Also, the massive decline in cash value life insurance policies that were experienced from 1992 to 2010 cannot be explained by changes in tax law or demographic changes. Life insurance decision should be determined by life expectancy, but it is also puzzling to know that this is not the case. There has been a rise in the overall life expectancy in the last few decades, and this can be used to explain the decline in life insurance policies.

 

However, life expectancy has only increased among high-income earners who form a small percentage of the entire population. On the other hand, there has been stagnation in life expectancy of low-income earners. Normally, this current trend in life expectancy should lead to a decline in the number of high-income earners with life insurance and increase in the low earners with life insurance.

 

However, the opposite seems to happen as there has been an increase in the number of high-income earners on life insurance as the opposite happens to low-income earners. This remains a puzzle that is yet to be solved.

Divorce for Federal Employees: What to Do

Federal benefits can be affected in a significant way by major events in life such as the birth of a child or marriage. In fact, instances of divorce can lead to a lot of complications when it comes to claiming federal benefits. The following are some useful tips for divorced or separated federal employees.

 

FEHB Benefits for Separated Federal Employees

 

Your spouse will still be eligible for coverage if you are in the process of annulling your marriage or when you are not legally separated. It is important to remember that this only happens when your FEHB enrollment includes the self and family option or the self-plus-one option.

 

Former Spouse Benefits after Divorce

 

The FEHB coverage for a former spouse ends when the divorce process has been finalized. In fact, it ends the same day at midnight.  In this case, even a court order cannot stop this law from being implemented. However, the spouse equity act allows your former spouse to continue funding the coverage in his or her private capacity after your divorce has been finalized. A former spouse can convert to an individual policy or choose temporary continuation.

 

Your FEHB Benefits

 

After your marriage has been annulled, the FEHB plan has the self and family option that allows you to replace your spouse with other eligible family members. However, you can change your FEHB plan to the self-plus-one option in instances where there is only one family member that is eligible for coverage.

 

Also, one can change to the self-only option when there is no other eligible person for coverage under your plan. You must complete the Standard Form 2809 to make any changes when it comes to coverage.

 

 FEGLI Designation of Beneficiary

 

Federal employees designate a beneficiary when they sign up for the Federal Employees’ Group Life Insurance. The designated person receives the FEGLI proceeds when you die, and most married people designate their spouses.

 

However, a married person that ends up getting a divorce can change the beneficiary. The fact that you are no longer married means that you have to make the necessary changes by completing a Standard Form 2823 that is available at www.opm.gov/forms.

 

Survivor Annuity

 

At the end of a divorce process, one is no longer required to provide a survivor annuity. However, they must report divorce or annulment to their respective federal agency for this to happen. Retired federal workers must inform OPM when they get a divorce.

 

 

Life Insurance: Kid-Tested, Mother-Approved?

Life insurance companies have a new, unconventional sales strategy: selling life insurance policies on children.

The fact that most life insurance companies are asking parents to purchase life insurance for their children can seem to be incongruous, almost like buying your three-year-old a car with the idea that it will be cheaper when they are older. The idea seems absurd, but life insurance companies have recently strongly favored these sales strategies.

 

The most interesting thing is that insurance companies do not directly say that they are urging parents to purchase life insurance for children. Instead, the companies have coined some enticing phrases, such as “college plans,” “grow up plans,” or “get started plans.” Such pitching terms end up confusing parents and grandparents to fall into their trap, playing on their emotions to get an easy sell.

 

Realistically, children do not need life insurance and these companies are only interested in making easy profits. They just want to take advantage of the fact that parents and grandparents love their children and can fall for any plan that appears to benefit their kids. There is no problem with selling life insurance to adults as it is a wonderful retirement plan but extending the same to children amount to conmanship.

 

Life Insurance should retain its Original Purpose.

 

Life insurance companies should stick to the plan’s original purpose, as it is an excellent long-term financial plan. Purchasing a life insurance plan ensures that your family or dependents are fully protected from economic loss when you die. It is true that a person’s young family benefits from life insurance as it gives them the much-needed financial security.

 

On the other hand, a family is less likely to suffer any considerable economic loss after an unfortunate death of a child. The death of a child leads to an emotional loss, but the issue of financial loss, which is the main incentive behind the purchase of life insurance, is tough to justify.

 

Life insurance companies understand that they cannot sell life insurance for children by focusing on economic benefits, which is why the pitch is a more indirect approach to take advantage of the parent of children. The fact remains that these  “grow up plans” are nothing but life insurance for people who do not need, or even really want, coverage.

 

According to life insurance companies, there is a possibility that some children may not qualify for life insurance when they become adults, and it is a good idea to take advantage of the cheap rates. However, the fact is that until middle age, life insurance will remain relatively cheap in the vast majority of cases.

The Pay for Performance Proposal

 

 

Federal workers continue to be affected by the many policy changes that are being introduced on a regular basis. Some of the proposals raise a lot of questions as they appear to be very controversial or do not in any way add something new. For instance, there are reports that President Trump has plans to introduce the ‘Pay for Performance’ policy for all government employees. However, this does not seem to be something new as good performance by employees has always been rewarded by government.

 

Currently, there exists pay for performance systems for federal employees at high levels or senior executives. In fact, senior executives receive an average 2% salary increases based on ratings in 2016. Apart from that, there were also cash awards for good performance, and the government gave out an average $12,000 in cash awards for each senior executive. The performance-based average wage raises during the same year was $4,000 for each employee. It is estimated that over 81% of senior executive received cash awards for their performance.

 

Pay for performance can be compared to “quality step increases,” and it is important to point out that such raises are not a preserve of senior executives. Other categories of employees are also entitled to the performance-based raised.  In fact, employees in lower ranks can rise through the ranks to higher positions within a short period through performance-based raised. Such raises usually are $1,700 on average. However, less than 3% of employees in lower ranks receive performance-based raises.

 

Although federal employees in lower grades rarely receive performance-based salary raises, most of them are normally considered for cash rewards. In fact, almost 50% of federal employees in lower grades earn an average of $1,000 as a rating-based cash award. Apart from rating-based cash awards, federal employees in lower grades also receive other types of performance-based awards that include group performance awards, suggestion awards, and time-off awards. A recent study revealed that 25% of federal employees in lower ranks have already received an average of 19 hours in time-off awards for their exemplary performance.

 

Trump’s administration is yet to demonstrate how its new pay for performance proposal will work. So far, the White House has declared the need to reduce regular step increases and in the process slow their frequency. Also, the government has set aside $1 billion to help in retaining high performers through pay incentives. The performance-based raises suggested by the government are meant to replace in-grade increases.

Retirement Savings Mistakes that can Cost you Greatly

Saving for retirement is an uphill task for most people, but knowingly or unknowingly, you can make this already challenging task a costly mistake. This article will highlight some of the common errors that can cost you your retirement savings, and show you the best way to stretch a dollar to its limits.

 

It is advisable to pay special attention to retirement savings plan to guarantee yourself some financial security during retirement. Having worked hard for many years, your golden or retirement years should be as enjoyable as possible, but if not handled with caution and good planning, this period can turn to out to be a nightmare. It is possible to control most retirement planning mistakes if you are just willing to listen to some advice.

 

To begin with, it is always advisable to use a retirement calculator when planning for your retirement. If you have not been using a calculator, it is time for you to reconsider your strategy. A retirement calculator helps you set your retirement on the right path by assisting you to estimate or predict benefits or possible earnings.

 

To use a retirement calculator, you only need to input your expected time of retirement and what you make to predict your financial position during retirement. Take a step in the right direction by establishing a foundation of good sense and understanding of your potential financial position. It is always important to know your position as time goes by to avoid surprises when you eventually stop work.

 

Secondly, look out for your employer’s 401k match and take full advantage. In fact, when looking for free money, you can find it through your employer’s 401k match- they will sometimes match up to 5 or 6% of your contributions.

 

Thirdly, most people lose a lot of money in what referred to as “record keeping” fees, and it is time you also gave the issue serious consideration. Some retirement plans refer to the fees as “account maintenance” fees, and you will just continue losing your savings if you do not make the necessary changes.

 

According to industry experts, a 1.5% account maintenance fee is reasonable, but some companies charge up to 4% of your savings. This is complete exploitation as it is a significant amount of money. You should look out for a retirement plan that has acceptable “record-keeping” fees to reclaim your savings.

 

Finally, it is essential to monitor your account on a regular basis to reset your goals or know your current position. Taking years before checking your account is a huge mistake.

Consumers Ready to Submit a Saliva Sample in Exchange for a Better Life Insurance Deal

Would you allow life insurance companies to check your DNA? Some people are doing just that for a better deal.

According to a recent survey that was conducted by Life Epigenetics, a genetic mortality prediction company, most life insurance consumers would be willing to provide saliva samples to get a better deal on life insurance prices, or to streamline what can be a complicated and involved process.

 

The use of epigenetics when it comes to underwriting life insurance is one of the latest trends in the insurance industry. Submitting saliva samples guarantees policyholders a better life insurance price. According to the survey findings, 82% would provide the samples for the underwriting process to be streamlined or automated while 75% would do it for a better life insurance price.

 

Moreover, the survey indicated that most participants were eager to see the results that such samples could produce even if they were hearing about the concepts of epigenetics for the first time. This idea of learning more about oneself is not an entirely new concept­- some consumer services such as Ancestry.com and 23andMe.com take these genetic samples to assess the ancestry or genetic makeup of consumers.

 

The current CEO of Life Epigenetics, Jon Sabes, is of the opinion that financial planning tools such as insurance can also apply cutting-edge science to improve their results. Consumers are beginning to appreciate the need to understand their own biology as well as the need to understand biology’s role in their lifestyle, as such information is vital in improving their lives. The modern consumer is open-minded and recognizes the fact their daily life is mostly influenced by the current radical improvements in technology.

 

There have been several new discoveries when it comes to health and wellness as a result of epigenetic science that would not have been possible a few years ago. That is why it is essential to make good use of the high throughput in biotechnology and the recent advancements in computing power.

 

Therefore, the next natural thing to do is to apply the predictive technology to more important aspects of life such as financial planning. Individuals can make these critical decisions about their life after getting useful insights about their health and wellness. With such knowledge, you will be able to plan for your future and know how to pay for your health and wellness.

How to Minimize your Taxes in Retirement

Everyone pays taxes, but are you paying them in the most efficient way?

All people must pay taxes, but it is always important to be tax efficient. Being tax efficient means avoiding unnecessary tax payments by making the right decisions when it comes to retirement plans. The following are some tips on how you can keep your taxes down in retirement;

 

Stay focused on your Plan

 

Regardless of your current stage in life, it is important to start planning for retirement as early as possible. However, the best planning can be done after you stop receiving those paychecks.  It is possible to reduce your income taxes in retirement when you stay focused on your plan.

 

Monitor how your Income Sources are taxed

 

Some people do not even care to know how their income sources are taxed and this might make one lose a large amount of their retirement saving in taxes. To begin with, you must come up with a monthly after-tax income goal.

Some of the most notable sources of retirement income include; dividends, interest, Social Security, Roth IRAs, and traditional IRAs. All the income sources are taxed differently. Some of them may attract favorable taxes while others attract high taxes.

 

In this case, you have to select the right combinations that can give the lowest amount in taxes. Most pensions are taxed as normal income, but you can spend your money tax-free by pulling it out of your retirement account. Also, the amount of tax you pay will depend on whether you are planning to invest your retirement funds or not.

 

It is interesting to know that some people can end up paying 12% in taxes while others pay 22%. All this depends on the kind of strategy you employ when it comes to using your retirement savings. For instance, you can miss out on some attractive tax brackets for the IRA income when you over-spend your non-retirement money.

 

You are more likely to pay higher rates when you pull the IRAs in the coming years. Taxes on social security are normally high when you have a higher income. In some instances, taxable income for your social security may go as high 85% when you have a high income.

 

It is important to look for ways of protecting your retirement savings, and one of them is by looking for affordable taxation programs. You can benefit from a compounded rate of returns when you pay fewer taxes, and this enables you to have sufficient retirement savings.

Finding The Right Financial Advisor for You

Finding a financial advisor that’s right for you is just like finding any other professional, like a tailor or a barber. Of course, if you pick the wrong barber, you wear a hat for a few weeks. Pick the wrong financial advisor, and the situation becomes dire.

Most people find it hard to openly talk about their financial needs, which is why it is crucial to identify a financial advisor you can fully trust. For your interactions with your financial advisor to be productive, you must feel absolutely comfortable. The right financial advisor should be able to match your specific financial needs regarding experience and knowledge. The following are some useful tips on how to find the right financial advisor;

 

Get Recommendations

 

You can get useful recommendations from co-workers, friends, or family when looking for a financial advisor. You can find out about the professional they trust with their financial needs and ask them why they believe the professional. Other useful sources of recommendation include;

  • Brokerage firms
  • Online customer reviews
  • Internet listings
  • Your bank
  • Your attorney or tax planner

 

Interview the Candidates

 

You can only find an investment professional that is right for you by talking to several candidates. You should ask relevant questions and also be ready to respond to their questions. A prospective financial advisor may ask you about your;

  • Level of investment risk
  • Long-term healthcare plans
  • Retirement plans
  • Insurance needs
  • Financial goals
  • Current investments

 

 

You should remember to ask for references from their colleagues such as insurance agents, attorney or accountants. Also, you should request for a contract showing the amount you are expected to pay as well as the services provided by the financial advisor.

 

Look out for their Credentials

 

It takes a lot of time and effort to get professional licenses despite the fact that it does not guarantee competence. However, you should always check look out for the basic professional designations and certifications when selecting a financial advisor. The most notable professional designations of a financial advisor include;

  • CIMA, Certified Investment Management Analyst
  • CFP, Certified Financial Planner
  • ChFC, Chartered Financial Consultant
  • CFA, Chartered Financial Analyst
  • CLU, Charted Life Underwriter
  • CPA, Certified Public Accountant

 

Ask about their Preferred form of Compensation

 

Forms of compensation vary from one professional to another, and that is why it is important to ask how they are compensated. The most notable forms of compensation include; payment on a commission basis, charging a fee for based on time spent with a client, or fee plus commission.  Also, it is advisable to build a relationship with your advisor for more positive engagements.

Will Your Spouse Receive Their Life Insurance Benefits?

 

Are you absolutely sure that, in the event of a sudden death, you will receive the benefits of your spouse’s life insurance?

When a policyholder with life insurance dies, there are many circumstances that can make their partner unable to collect the life insurance benefits. When a spouse applies to receive these benefits, there are a large variety of reasons as to why you could be denied, and unless you get lucky and raise enough attention to the issue that the company accedes, these benefits can be lost forever.

So how to avoid this situation and get your benefits with no hiccups or stress? The following are some useful tips for ensuring that your spouse gets life insurance benefits without any problems;

 

  1. Ask Questions

 

When you are not sure about something, it is always advisable to ask questions for clarity. On the other hand, policyholders are also expected to be honest when responding to questions or providing any information. Life insurance companies can deny you benefits based on incomplete or inaccurate information, turning you down for not reporting even minor ailments or medical conditions that could have nothing to do with your or your partner’s death.

 

  1. Ask for Temporary Cover During the Underwriting Process

 

Death can occur before the policy becomes operational and that is why there is a need for temporary cover. Otherwise, you cannot go to claim life insurance benefits before the underwriting process has been finalized. Arranging temporary cover during underwriting requires you to pay premiums, which will be refunded when the policy kicks in.

 

  1. Keep Notes

 

When having a conversation with representatives of a life insurance company, it is advisable to keep notes of everything you discuss, even the minor details that you wouldn’t think you need to keep track of. If nothing else, your notes should include dates and names of the life insurance agent serving you. Such information or documents come in handy as evidence in instances of denial. Your agent should provide you with a copy of all the interview statements during the application process.

 

  1. Read Guides before Purchasing a Policy

 

Bodies such as the National Association of Insurance Commissioners and the American Council of Life Insurers have some useful guides that one should look at before purchasing a life insurance policy.

 

  1. List a Secondary Address

 

Your policy should have a secondary address as this ensures that you receive reminders when you forget to your premiums. This typically happens when you change banks or move to a new neighborhood.

TSP Found to Have Lowest Information Security Score

Federal agencies are supposed to observe all the set standards when it comes to federal information security.  In a recent audit, it was revealed that TSP recorded the lowest score regarding compliance with information security standards. TSP is a federal agency that is in charge of administering the 401(k)-style retirement program.

 

Thrift Savings Plan is run by the Federal Retirement Thrift Investment Board which has an information security program that was examined by auditors from Williams Adley. The Federal Information Security Modernization Act requires all Federal Agencies to comply with information security standards entirely and that is why all the information security programs have to be audited.

 

In 2017, TSP scored Level 1 out of five based on inspector general reporting metrics. The Federal Retirement Thrift Investment Board (FRTIB) had come up with quite a lot of policies and measures to enhance cybersecurity and upgrade IT infrastructure, but the auditors found out that most of the policies were yet to be implemented.

 

For a federal information security program to be considered to have met the set standards, it must at least have a Level 4 score. A federal agency can only get a Level 4 score after it has put in place the right qualitative and quantitative measures to ensure that its strategy, procedures, and policies are effective. Also, the auditors assess the necessary changes for that specific federal agency.

 

In their final report, the auditor stated that FRTIB did not have an organization-wide information security program that meets the set standards regarding implementation and efficiency. All the seven IG FISMA metric domains were used to assess the system, and the auditors found out that the agency had control deficiencies when it comes to technology, process, and people.

 

In an attempt to defend the poor showing, FRTIB officials argued that a policy must remain in operation for a minimum of one fiscal year for it to help the organization enhance its FISMA score. The officials insisted that the audit should not have included policies that were introduced beyond Sep.30, 2016 in the 2017 audit.

 

In other words, the officials claimed that it was difficult for the score to reflect any change they had introduced because the changes had not been operational for the entire fiscal year. On the other hand, the auditors were of the opinion that the TSP policies were “Ad Hoc,” inadequately defined, and reactionary.

 

New Legislation Would Require ‘Non-Essential’ Fed Employees to be Named

 

 

Federal employees that are considered “non-essential” by the government stay at home without pay during a partial government shutdown. A new piece of legislation was recently released that would require the federal government to explicitly name those federal employees that are considered ‘non-essential’.

 

The Essential Act of 2018 (H.R. 5091) was sponsored by Congressman Ted Budd and is largely meant to protect federal workers. According to the new legislation, the Office of Management and Budget has to receive a report from each federal agency including the job details of all “non-essential” employees. The report should include the salary and job description of furloughed employees during a government shutdown.

 

According to the Washington Post, over 800,000 federal employees were furloughed in the 2013 shutdown. Budd argues that the located bureaucracy can only be dealt with when there is transparency. The main objective of this proposal is to demonstrate that the government has become weighty and overinflated over the years with these ‘non-essential’ employees.

 

It is unfair for government employees to be told to stay at home when the government shuts down its operations. In fact, the Congress is not supposed to shut down government operations arbitrarily as it amounts to irresponsibility. However, there is a need for some transparency in instances where such things end up happening.

 

The “Nonessential” Category

 

The “non-essential” tag that is given to employees that stay at home when there is a shut down has always faced criticism any time there has been a looming shutdown. Federal employees feel that the tag is demeaning, as it indicates that they are not even important to the government.

 

In fact, the term “shutdown” should not even be used as government operations still go on during such situations. The most appropriate tags to use in such situations include; “furloughed,” “excepted,” and “exempt.”  However, only employees that who go home without pay during a shutdown can be referred to as “furloughed.”

 

No agency would continue to exist if all employees were to be furloughed and that why designations such as non-essential or essential employees should be used during a shutdown.

 

In fact, the terms “excepted” and “non-excepted” were introduced in 1995 to replace “essential,” and “non-essential,” but most people are reluctant to use the new terms. The previous terms are still being used today despite the fact that some federal employees are not comfortable with such terms. The Office of Personnel Management insists that federal employees that are subject to furlough are neither “excepted” nor “exempt.”

Kaine against Trump’s Attempts to make the Dismissal of Federal Employees Easier

Senator Tim Kaine has slammed Trump for his plan to empower federal agency heads through Congress to dismiss federal employees. According to Kane, president Trump was afraid of being forced to be accountable by federal employees that may just be doing their jobs.

 

While addressing federal workers during the annual legislative and grassroots mobilization conference organized by the American Federation of Government Employee’s (AFGE), Kane argued that Trump is a power hungry president that should not be given powers to fire federal employees at will.

 

On January 30, Trump called for the extension of firing powers to all federal agencies and praised the VA Accountability Act. The Act gives firing power to the head of the Department of Veterans Affairs to dismiss employees that are perceived to go against the set guidelines.

 

Trump claimed that federal employees that undermine public trust should be removed from federal service while good workers should be rewarded by the relevant Cabinet secretary. Currently, Cabinet Secretaries and federal agency heads do not have such powers, and Trump was calling on the Congress to empower them.

 

Kaine said that Trump’s remarks did not in any way surprise him and that the objective of Trump’s current campaign is to come up with a way of punishing political disloyalty in federal service. He claimed that the president has already sacked the deputy attorney general and an FBI Director for perceived political disloyalty.

 

According to Kaine, Trump has in the recent past threatened to stop a special investigation, and this is a clear sign of his intentions.  In fact, Kaine claims that he wants to force people to be loyal to him instead of being loyal to the constitution.

 

The Congress has already received a Republican proposal on the issue, but Kaine and a good number of other Senators are opposed to the new plan. In fact, the proposal can only pass the Senate with 60 votes, and Kaine is happy that this is an uphill task. Currently, Republicans have a slim majority of 51 members and any opposition from Democrats will make it difficult to pass the bill.

 

An attempt to extend the VA Accountability Act to other agencies is a continuation of Trump administration’s attack on Civil Service. Other attacks have been the two government shutdowns and the hiring freeze. J. David Cox, the current AFGE President, observes that there has been a rise in the leach class whose intention is to suck the life from federal service.

 

New Social Media Rules Forbid Federal Employees from Making Political Posts

Federal employees that want to keep their jobs have to stay away from making political posts while at work. According to the new guidelines under the Hatch Act, federal employees have to avoid making political statements on social media platforms while on the clock.

 

The Act has clear guidelines on what federal employees are not supposed to post on social media. There are certain types of political activities that have been prohibited under the Hatch Act, and this means that all federal government employees are always under close watch.

 

Who does the New Act apply to?

 

The new guidelines apply to employees in all federal agencies including heads of various federal agencies, members of federal agencies, ambassadors, National Park rangers, and NASA workers.  However, the new guidelines do not apply to the legislative branches of government, the president, and the vice president. Federal employees are expected to stay within the law in their political engagements on social media.

 

Shares, Likes, and Retweets are Illegal

 

It is important to point out that the law is not limited to posting. The law extends to liking, sharing, or retweeting your favorite political posts or pictures on Instagram, Facebook, and Twitter. Moreover, federal employees are forbidden from engaging in the mentioned social media activities in both private and professional lives.

 

However, the employees can donate to political causes and campaigns at a personal level but are not allowed to convince or implore other people to donate to political campaigns and causes. This applies when one is on the clock.

 

On the Clock vs.  Off

 

A federal employee’s public life should be separated from activities like supporting political parties and candidates. The Hatch Act Social Media Quick Guide stipulates all the instances when an employee is allowed to engage in political activities. According to the new guidelines, an employee that is away from work can post about their support for a particular party or candidate.

 

Also, they can even share with their friends or followers about their involvement in fundraising events for their favorite candidates or parties. However, the employees are prohibited from such activities while on the clock or at work. Law enforcement agencies and the intelligence department are completely forbidden from such activities while on or off the clock.

 

Warnings to Members of the Trump Administration

 

Members of Trump’s administrations like the United States ambassador to the United Nations and the White House Director of Social Media have in the recent past received warnings from the Office of Special Counsel for violating the new guidelines. Apart from warnings, other punishments that one can receive include; a civil penalty of less than $1000, letter of reprimand, suspension, debarment from federal service, or removal from federal service.

Why You Should think Divorce When Married or Getting Married

 

Federal employees or individuals that have plans to marry a federal employee should begin thinking about other things apart from honeymoon locations and wedding guest lists. Thinking divorce in such a moment might sound like a crazy idea, but it is just a matter of being practical and proactive.

 

Nobody gets married expecting a divorce, but the reality of the matter is that your marriage can come to an end at some point. The following is a true story of what can happen when a federal employee divorces a partner;

 

A federal employee divorced his wife in 2001. His wife agreed only to receive part of the deferral annuity during divorce mediation because her ex-husband was sick and in need of money. In this agreement, his son from a previous relationship and the ex-wife would not receive full benefits of is FEGLI life insurance plan.

 

She argued that the partial FEGLI benefit should be calculated based on what she would have received as survivor annuity over time. According to the court judgment, the ex-wife would receive verification of life insurance that includes 43.29 percent ($200,000) of the FEGLI. In this case, the assignment would be irrevocable.

 

A Designation of Benefits with a stamp for the Office of Personnel Management was given to the ex-wife in 2001 when she claimed that she only had the divorce decree and the form. The two rarely spoke to each other in the next ten years. He later died, and the ex-wife only learned about the death after one year.

 

When she visited the OPM office to claim the FEGLI benefits, she was told that someone had already claimed the benefits. She also learned that there was a change of designation in 2003 and she would only get the “death packet’.  The OPM told her to present legal documents indicating that she was another beneficiary.

 

However, she had to prepare for a fight with the insurance company as the OPM had come up with new tight rules concerning annuity payments as a result of divorce. He would face access issues with the possibility of missing divorce records.  In fact, it turned out that her file was not present and this meant that the ex-wife would not find the going easy.

 

Divorced spouses have to pay full premium to receive life insurance, survivor annuity, or the federal health insurance plan (FEHBP). Therefore, it is important to discuss such benefits while still married to avoid possible complications.

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