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February 23, 2020

Federal Employee Retirement and Benefits News

Category: Articles


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MedicareThere are probably more than 256 different plan choices within the Federal Employees Health Benefit (FEHB) Program, but every Federal employee cannot participate in every plan.  The plans may be available based on the region or jurisdiction you live in.  Most Federal workers will have a choice of at least 10 to 20 plans to choose from.  It really is not all about the number of carriers from which you have the option of selecting, but what plan suits your needs including affordability.

Although the plans offered via FEHB are highly affordable given non–Federal offerings, it remains wise to carefully evaluate what your earnings can afford.  The FEHB is a shared-cost program between employee and employer.  There are no Federal plans that pay the full cost of coverage for the employee or the annuitant.

Medicare is the primary for annuitants and FEHB is the primary for active Federal employees.  There is an exception to active Federal employees we should mention.  As of 2014 Members of Congress and certain members of the Congressional staff are no longer eligible to enroll in plans offered under the FEHB Program as active employees.  If members of the group enroll in a program offered via SHOP (Small Business Health Option Program) exchange they remain eligible for the employer portion of the contribution for coverage.

OPM is charged with overseeing and administering the FEHB Program and has statutory requirements to enter into contractual agreements with carriers that offer comprehensive health care services for Federal employees retired and active, except under certain conditions as outlined in the Health Benefits Manual for Members of Congress and Certain Congressional Staff.

P. S.  Always Remember to Share What You Know.

Dianna Tafazoli


Federal employeesIt is nearly here – an enrollment type that fits you.  Not every employee needs Self only or Self and Family.  The world is changing and there are many family types and categories that describe what we need in health care and so many other venues of our lives.  Many organizations outside of the Federal government have long had the category of Self Plus One offered to its employees.

I recall negotiating a benefits plan for a large private organization a number of years past.  It was my intent to do a complete overhaul of the old benefits program because it was costing employees too much money.  The proposed overhaul required meeting with and researching the services of a number of carriers in an attempt to find what would benefit our workforce.  We had a number of young employees of child-bearing age and they were a part of the new and emerging family dynamic – single parent with a child and they needed a coverage type to address their status.

I found the Carrier and we implemented the new plan.  I remember the happy workforce and cheers because they knew how much the organization valued them.  We heard their voices and we acted.  If there was such a coverage type in the market, we were determined to find it and find it we did.  There is quite a cost savings between Family and Self Plus One.  The Office of Personnel Management has announced that the coverage of Self Plus One will be effective on January 1, 2016.  Therefore, the annual Open Season starting November 9, 2015, will include the new enrollment type in the available choices.

Federal employees need to pay close attention to this option in the event it is an option that will better serve their individual needs.  Don’t just let Open Season come and go without really looking into what might be a new and improved service with your current carrier or perhaps another carrier.  Sometimes complacency can result in not getting the kind of information needed to set you and your family on a more productive path.

P. S.  Always Remember to Share What You Know.

Dianna Tafazoli


BENEFIT AND RATE PROPOSALSCalling all Federal employees active and retired.  This is where you can make a real difference.  Each year the Office of Personnel Management sends out a Call Letter to Carriers who desire to apply or reapply to provide services to the largest workforce in the world via the Federal Employees Health Benefit (FEHB) Program.  The annual call letter articulated and set-forth a number of policy goals and initiatives for the 2015 FEHB Program.  This is what OPM is prioritizing for 2015:

  1. Optimization of the delivery of prescription drug benefits.
  2. Enhancing wellness programs.
  3. Advancing quality of care.
  4. Ensuring mental health parity.
  5. Aligning the FEHB Program with the Affordable Care Act.
  6. Continuing to encourage porgrams and benefits that promote enrollment in Medicare Part B.

OPM encouraged the submission of innovative proposals for 2015 that would not simply contain cost but add value to the delivery of services promoting a quality of care to improve enrollees’ health.

Ok, this is where you come in.  OPM issues the mandate of what is expected from carriers.  The only real and substantial data to determine performance by carriers has to come from you.  How do you rate the services you are getting from your carriers?  It is important that you communicate the kind of services you are receiving from you carrier to OPM because you are ultimately the rater of your carrier’s performance.  Take note of the priorities listed by OPM and maybe you have somethings you’d like to see OPM prioritize – let them know.  OPM works for the Federal workforce and they do a good job at surmising what benefits you need based on the market, but you are the best resource to let OPM know what you need and what you want.

You are certain to never get what you want if you don’t have your say.

P. S.  Always Remember to Share What You Know.

Dianna Tafazoli


FEHBThe Office of Personnel Management (OPM) has a strict set of standards that allow carriers to participate in the Federal Employees Health Benefits (FEHB) Program.  The Office of Personnel Management is invested in making the best health care decisions available to ensure the health and safety of the Federal workforce, their families and retirees.  As such the FEHB Program only contracts with health benefits carriers that offer a comprehensive line of medical services to include doctor’s office visits, emergency care, hospitalization, prescription drug coverage and the treatment of substance abuse and mental illness.

The Office of Personnel Management is strictly prohibited from contracting with companies offering limited services such as dental, vision, prescription drug plans, supplemental insurance and disability insurance.   OPM also does not consider partnering with fee-for-service carriers.

The Office of Personnel Management is vigilant in its efforts to see where there seems to be a gap in services or states deemed to be classified as a medically underserved by the Department of Health and Human Services (HHS).  Some of those states include South Carolina, South Dakota, North Dakota, Alabama, Illinois, Louisiana, Arizona, Idaho, New Mexico, Wyoming, Oklahoma, Mississippi, Missouri and Montana.

OPM further invites applicants to submit applications who are qualified by HHS, Centers for Medicare and Medicaid Services (CMS) as Federally qualified or are an approved Competitive Medical Plan (CMP).

P. S.  Always Remember to Share What You Know.

Dianna Tafazoli


Office of Personnel Management

SSSGs are defined as a comprehensive medical plan’s two employer groups that as of the date specified by the Office of Personnel Management in the rate instructions have a subscriber enrollment closest to the FEHB subscriber enrollment and use any rating method other than retrospective experience rating and meet the criteria specified in the rate instructions issued by OPM.

This definition given by OPM is the method used prior to the establishment of the Medical Loss Ratio which seems to offer greater accountability and transparency as mandated by the Affordable Care Act.  The rate structure of the group could consist of the total self and family contract enrollment, or the total self, couples, and family contract enrollment or some other total largely dependent upon the rate structure of the group.

Groups that enter into contractual agreement with OPM to provide health care services via the FEHB plan may be a similarly-sized subscriber group including government.  There are exceptions to who may provide services.  The following groups are excluded: Groups consisting of the carriers own employees; Medicaid groups, Medicare groups, and groups that have only a stand alone benefit such as dental only; Groups the carrier rates by the method of retrospective experience rating; A new group in which the carrier first contracted with between July 2, 2005 and July 1, 2006; A second year group that started its second contract year between July 2, 2005, and July 1, 2006 that normally would be rated by adjusted community rating; and A purchasing alliance whose rate-setting is mandated by the State or local government.

It is important to understand terms that are used when discussing any issues with you that impact what kind of decisions you will make for you and your family.  It is also valuable to know how the Office of Personnel Management (OPM) is managing and negotiating the most important benefit you will ever need or have – one that will look after your health.  Good health is wealth of an untold magnitude.  Never leave what is most important to you totally in the hands of anybody if you have any say.  A great majority of the time we do have some say, we simply fail to exercise our right to be included.

P. S.  Always Remember to Share What You Know.

Dianna Tafazoli


MEDICAL LOSS RATIOThere are often words and phrases tossed about when we hear talk of benefits and other things that matter to us we don’t completely understand.  Medical Loss Ratio is one of those items very important in understanding overall our Federal Employees Health Benefits (FEHB) Plan.  According to the Centers for Medicare and Medicaid Services (CMS), many insurance companies spend a large portion of premium fees paid by consumers on administrative concerns such as executive salaries, perks, overhead and marketing.

The Affordable Care Act (ACA) is requiring more accountability and transparency from insurance companies.  The Act requires that insurance companies meet a minimum spending standard on medical care or provide rebates to their enrollees when they fail to meet the standard.

The largest portion of the premium paid mandates that spending is for clinical services and quality improvement where 80 percent at a minimum or 85 percent of the premium is spent on medical care.  Again, failing to meet that standard will compel  insurance companies to make rebates to consumers.  The provision rebate became effective in 2012.  Insurance companies  also due to the Act are held to stricter regulations when it comes to premium increases passed on to consumers.

P. S.  Always Remember to Share What You Know.

Dianna Tafazoli


health care benefitsAre Federal employees losing their health care benefits?  Not really, FEHB is still in place.  However, some of the Health Plans currently offered to Federal employees will not be around in 2015.   The Office of Personnel Management (OPM) has announced that 5 health insurance plans are dropping out of the Federal Employees Health Benefits Program (FEHB).  Employees covered under those plans will have to evaluate other plans for coverage.

The plans that will be dropping out of the program are Optima Health Plan  and Anthem.  These plans will no longer offer coverage in Virginia.  Coventry Health Care will also no longer be a part of the FEHB coverage discontinuing services in Maryland.  Total Health Care USA will stop service in Michigan followed by United Healthcare of the Midwest discontinuing service in Missouri and Illinois.

There are a number of new plans that will be joining FEHB providing a continued and vast array of plans from which to choose.  The most significant number of new plans joining FEHB will be HMOs offering service plans in Texas, Virginia, Florida, Maryland, Pennsylvania, Michigan, Illinois, the District of Columbia and Georgia.  This is great news for OPM inasmuch as one of its health care goals is to expand the number of health care maintenance organizations (HMOs) in the Federal plan throughout the nation.

Carriers are traditionally rushing to participate as providers of Health Care Benefits to the largest workforce in the world.  However, there is speculation that the new pricing method might have something to do with participation.  If I had to wager a bet, I would say it has more to do with enrollment numbers.  The number of employees enrolled in the plans that are dropping out of participation probably did not have the kind of participation anticipated.  For example, Anthem’s services were primarily offered to Virginians not living within Northern Virginia.

The bottom line is that OPM has always gathered a number of high quality carriers from which Federal employees could choose.  OPM will continue to offer that kind of quality service for the Federal workforce.  Some carriers are dropping out of the plan but OPM has no shortage of great health care coverage for individuals and their families within the Federal government.

P. S.  Always Remember to Share What You Know.

Dianna Tafazoli


PHASED RETIREMENTFederal employees who qualify and are approved by their agencies may begin submitting applications to participate in Phase Retirement in November.  Who actually can participate in Phased Retirement is really agency driven.  It might be another few months before there is enough data available to gauge interest in the program.  Many HR professionals in the Federal government and outside of the service feel that the program will meet a slow death.  Agency personnel officers are not bothering to train staff or think beyond what they’ve heard because they do not believe in the survivorability of the program.

It would be interesting to know if OPM did an interest survey of Federal employees prior to implementation to see what the numbers looked like.  There does not really seem to be an incentive attractive enough to draw a crowd.  However, I could be wrong and I hope I am.  OPM has stated that one of the primary purposes behind Phased Retirement is to protectand preserve institutional knowledge.  I have long said that if that is in fact the real reason behind Phased Retirement then the program should have never left its place of inception.  The harnessing of and the protection of institutional knowledge is a critical aspect of succession planning whose responsibility lies squarely in the hands of management.

When a culture of promoting indispensability has been cultivated and grown by the Federal government, how can institutional knowledge be passed on.  Federal government workers as do workers in many employments, public and private, feel that they must not share knowledge in order to keep their jobs.  To exhaust resources to build a program that has been around since the Federal sector was established, just not utilized, is a massive waste of resources, including time, energy and effort.  Change the Performance Management System – and incorporate the passing on of knowledge as a performance element, then the whole idea of Phased Retirement would have just been making small talk.

P. S.   Always Remember to Share What You Know.

Dianna Tafazoli


NEED IN RETIREMENTHave you thought about what you will need in retirement?  Will your needs in retirement be the same as they are now?  It is rather difficult to predict the future.  Research, has shown however, that the average retiree will live some 30 years after retirement.  Will longevity create another layer of poverty in America?  Poverty may be too strong of a word.  If Americans are not prepared financially to live an additional 30 years or more in retirement, they may find themselves without enough resources to take care of themselves.  If that is in fact a possibility, who will take care of that increasing population?  The burden must fall somewhere generally – state and national government.

It does  not appear that organizations, companies or even the country as a whole are putting the kind of serious thought into retirement as they should.  There is not adequate timely training and counseling of employees.  The rush to usher employees out of the door and into retirement is not enough.  The same manner in which we recruit to retain a diverse and high-performing workforce, by equal investment, we must strive to prepare a financially well-prepared retirement population that will not lend to the economic strain of the nation.

I am certain none of the citizens of this great country want to see the portrait of  many of our military service personnel displayed over and over again.  Brave men and women serve in the military, losing their climbs and often times their lives to return home to face homelessness, joblessness and poor or inadequate health care provisions.  If we do not peddle fast to reposition and restructure the way Americans are prepared for retirement, we will realize a similar state of despair.

Every individual’s retirement needs will be different.  One thing we do know is that every individual will need enough money and resources to outlast their lives.  They will need a plan and the commitment and dedication to implement the plan and stick to it.  Individuals will need to understand that they may have to give up something now in order to live a secure retirement.  Besides shelter, clothing, food and a depiction of Maslow’s hierarchy of needs, every individual will need to be emotionally and psychologically ready to live in retirement.  It is different living in retirement than it is living in an active work status.  When individuals come out of the workplace in retirement, they are not the same as they were when they went into the workplace.  Many things have changed.  Youth has been replaced with maturity some call old-age.  Small earnings have been replaced with larger earnings.  No debt has been replaced with perhaps large debts and mortgages.  But the most important change of all is the growth of a pension plan and other savings and investments that must now outlive the many years of the life that have left to live.


P. S.  Always Remember to Share What You Know.

Dianna Tafazoli


SMALL TO OFFER A PENSION PLANNot every American works for the Federal Government or some other big corporation, many work in small businesses who may think they can ill-afford to help their employees plan for retirement.  Employees can be assertive and ask their small business owners to consider setting up a retirement plan.  There are a number of ways to help employees prepare for retirement.  Many of these employees are dedicated to their employment and really enjoy working in a small-business with a family atmosphere as opposed to a huge organization.  However, they also desire to have good benefits similar to what their counterparts enjoy in larger companies.  Perhaps, they cannot have exactly the same benefits profile, but they can have a retirement plan.

There are many types of plans and savings options employers can offer to employees that will help both employer and employee.  It is much too risky for employees to work in organizations for 20 years plus and have no means towards saving for retirement except via Social Security.  What the average person will receive from Social Security will hardly be enough to support them throughout their retirement years.  If you don’t have any kind of plan at your place of employment, take the initiative and speak with your coworkers about approaching your employer.

Owners of businesses are always more apt to listen to a proposal or a recommendation if there is some research to support the proposed recommendation.  Do some research about what kind of retirement plans small businesses similar in size and scope to the place where you work are offering employees.  Gather as much information as possible including some cost data and how both employee and employer can contribute to the plan.   You never know what is possible until you ask.

P.S.  Always Remember to Share What You Know.

Dianna Tafazoli


RETIREMENT SAVINGSYour retirement savings are earmarked for retirement.  Those savings should not be looked upon like a revolving door savings accounts.  There are people who do have savings accounts that they literally use as checking accounts.  When you use your savings account in that manner, there are a number of things happening.  One you may be putting too much away in savings and leaving your expenses uncovered because you are trying to save larger sums of money.  Second, you might be overspending and not living on a budget.  A budget cannot be effective when it is only in your mind, it must be formalized.  You can use an automated on line tool and if that is too high tech for you, the old fashion pen and paper will do just fine.

Formalizing a budget, putting something on paper makes it real.  Having a budget fine tunes what you have coming in and what must go out.  If you start out with your expenses being more than you income, then adjustments must be made quickly because that is simply a no win situation.  Normally you may not be able to change your rent or mortgage circumstances immediately, but there are some other things that can be changed.  Perhaps, you are eating out more than you can afford to – stop it.  You may be doing too much shopping for clothing and other items that are non-essential.  There is no sugar-coated answer that will help you –  simply stop it.  If things are just too out of balance you may even have to think about making adjustments in your living arrangements.

When your expenses outweigh what is coming in on the income side, you are riding a downward slope.  Although the slope is headed down, you can turn it around.  The best way out is to stop living beyond your means.  It is not important what others think of you or about you when it comes to money and managing your finances.  Many Americans rush to own a Mercedes Benz or some other luxury car because of what friends and neighbors are driving or some social group you are a part of.  Those views of yourself and the world will  not help you to live comfortably in retirement.

Analyze your situation carefully and honestly.  Determine what you can do and what you cannot do, not what your friends and neighbors are doing.  They do not fit into your scenario because reasonably speaking they are not going to share their resources with you.  After evaluating your situation make every effort possible to save some money.  If you can only save $5.00 per month and never touch it, then do it.  Saving a little and not using it is far better than saving more than you can afford and withdrawing the funds just as soon as you deposit them.

P.S.  Always Remember to Share What You Know.

Dianna Tafazoli


various retirement accountsI only hear from some of my friends when they are all tangled up about what to do about so much to do.  I know they love me and I love them too, so no offense because I only hear from them when they have so much to do and need to know what to do. I got home last evening and saw one of those friends’ name and number on the caller-ID.  Just as always, I cared enough about her to pick up the phone to see how things were going.  She had a number of questions about what to do with her various retirement accounts accumulated via her work in a number of jobs.  We discussed what she had and her plans for the future.

Her divorce was now final and she was coming to grips with what had been a very painful ordeal.  However, she had good news. She had met a man during her first year as a divorcee and was now engaged.  She had never been so happy in her life.  The new husband-to-be was not unfamiliar to her.  She had known him when she was about 16, but neither had paid much attention to the other.  Now their children were grown and they had both survived a divorce and were looking towards retirement.  A couple of trips back to her hometown in Maine, had her planning a move in the next 3 years when they would be married.

I have over the years tried very hard to direct her to a good financial advisor.  She said, “I tried that but it just doesn’t feel the same.  They don’t know me like you know me.  No matter what stupid stuff I have done with my finances or with my life, you only say – how can I help.  I trust your counsel and it has served me well.”  Of course, I was very pleased that I could help my friend, but what she said also gave me some food for thought.

I have been doing training seminars for Financial Advisors for sometime now and for this very reason.  Federal employees need financial advice and they need individuals who thoroughly understand the nuances of the Federal Employees Retirement Systems.  There are a lot of rules, regulations and guidelines that these employees need to understand early in their careers so they begin to prepare for a smooth future.

We stayed on the phone for about 2.5 hours with my last advice to her being — don’t have your resources spread out over too many accounts because first and foremost it makes it difficult for you to manage and keep on top of things.  Second the majority of your money needs to be in a qualified defined contribution plan that cost you the least in administrative fees. We also talk about IRAs.  Your risk tolerance is very low, so there is no need for you to delve into the rise and fall of the market.  You intend to retire in 3 years so play it safe by protecting what you have.  There is no reason for you to play the game of get rich quick by making investments that may or may not give you a return on your money.  The economy is still not where it needs to be and compounding works best with the more time you have.

She has a pretty decent nest egg all things being equal and from where she sits, I think she will be fine.  She is giving up the big house and moving into a one bedroom until she makes the final move to Maine.  There is no need to keep the big house with the huge mortgage and all the upkeep expenses.  She is there rambling around in that big house alone and getting rid of it is a wise thing to do in her case.  There is no splitting proceeds between she and the ex-husband.  He wanted her to have the house in the divorce settlement and it is totally paid off.

She is starting anew and her future looks pretty bright.  My next call from her will be to apprise me of the wedding details.  I will pack my bags and fly off to Maine to celebrate the next half of my friend’s life that calls me when she needs to know what to do about so much to do.

P. S.  Always Remember to Share What You Know.

Dianna Tafazoli


Federal GovernmentIt’s Open Season time.  Don’t let Open Season come in and slip away.  It is not only Open Season for the Federal Government but for individuals seeking coverage in the market also.  If you apply for health care coverage during Open Season, it is not nearly as difficult as it would be otherwise.  In many instances, if you do not apply for health care coverage open season you will have to wait until the next open season.

Try getting all of your business in order now so that if you need health insurance coverage you will not have to wait until the next period which will be next year.  Open Season generally comes once a year for health insurance.  Often individuals on Medicare don’t think of themselves as being part of Open Season, but you are.  If there are changes you need to make in your Medicare plan or make adjustments to coverage now is the time.

It would be very unfortunate that you find out a few weeks after Open Season has closed that you either needed coverage or needed to make adjustments.  There are so many things happening around this time of the year that it is easy to let something important slip right through your fingers.  The holidays are quickly approaching and for some little folks, a very special holiday is already here – HALLOWEEN.  Parents are busy getting trick-or-treat provisions in place and soon after that, it is time for Thanksgiving and before the turkey can be put away, it’s Christmas.

Sing a few carols and it is a brand New Year.  In between the busyness of the holiday is also the end of the semester for college and university students.  They are scrambling to finish up final papers and prepare for final exams while ringing up their parents to get them home for the holiday.  It is a very busy time and it makes my head spin just writing about it.  Just don’t forget about Open Season.  The holidays won’t be so holly and jolly if you do.  Take care of your health and your health will take care of you.

P. S.  Always Remember to Share What You Know.

Dianna Tafazoli


RETIREMENTThe answer is no.  If a Federal worker has retired and decides to rejoin the Federal service, that individual can do so as a reemployed annuitant.  The Phased Retirement program is geared towards individuals eligible to retire having met all of the age and service related requirements but have not yet left the service.  Individuals who have fully retired receive an annuity check based on their years of service and age with those provisions unique to either the Civil Service Retirement System (CSRS) or the Federal Employees Retirement System (FERS).

When an individual who is retired and now classified as an annuitant returns to work the classification becomes a reemployed annuitant.  There are certain rules that apply to the new status.  Under normal circumstances the salary received by the reemployed annuitant will be offset by the annuity.  The worker will not receive both a full time paycheck and a full annuity during the period of reemployment.  When the reemployment period ends and adjustments have been made, the reemployed annuitant who has reclaimed his or her previous annuitant status will receive their full annuity.

There are provisions by which the hiring agency can ask OPM for a waiver of this requirement.  I have not seen a case where the waiver for this purpose has been granted.  Returning a retired Federal employee to service should not create an additional, costly expense to the Federal government.  There should be a fair compensation for the employee, but not something that resembles double-dipping.  The off-set I believe is appropriate.

There are currently two ways in which persons who are retired or contemplating retirement can be a part of the Federal service – Phased Retirement or Reemployment Annuitant status.

P. S.  Always Remember to Share What You Know.

Dianna Tafazoli


RETIREMENTAlthough the Office of Personnel Management is still issuing rulings regarding the policy regulations of Phased Retirement, applications can be submitted in November all things being equal.  Many of the policy guidelines that have already been issued by OPM regarding Phased Retirement do not encompass many of the procedures agencies will be held accountable for.

OPM has promised to provide broad guidance to agencies in helping them implement the Phased Retirement program inasmuch as agencies must decide whether an employee can participate or not.  If the agency does not sanction the employee’s participation, I have not read any regulations that speak to appeals rights.  For now it appears the agency is the final authority on whether an employee can participate in the program or not.  This is certainly not a process that should be otherwise, because the employees are still under the jurisdiction of their respective agencies.

Federal employees only become wards for lack of a better word of the Office of Personnel Management when they retire.  We mentioned previously that retirees are not eligible to participate in Phased Retirement because these individuals according to statue will receive half of their salary and half of their annuity.  Regular retirees do not receive any of their salary, just an annuity either from their employment as FERS or CSRS employees.

P. S.  Always Remember to Share What You Know.

Dianna Tafazoli


KEEP WORKINGThat is a very interesting question and one most of us think we know the answer to.  Staying in the Federal service is more of a need than a want.  Many workers just don’t have the financial readiness to retire and live the kind of life style they have imagined.  Those individuals who are eligible to retire once enjoyed the benefit of receiving a full retirement check while working as Federal contractors for big consulting firms.  However, due to the sagging economy that pretty painting is fading.  Contractors are simply not getting the big contracts anymore because of cutbacks.  In many areas of the Federal government although there is a need for outsourcing, the dollars are just not there.

In that vein many Federal employees who were looking for that land of milk and honey find themselves still waiting for a biweekly paycheck and hoping that a Reduction-in-Force (RIF) is not in the not- so-distant future.  Individuals eligible for retirement are given a type of consideration during a RIF that places them at the top of the list to leave the organization.  Financial concerns is a big part of decision-making in most families.  It is not as easy as perhaps previous years to think about retirement and when to do it.  Many workers in the Federal government simply fear that they will not have enough resources to live on and that those resources will not outlast them.

This worry is particularly heavy for Federal workers covered under the Federal Employees Retirement System (FERS).  Their defined benefits plan (pension plan) is not as lucrative as the old Civil Service Retirement System (CSRS).  If FERS employees do not maximize participation in the Thrift Savings Plan (TSP) they will not be in a good position to realize their retirement dreams.

P. S. Always Remember to Share What You Know.

Dianna Tafazoli


COST OF LIVING ADJUSTMENTThere will be a Cost-of-Living Adjustment (COLA) in 2015; perhaps not as much as might have been expected but an adjustment nonetheless.  Retirees, individuals receiving Social Security and disabled Veterans will receive a 1.7 percent cost-of-living adjustment.  The COLA is based on increases in the Consumer Price Index (CPI).  When prices in housing, clothing, medical costs, food and other factors from one quarter (July,August, September) compared to that same quarter in the previous year, then benefits also increase resulting in a slight increase for Federal retirees, Social Security recipients and disabled Veterans.

The economy has still not recovered which means more and more Americans are looking for ways to manage their resources.  The cost of everything we need to survive – housing, food, clothing, transportation, medical costs and child care – is steadily increasing.  Retirement checks, Social Security checks and Veterans checks for disability just cannot keep up.  Families are finding innovative ways to make ends meet.  One familiar theme in the American culture today is generations of family members are sharing housing; thereby all other associated expenses.

Having grandparents in the home where there are small children saves on child care and provides a safe environment for the children allowing parents to work without the hassle of trying to make it to day care centers on time to avoid the extra late fees.  Families in past times lived together and shared resources.  History repeats itself and this is a time that that kind of history is worth repeating.

P. S.  Always Remember to Share What You Know

Dianna Tafazoli


Just when I thought we had it all worked out and knew the reasoning behind Phased benefits a Federal worker added a new twist to the subject.  Having informal forums to tap into the pulse of the people that really matter is priceless.  Although I have been at the level of executive leadership for more years than I care to reveal, I have always known that the real knowledge of Human Resources and Human Capital Management rested with the rank-and-file.  Individuals who work inside of organizations below the level of executive management are much smarter than those few in the Executive Suite.

Executives are great characters for show and tell and all things dismissed from the huge realm of reality, how it actually is.  We deal with statistics, trends, bottom lines and the politics of correctness so that we will be invited back to the country club to nibble on watercress sandwiches and throw back a few glasses of sparkling water.  It is  the folks back at the water cooler and the company lunch rooms really are in touch with the pulse of the organization.  Have you ever noticed that in the end when a company’s face is about to have a public appearance without makeup that is the CEO of the organization who suddenly announces he is going to step-down to spend more time with his family.  It is never a member of the rank-and-file who has decided the family needs a little more ME time.  It comes down to those who are best at show and tell.

Well along that vein, here were a group of learnt executives speaking with great erudition about why Phased Retirement.  Simply put, its implementation had everything to do with protecting and preserving institutional knowledge by holding on to more seasoned workers a little while longer.  The merit of succession planning had been realized just prior to the Generals hanging up their boots.  Not so, said the true intellectuals, Phased Retirement has absolutely nothing to do with protecting institutional knowledge, but rather protecting and securing the jobs of a few good men in the Executive Suite who desire to hold on to their money and power a little longer.

In addition, the true intellects also said that the paradigm in terms of the demographics in the Executive Suite – policies, guidelines and ideas would never change because the same members invited to the country club now would be the same members invited back each time there is a soiree.  No executive I know would have delved into this line of thinking.  I don’t know whether it has merit or not, but it certainly makes you put on your thinking cap.

P. S.  Always Remember to Share What You Know.

Dianna Tafazoli


TWIST ON PHASED RETIREMENTMany organizations use claims data to determine what kind of benefits package is best for the organization.  When employees hear about their places of employment looking into the kind of claims they file, then they get a bit antsy because it feels like an invasion of privacy to the workforce.  However, the strategy is used to review the claims and see where prescription drug coverage could be enhanced and help with structuring the entire benefits program to better fit the needs of the workforce.

When employees are not on-board with such tactics, it normally boils down to a communication issue.  If employers let employees know why a certain course is being taken, then they are more likely to buy-in and therefore greater participation is apparent.  Policies and strategies cannot be made in a vacuum eliminating the very people the policies are being made for.  There is certainly a way to include employees in more processes than they are included in.  Such actions set up a dynamic of them against us as opposed to really building a solid team inside of agencies invested in the goals and objectives of the enterprise.

There is nothing wrong with employees knowing what is going on inside of an agency to the greatest extent possible without compromising confidential information.  It is proven that people do better in terms of performance when they feel part of the organization’s mission and not just a body that drops in for 8 hours and leaves routinely.  Knowing why ones’ job is important to the agency’s mission is key to increased productivity and loyalty toward what the organization is trying to achieve.

Many employees within agencies have not the slightest notion of what the agency’s core values are and how they promote internal and external views and more importantly secure the public trust.  It is an indictment of management in the Executive Suite when employees work for an agency for 20 to 30 years and never have a sense of what the agency’s core values are.  This is not only a break in communication, but a huge gap – a divide that prevents the organization from ever reaching its true potential from management to the rank-in-file.

Using whatever tools necessary to structure a benefits package that is not only competitive within the market but offers employees and their families the kind of comfort and protection they can depend on in a time of crisis is good and necessary management.  Apprise employes about what is going on in the organization and the greater majority will support the efforts of management.

P. S. Always Remember to Share What You Know.

Dianna Tafazoli



Unfortunately all life insurance advisors are not equal in their knowledge and that can be dangerous for any consumer seeking information from a professional.  A young woman came to a discussion group on retirement preparedness.  She was so  jaded because of some information she had gotten from an insurance representative.  The young woman told her story of which we will retell here in this article.  However, all things being equal, since we don’t have the representative’s side of the story we will simply present the information given by her and offer the best solution we know.

The young lady was in the market for life insurance.  She really didn’t have an understanding of term versus whole life insurance which is nothing unusual.  This is a synopsis of her story:

                 ” I went to an insurance guy my family had known for a number of years in order to make certain I had the kind of life insurance needed to take care of things in the event of a disaster.  He told me never to purchase any form of whole life insurance, but that term life insurance was what I needed.  I didn’t have a family of my own at the time.  I was 25 years if age and really wanted to get started planning my future.  The representative told me that I would have to pay for whole life insurance for the whole of my life and that term life insurance was for a term and that was what I needed.  He also told me that life insurance was temporary and I should not think of life insurance as something to have long term.  I was told that life insurance’s only purpose is to be replaced by savings.  After my mother passed away using the same strategy as the representative had told me to use, mother did not have the resources to take care of her burial.  Her savings did not replace what she thought a life insurance policy was intended to do.”

Our response to the young woman is that she perhaps did not ask the right questions or the opinion was simply that of the representative.  Some of his points were well taken, but the most significant aspect that was left out of the conversation is – Why do you need insurance and what do you want it for?  Many people assume  life insurance is purchased for the purpose of burying your loved ones and most often it is.  However, for many insurance is an investment or a tool used for collateral, depending on the type of insurance – a potential supplement to income.

It is so important to do your homework so that you can participate fully in unlocking what you need for your future.  Surely she was young enough to have exercised many options when it comes to the purchase of life insurance.

P.S.  Always Remember to Share What You Know.

Dianna Tafazoli

Not affiliated with The United States Office of Personnel Management or any government agency