A federal employee is a qualified individual who serves the federal government. There are many sectors a specific employee can be serving the government in.
Leaving and Rejoining Federal Service by Jay Hunt/by Jay Hunt
Leaving and Rejoining Federal Service: Benefits Retained and Benefits Lost
by Jay Hunt
Jay Hunt of Stratico Retirement and Insurance Solutions is in the business of helping people, and here he discusses how benefits may be affected upon taking leave from the Federal Service.
Recently, we received an excellent question regarding what happens to all benefits when rejoining federal service. Primarily, they wanted to know what would happen if they ever returned and we realized this is something that needed to be covered, so that is what we plan to do today!
Over the years, thousands of federal service workers have gone back after leaving so this is not uncommon. In fact, it is relatively common for all of us in the world to go back to at least one job in our career. Whether we thought the move away would be good for our career or just our bank balance, it is easy enough to return when you realize the truth.
In answering the question, you will have the option to enroll into most of the federal benefits or continue from where you left off, and this includes federal health insurance (FEHB), federal employee life insurance (FEGLI), and likely more. With FEHB, it will be classified as ‘continuous’ for the five-year requirement before then carrying it over towards your future retirement.
FEGLI for Federal Employees Returning to Service
With FEGLI, you will not have an opportunity to change coverage if you rejoin federal service within 180 days of leaving; you will just go straight back onto the same coverage you had before you left. If you left over 180 days ago, you have the option of rejoining the same coverage, or you can start from fresh with a brand new policy.
Furthermore, your annual leave will be calculated using your overall length of service (regardless of breaks) and any sick days taken previously will also carry over. If you withdrew from your TSP before resigning, this cannot be replaced although you will be able to carry on with the same plan and contribute in the coming months and years. If you managed to roll the TSP into a different account, there would also be options to roll this account into the TSP; this includes any qualified gains.
Returning to Federal Service and Retirement Coverage
When it comes to retirement coverage, this will ultimately depend on the time you spent away from federal service and what system you were on before your resignation. For example, you can return to FERS if this was your plan beforehand. If at resignation, you had fewer than five years of creditable civilian service, 4.4% of your salary will go towards the FERS system (this is not affected by whatever you were paying before leaving). As a side note, the percentage payable can increase by 0.5 points if your new position is covered by the law enforcement or firefighter special provisions. If you managed to obtain creditable civilian service time of over five years, your rate of contribution to FERS would remain the same.
With CSRS, you will find the rules to be different because most people are eligible to retire with CSRS; however, there are a few who are not yet eligible due to age. If you were not eligible to retire when you resigned, the following would be true;
- You would be covered by Social Security if your break was larger than one whole year. Unfortunately, your opportunity for the standard CSRS has now gone, but you can choose between FERS and CSRS Offset.
- If your break was less one year, you could choose FERS coverage when you return to your role.
- At the time of leaving, you could have also been CSRS Offset, and you will be offered FERS on your return. However, all of your CSRS Offset years will be counted as FERS service for your retirement.
No matter what retirement system you follow or followed before your resignation, you will not have a problem depositing any money you withdrew before leaving. If you need any other advice, be sure to talk to a finance professional or someone who can help in federal service. If you want to retire with confidence, these decisions could be important so take your time!
Contact Jay Hunt
Stratico Retirement & Insurance Solutions
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SBA Demonstrates Ineffective Use of Early Federal Retirement Offers/by Admin(2)
Report on Failure of Early Federal Retirement Offers
The failure of the Small Business Business Administration (SBA) to effectively execute the early federal retirement offers was highlighted in a recent report. This report was shared by the Inspector General of the agency. It stated that the effort made by the SBA to reshape its workforce via buyouts and early retirement was unsuccessful in achieving any of the goals it has set.
In fiscal 2014, the SBA had requested the authority to make use of early federal retirement through its Voluntary Early Retirement Authority and Voluntary Separation Incentive Payment program so that it could easily increase the population of early-career employees, address workforce skill gaps and manage budgetary constraints.
Though the three-pronged goals of the SBA were clear enough, it failed in the efforts because of the reason highlighted in the IG report. It states that the plan to implement early federal retirement lacked measurable objectives and included inaccurate information. SBA also failed to act on the proposals shared by a consulting firm that involved changing the SBA’s service model.
During the efforts to hire better professionals, the agency ended up spending USD 2.1 million for employees who chose to retire early. However, even after their retirement, the positions largely remained the same. Through this program, the agency succeeded in vacating only 149 positions overall. Out of those, 54 were filled without making any meaningful changes to the job description or occupants’ responsibilities.
It’s clear that the SBA had failed to implement the program to achieve the desired results, the Inspector General has also shared a bit of advice on the matter.
He suggested that the agency should carry out a report entitled lessons learned in which it mentions the performance of the 2014 early federal retirement program. He also added that the agency must develop procedures to make sure that if any such programs are initiated in the future, they operate as per VERA and VSIP regulations. They should also be in accordance with the guidance shared by the Office of Personnel Management.
SBA officials have agreed with the report. They have also decided that they will implement the recommendations by September this year.
On the whole, it can be seen that though the aims of the early federal retirement program by the SBA were good enough, major flaws were seen in its implementation as the effort to renew federal workforce failed miserably. The positions and job descriptions remained the same even with the new hires which made the entire process quite unnecessary. Other agencies seeking to renew their own federal employee workforce by offering a retirement program would do well to learn from the mistakes made by SBA and not repeat the same themselves. Though SBA has admitted that it has made serious errors and has promised to implement the IG’s recommendations by September this year, it will be interesting to see whether it can do it by September or not,
OPM Catches Up on Federal Retirement Claims/by Admin(2)
Office of Personnel Management (OPM) is trying hard to clear off the backlog in the federal retirement claims and has done well in the last few months. Though the agency seems to be working hard to reduce the backlog since the results of the hard work put in for CLEARING the retirement benefits of each retired federal employee are not visible at a single glance. One has to dig in deep to notice the positive progress the agency has been making. Have a look at the progress to know that OPM is trying its best here.
The Reason for Considerable Progress of Federal Retirement Claims in May 2017
Office of Personnel Management has succeeded in clearing about 3,000 federal retirement claims in May 2017. This has reduced the overall backlog to 16,140 claims which is also the lowest number to be achieved yet in 2017. It was 18,932 in April 2017 which shows an improvement of about 15 percent. The main reason for this considerable progress seems to be the fact that the numbers of new claims filed were lowest since December 2016.
OPM has succeeded in processing nearly the same amount of claims in May that it did in April this year. But it has improved by 161 claims for a total of 8,340 last month. In May, the reputed agency received only 5,548 new claims which is a drop of more than 1,000.
Year on Year Comparison
When one compared the data of federal retirement claims in May 2017 with May 2016, it can be seen that the agency received 23 percent fewer claims but has succeeded in processing 8.4 percent more this year as compared to the previous year numbers. Despite all of this, the backlog is 13 percent more than it was at in May 2016, i.e., 14,035.
Better Speed of Processing
The agency has improved its speed of processing considerably as well, and it has played a pivotal role in curtailing the backlog. In April 2017, the agency had only managed to process 27 percent of the claims in 60 days or less than that. But in May 2017, this number was 44 percent.
The Main Hitch
Though no one can deny the fact that OPM is showing considerable improvement, the main issue remains the same. The agency has not reached the goal which is a backlog of just 13,000 claims. As per the strategic plan for processing retirement applications, if the staff had just 13,000 claims on hand, it will be able to adjudicate 90 percent of all the claims within just 60 days. But this goal seems too far-fetched given the fact that the last time the backlog was at 13,000 or even less than that, it was about one and a half years ago, in December 2015.
Repeating the Past
The latest numbers shared by OPM regarding the processing of federal retirement claims of federal employee shows a similar pattern that has been seen in the last few years. OPM always sees a sudden increase in retirement benefits claims in January and February as people prefer to retire in these months. This sudden increase boosts the backlog considerably, and while the staff works hard through the year to lower it only to see it spike again in the January of next year.
Federal Employee Health Benefits and FEGLI at Retirement – Robb Fenton/by Robb Fenton
If you’re a federal employee who is considering retirement and you are covered by both the FEHB (Federal Employee Health Benefits) program for health insurance and the FEGLI (Federal Employee Group Life Insurance) plan for life insurance coverage, then you may need to factor in what your options are in terms of taking these benefits with you when you go. This is because, while there are ways of maintaining this protection, there are distinct criteria that you will need to meet in order to continue the coverage after you become a retiree.
How to Continue FEHB Coverage After Retirement
In order to be eligible for continuation of your FEHB coverage after retirement from service, there are two primary criteria that you must meet. First, you will need to have retired on an immediate annuity. This means that you will have to have a retirement annuity that starts accruing no later than one month following the date of your final separation from service.
In addition, you will also have to have been either continuously enrolled as an employee or as an eligible covered family member in any of the FEHB plans during the five years of service that immediately preceded your retirement. (It is important to note that it is not required that you be enrolled in the same plan for each of these five years).
If, however, you have less than five total years of service leading up to your retirement, then you will need to have been enrolled in a FEHB plan during all of your time of service since the first opportunity that you had to enroll.
Continuing Your FEGLI Benefits
In order to keep your basic FEGLI coverage in retirement, you will also need to have five years of service. If so, you will have three options in how you may retain these benefits. These include the following:
- 75% Reduction – With this option, a reduction in coverage will begin the second month following your 65th birthday, or the second month following your retirement, whichever occurs later. Then, the coverage will decrease by 2% every month until it reaches 25% of its original amount, where it will then level out.
- 50% Reduction – With this option, you can retain 50% of your original amount of coverage. The reduction also starts during the second month after your 65th birthday, or the second month after retiring – whichever occurs later. With this option, the coverage will decrease by 1% every month until it gets to 50% of its original amount.
- No Reduction – With the no reduction option, you may retain the full amount of your FEGLI benefit.
Options for Those Not Eligible to Keep Their Benefits
If you are not eligible to continue your FEHB or FEGLI benefits, then you may still have various options. For example, with the FEHB plan, you will have an extension of 31 days of coverage at no cost to you. Following that time, you can either drop the plan altogether, or convert it over to an individual contract. You may also request a Temporary Continuation of Coverage. This will allow you to continue the FEHB benefits for up to 18 months at a premium cost of 102%.
For the FEGLI plan, you will also have a no-cost 31-day coverage extension. However, after that time period has elapsed, you will only be able to either drop the coverage completely, or to convert some or all of the benefit over to an individual policy and likewise pay the premium out-of-pocket.
More from Robb Fenton
Federal Employees Share Vital Opinions in OPM’s FEVS Survey/by Admin(2)
OPM has disclosed the full results of the FEVS survey taken by thousands of federal employees. The results share the long term plans of the workers, their opinion of the senior leaders and supervisors and their willingness to do extra for the job. The survey also highlighted the employees’ opinion on accountability, which has been a pain point for OPM for a long time. It is vital to mention the OPM decided to make comparisons of agencies by size by dividing them into categories like large, small, very small, etc.
Long Term Plans of Federal Workers Shared via OPM’s Survey
The data disclosed by OPM said that about 68 percent federal employees didn’t have plans to leave the government. Around 6 percent were planning to retire while 18 percent were looking for another position within the federal government. Most of the employees confessed that they would be able to retire in about 5 years.
Senior Leaders Perform Better
This year, about 52 percent of feds said that the agency leaders have high standards when it comes to honesty and integrity. It’s a two percent increase from last year. About 55 percent workers also admitted that the senior leaders were showing support towards programs that supported better work-life balance such as telework and flexible schedules. This percentage has also increased by two percentage points as compared to last year.
This criterion also showed a growth of 2 percentage points from last year as 66 percent of the feds said that their supervisors support their work development.
Around 82 percent of the federal employees have stated that they are held accountable for achieving results. Only 29 percent stated that poor performers are dealt with rightly in their agencies. About 34 percent were sure that their agencies were recognizing differences in workers’ performance in a right way. When it comes to awards at work, about 41 percent said that awards are dependent on how well an employee has performed.
When asked about the willingness to put in extra hours or do extra work to get the job done via the survey conducted by OPM, about 96 percent of federal employees agreed to the fact that they are okay with putting in extra work or hours for the sake of getting the job done. It should be noted that it is the highest government-wide score of any question that was asked in the survey.
Retirement Benefits Savers Get a Gift from IRS/by Jeff Boettcher
The Internal Revenue Service of the USA has given a special gift to all the retirees who have some retirement benefits saving. It has allowed them a chance to explain why they didn’t stick to the 60-day deadline while moving their money from one IRA to another or from a 401(k) to an IRA. Earlier, the retirees just had to pay tax for missing the deadline and they didn’t get a chance to explain the situation. Experts are still advising to make the money transfer online.
IRS reduced the Worry of Retirement Benefits Savers
IRS has considerably made the life of a retiree easier as the rule of moving retirement benefits funds from one IRA to another and from a 401(k) to another within just 60 days cost a lot of money to the retirees earlier and harmed their nest eggs. When a retiree failed to move the funds in time, he or she had to pay taxes for the full amount. If the person moving the funds was 59 and a half years of age, he or she had to pay an additional penalty.
Avoiding the Risk
In order to avoid the risk of paying extra tax, the financial experts advised the retirees to do an online transfer of their funds. Not only it’s very convenient but it’s quicker too. It ensures that the funds are transferred smoothly within a few days.
Some retirees had to pay extra tax because they had a misconception that the account they have moved their funds to a qualified retirement account while it was not the case. Some even made the mistake of losing the distribution check.
The founder of IRAhelp.com and a certified public accountant, Ed Slott says that this move of IRS is a big deal and it will help a lot of people. He says that when people had to pay full taxes due to a small mistake, they lost their tax-advantaged status.
Slott adds that people who didn’t submit the funds on time usually did it inadvertently rather than trying to pull something over on the IRS. He also said that there was a costly appeals process so only a few offenders pursued it. He concluded by saying that online transfer is still the best practice.
IRS has announced that the new rule would be effective immediately and has shared a list of circumstances that allow a person to be excused for not submitting the retirement benefits savings in a new account on time. Some of these circumstances are severe damage to the residence of the taxpayer, death in the family of the taxpayer, serious illness of a family member, a postal error, etc. In such circumstances, the taxpayer must immediately provide a written self-certification explaining why or she missed the window.
Higher FEGLI Rates in 2016 by Kevin Wirth/by Kevin Wirth
Kevin Wirth discusses the Higher FEGLI rates in 2016
If you’re enrolled in the FEGLI (Federal Employees’ Group Life Insurance) program, either as an employee or a retiree, you may have recently noticed that your premiums have increased. This is because the FEGLI plan has changed its premiums for those who are currently enrolled, effective as of the first pay period of 2016.
Although the rise in cost is considered to be “slight” for older enrollees (and in fact the cost for those who are in the younger age brackets has actually gone down), the increase in premium can nevertheless be difficult for some who have not had a pay raise lately, or who are living on a fixed income.
Yet, if you’re planning to cancel your FEGLI coverage due to the higher premium, you may want to consider all of your alternatives prior to moving forward, as well as the financial consequences of going without this important financial protection.
For example, most people carry life insurance so as to ensure that their loved ones will not have to endure some type of financial hardship upon their passing. With that in mind, ask yourself what type of debt you may be leaving behind, such as:
- Unpaid mortgage balance
- Personal loans
- Auto loan(s)
- Credit card debt
- Any business loans or debt
You may also have additional financial needs to cover, such as a surviving spouse and / or dependent’s ongoing income – especially if retirement income sources will be reduced or eliminated upon your passing.
In addition, today, even the cost of basic final expenses can exceed $9,000 in many areas of the country now. This is especially the case when factoring in elements such as a burial plot, head stone, transportation, and obituary notices.
So, while the cost of your FEGLI premium may be rising, the cost of going without life insurance protection could be a great deal more. If this particular coverage is too cost prohibitive, though, there may be other options available in terms of an individual life insurance policy or a final expense life insurance plan.
More From Kevin Wirth:
Federal Employees with Same-Sex Marriages to Benefit from FMLA/by Jeff Boettcher
OPM has recently announced that federal employees with same-sex marriages will now be given the FMLA leaves like employees who have opposite sex marriages. The agency started to amend this rule since 2014 but it has now been implemented across all states.
Supreme Court Ruling that led to Federal Employees Benefit
The change was initiated by OPM only after a Supreme Court ruling of June 2013. In this ruling, the court struck down the Section 3 of Defense of Marriage Act and changed the definition of spouse. It said that the new definition allows federal employees who have same-sex marriages to use FMLA leave like the employees who don’t have same-sex marriages. This final rule was laid out in an April 8 Federal Register posting by the OPM.
The Slow Change
OPM had begun the amendment process in 2014 and it was only then it opened the process to comment. This new ruling of the agency would help in letting go of the sexual orientation discrimination loophole.
Details of the FLMA
The FLMA allows the federal employees to enjoy job-protected and unpaid leaves for pre-defined medical and family reasons. It also offers health insurance coverage during the period of leave to the eligible candidates. The maximum limit of this type of leave is 12 weeks.
The situations in which these leaves are applicable are listed here:
- The placement of a foster child
- The placement of an adopted child
- The birth of a child
- To take care of a spouse or dependent who has a serious health condition
- To take rest when a serious health condition is making the employee unable to do the job
- To take care of the household or its members if the family responsibilities have increased due to a family member’s active service in the military
The federal employees are also allowed to take a leave of up to 26 weeks to take care of a covered service member who is dealing with a serious injury.
Apart from the changes made into the same-sex marriage rules of the federal employees, OPM is also making many other rule changes. These are with regard to the safety requirements for onshore gas pipelines and the regulations for electric power and natural gas contracts. All these regulations would take effect within a time span of 30 days.
Federal Employees with Autistic Children to Benefit from New Policy/by Jeff Boettcher
The OPM has directed the carriers to include Autism Spectrum Disorder in the healthcare and insurance plans for federal employees. It will allow the service men and women to take better care of an autistic child. This new policy also includes retirees and their dependents. This policy is expected to be implemented from 2017.
The Relief for the Federal Employees
This new change comes as a relief for the federal employees who have autistic children and had to spend hundreds of dollars in the therapy till now. In the near future, they won’t have to spend any money as the suppliers of applied behavior analysis therapy (ABA) have increased and the OPM has directed them to help the service men and women via the insurance and healthcare plans.
It is pertinent to add that ABA therapy helps the children with autism spectrum disorder (ASD) to improve their socially significant behaviors such as communication, social skills, living skills, reading, and academics. The therapy has garnered positive results in most cases.
This change is said to be implemented from 2017 and the OPM expects all the carriers to provide medical and clinical assistance to the children of federal employees who are diagnosed with ASD. This step was taken by OPM after they thoroughly monitored research supporting the positive outcomes ABA may lead to for a period of 3 years. They also studied the data on the availability of ABA therapy providers who are qualified and skilled to make the therapy work.
Most of the advocates of Autism therapy have welcomed this effective step recently. This is a welcome move that helps the autistic children to make their own place in society and get help in solving their issues. This is not the first step taken in favor of autistic children. Autism speaks reports say that 43 states have already passed legislations that make it mandatory for at least some insurance plans to cover ABA therapy.
The new policy, if implemented correctly would benefit more than 8 million people who fall under the category of FEHB plans. It is also being assumed that the step taken by nation’s largest employer may prompt private employers to ensure that their employees also receive the APA therapy for children with ASD disorder as part of the health insurance like the federal employees are soon to get.
Retirement and 4 percent/by Matt Pierce
Retirement and the 4% Rule
The financial services industry has been depictive in the past 2 decades or so of the fact that the retired officials of the federal government have a great chance of making their savings outlive them if they align their spending and savings in such a way that they manage to limit their withdrawals to around 4 percent every year to spend on living expenses.
4 percent of Retirement:
Retirement is a phase that is going to dawn upon you as a federal employee, and this 4 percent rule’s inception dates back to the early 1990s and at that time the Federal Funds interest rate ranged from 8.1 percent to 6.24 percent. The interest rates of today have been near or at 0 percent for so long now that realists believe that the 4 percent rule is something that can be considered obsolete.
Nick Besh, who is an investment director at the Wealth management of PNC says that the 4 percent distribution was very achievable when you look at the rates of the past when you could make conservative investments. He believes that now if somebody makes investments in the same manner in money bonds and markets, then they are liable to only getting around 1 percent.
This situation leads to a need to invest more rigorously and fast. There are a lot of factors that come into play when you are deciding on your safe withdrawal rate and some, as mentioned by Nick are: Your life expectancy, market return expectations, timing of the distributions, retirement portfolio size and of course risk tolerance.
These truths are around us for a long time now and to be realistic in the world of today is the only way to survive. Making withdrawals might make your present life happier but post retirement life can get hampered in the process.
FEHB and the 5-Year Requirement by Dan Hartenstein/by Dan Hartenstein
Federal Employee Health Benefits information from Dan Hartenstein
If you’re a federal employee who is covered under the FEHB (Federal Employees Health Benefits) program and you are considering retirement in the near future, there are some things you may need to think about if you want to take your benefits with you after you leave your employer.
When you retire, you are allowed to continue your FEHB benefits – provided that you meet all of the following criteria:
- Immediate Annuity – First, you are entitled to retire on an immediate annuity under a retirement system for civilian employees. This includes a Federal Employees Retirement System (FERS) minimum retirement age requirement. What this means is that if you have at least ten years of service and you retire at the minimum retirement age, or MRA, then your annuity will be reduced for each month in which you are under the age of 62;
- 5 Years of Service – There is also a 5-years of service requirement. This means that you must have been enrolled continuously – or you have been covered as a family member – in any of the FEHB plans, for the five years of services that immediately precede the date that your retirement annuity begins, or for the full period (or periods) of service since your initial opportunity to enroll.1
When considering the five years of service requirement, “service” can refer to the time that you were in a position where you were eligible to be enrolled. In this case, you would not have had to be enrolled on a continuous basis. However, you would have had to be covered continuously by FEHB enrollment.
If you did happen to have a break in your service, the break would not be counted as an interruption in your five years of service, provided that you re-enrolled within 60 days after you returned to Federal service.
Surviving spouses may also be eligible to continue FEHB coverage following either an employee’s or a retired employee’s death. In order to be eligible for this continuation of coverage, the spouse must either be entitled to receive a survivor annuity, or they must be enrolled on a self and family plan as of the date of the employee or retiree’s passing.2
More about Dan Hartenstein
Dan Hartenstein – Financial Advisors Credio
Clinton endorsed by the biggest Fed Union/by Matt Pierce
Clinton endorsed by the biggest Fed Union
Hilary Clinton didn’t surprise many when she started running for President and recently she has been receiving endorsements like she is a real deal. In the past week, the largest Fed Union endorsed her and her run for president and they had nothing but praise for her. She was called a “powerful ally” and a credible figure that could help pave the road that would guarantee that the Fed Union gets all its requests of increased wages, good jobs and the expansion of benefits granted.
Clinton endorsed by fed union:
The union, known as the American Federation of Government employees is a well-reputed entity in the federal hemisphere and they considered the rival Senator Bernie Sanders also before making the final choice. It’s worth mentioning here that the Maryland governor Martin O’ Malley was not even talked about in this regard. Also, the group mentioned that even though they questioned everyone, the republicans didn’t see it fit to reply.
The American Federation of Government Employees represents around 670 thousand employees and encompasses over a thousand locals from around the country. It is worth highlighting that during the 2008 elections, Clinton wasn’t picked over Obama and this just goes to show that the group actually thinks before making important endorsement decisions.
This makes Clinton’s support tally to rise to around 12 million union members that encompass around 18 labor alliances and unions.
Clinton is looking set to get the prize that she is after and with increased support from the union members, things are looking only bright for her. This AFGE endorsement further paves her way towards glory and it looks as if many other unions are going to follow as this is a big fish and the credibility of the union is such that people are going to have no other choice but to endorse.
Federal Employees Benefits Premiums Increasing? by Dan Hartenstein/by Dan Hartenstein
FEHB Advice from Dan Hartenstein
Dan Hartenstein is a financial advisor in Oahu, HI specializing in retirement planning and federal retirement benefits
Last fall, when the 7.4% (on average) increase in FEHB (Federal Employees Health Benefits) premiums was announced by the government to employees and retirees, it was the largest premium increase since 2011.
But, rather than simply being stuck with higher payments for these benefits, enrollees do have other options in terms of changing health plans so as to get out from under these higher dollar coverage obligations.
Should You Stay or Should You Go?
Depending on the specific plan that you are enrolled in, the actual amount of your premium increase could be more or less than the average. For example, the average rise in premium for those in a self-only plan was roughly 6.5%, while those in a family plan, on average, saw a whopping 10.7% increase.
You may or may not be paying all of these premiums out of your own paycheck, though. For instance, the government pays, on average, about 70% of the total FEHB enrollees’ premiums. But, if you work for the U.S. Postal Service, your employer may pay even more for you.
Things to Consider
Even with the employer’s help, though, the steep rise in premium, on top of other increasing costs across the board, can make this recent move with FEHB benefits enough for many employees to consider other coverage options.
This is because in addition to these rising benefit premiums, many federal employees have also had to deal with several years of either no cost-of-living adjustments, or extremely small pay increases, while at the same time, many federal retirees aren’t seeing much in the way of retirement income increases either. This can make it doubly hard to justify remaining in a plan that has increased the premium in excess of 5%.
With that in mind, it is important to weigh out all potential options, as well as the various costs, prior to moving forward with any decision. Keep in mind that all health plans are not created equal, so be sure to compare apples-to-apples when evaluating any other coverage.
More about Dan Hartenstein
Dan Hartenstein – Financial Advisors Credio
US 2017 Federal Budget Proposal:1.6% Federal Employee Pay Raise/by Jeff Boettcher
US 2017 Federal Budget Proposal: 1.6% Federal Employee Pay Raise and Paid Parental Leave
The newly-released President Barrack Obama’s Administration’s Fiscal Year 2017 Federal Budget Proposal includes the 1.6% federal employee pay raise and six weeks of fully paid parental leave for federal employees, among others.
Federal Pay Raise
The inclusion of the aforestated president’s investment for the federal workforce into the 2017 federal state proposal is in consonance with the authority vested in President Obama as the President of the US Constitution and the applicable laws of the United States of America.
Following the release of the proposed pay rate for federal employees, it has sparked various reactions from several groups, namely: the Federal employee groups, and the American Federation on Government Employees which called for a 5.37% pay raise as reported in the February 9, 2016 edition of the PRNewswire.
“NARFE welcomes the 1.6 percent pay raise proposed by President Obama. For the first time in seven years, the increase follows the letter of the law. However, the proposed increase still lags behind the average increase in private-sector pay, which rose by 2.1 percent, according to the Employment Cost Index, calculate by the Bureau of labor Statistics. Now that our economy is on a stronger footing, it is time to start closing, not growing, the gap between public and private sector wages and salaries. That gap now stands at more than 35 percent and is contributing to the wave of federal retirements and shrinking number of younger workers entering the civil service, ” according to Richard G. Thissen , President of the National Active and Retired Federal Employees Association (NARFE).
Along with the budget proposal is the report prepared by the Congressional Budget Office which highlights the comparative analysis of the compensations of the federal and private sector employees.
Differences in skill levels, complexity of work, scope of responsibility, size of the organization, location, exposure to personal danger and experience levels are those factors which are bases for comparing the pay and benefits.
With respect to the factors involving comparisons on the types of compensation, these are pay and bonuses, retirement benefits, health benefits, flexibility of work schedules, training opportunities, job security and profit sharing.
II Six-week Paid Parental Leave
It proposes to provide federal employees with six weeks of paid parental leave. Such parental leave will be filed for purposes of the birth, adoption, or foster placement of a child. It will also be used to allow parents to care for a new child.
While the pay gap between employees and their counterpart in the private sector continues to grow, the proposed across-the-board compensation increase is envisioned to address the proliferation of some federal jobs which are noted as severely underpaid. Maximizing the proposed efficient use of federal resources will provide the federal employees continual access to their bright working opportunities they truly deserve.
Retirement tips for people of all ages/by Matt Pierce
Retirement for most is something that looks placed in the very distant future but in the world of today, to have a sustainable post-retirement life, you need to start preparing as soon as you possibly can. It doesn’t matter whether you have realized this at 20, 30 or even 50, if you have realized it before your retirement age has dawned upon you, then you still have time. Following are some retirement tips available for people of all ages:
Retirement tips for all:
IF you are in your 20s you need to realize and understand the concept of time value of money. You might have just ended your academic career and have landed a job that pays you a fair amount. The blood that is currently running in your veins is adequately paced so the thought of saving for retirement is unlikely to cross your mind. But this is the time to think about the time when you won’t have the energy to make a living for yourself. Researchers believe that this is the most ideal time to start living your life according to a budget and saving as much as you can.
If you are in your 30s, you have looked at and understood life a lot. You need to balance your spending and save money from now on. If you have a family, then you will probably do it anyway but if you are planning to settle, then make sure you are on the right track when it comes to saving.
40s and 50s:
This is arguably the most critical stage. Retirement now shouldn’t feel like being far away. Now you desperately need to shift towards building your retirement income. Get the guidance you need and start investing in retirement plans.
At this stage, you are of course retired. You need to spend the money you have according to the amount you have left. IF you saved enough, at this stage, you will live some of the best years of your life.
How to make your retirement savings plan risk-free/by Jeff Boettcher
Retirement plans are talked about a lot these days in workplaces and between federal employees. A good retirement savings plan can go a long way in making a retiree live a prosperous life. Some workspaces provide the facility to invest in a plan automatically but participation is only one step in the right direction. Another thing to remember and pay heed to is the risk management that’s essential. Following are some of the reasons how you should tackle the risks that you might encounter:
Make your retirement savings plan risk-free:
- How risk tolerant are you?
You are going to have to deal with some degree of risk no matter what the nature of your investment might be. You need be self-aware firstly and this will allow you to choose the investment plan that suits your nature best. You might also be provided with some tools to manage your risk tolerance potential as well.
Diversification is always desirable. Everybody can benefit from it. Don’t put all of your investments in to one plan and always try to consider a varying mixture of bonds, cash and stocks.
- Regular maintenance:
Maintenance needs to be done regularly as well. IF you need to make sure that you don’t have to deal with any undesirable happening at any time, then you need to make sure that you keep your eyes open and not be naïve all the time.
- Allocate your assets properly:
Always allocate your assets in the best way possible. There are a lot of categories available to invest in and this requires you to divide your assets accordingly.
Savings plan are good for every employee but at times they can also end up hurting you so it’s always recommended to pay proper heed to risk maintenance in this regard.
Federal Employee Retirement Savings Tips/by Matt Pierce
We all strive to make more money and the start of a new year can represent good place to start. For federal employees, there are a lot of different strategies for boosting federal employee retirement savings and something that we need to put at the top of our list of things to do. If you are also trying to double up on your savings, then read on as we have some interesting tips for you:
Increasing Federal Employee Retirement Savings:
- Set goals: The first thing that you need to do is to set up your monthly goals. The biggest mistake people make is setting up goals for the whole year which (because of the longevity constraints) they fail to achieve. Try to set up as vivid monthly goals as you can.
- Set default saving options: Always make the default decision when it comes to making additions to your savings accounts. You can just choose to make 401 (k) deductions from your pay check right away and that should be the ideal practice.
- Defer your saving boost: IF you are not capable of bearing a smaller check in the start of the year, don’t just put it off completely. Defer it till later in the year and do it eventually.
- Your future you needs the present you: You will love yourself dearly if in the future you end up having enough money to live a dandy life. So think about your future and make decisions accordingly.
- Keep it increasing: Throughout the year, try to increase the rate at which you put money in to your account and you will be good to go. A small percentage in January and a large one in October can do the trick.
Is it Good or Bad News … or Just News? by Dianna Tafazoli/by Dianna Tafazoli
Federal employees are always pleased to hear good news that will potentially benefit them and their families. Whether the fed is new to the workforce or living in retirement, health benefits are one of the most important incentives for becoming a Federal employee.
Gas prices went down over the summer and it appears they are still respectable at this writing without squeezing the purse strings of the average American. We are still able to drive our vehicles and not leave them in the garage because the cost of gasoline is too high to afford. I don’t think grocery is getting higher except if you still want to purchase things like blueberries that are now out of season. The cost of about 20 blueberries in a container will set you back by about $7.00 in the Northern Virginia area. You could buy frozen berries and just wait until next summer when the berries are more plentiful to avoid the exorbitant cost..
Federal workers don’t have such an easy choice when it comes to the cost of health care – buy it now or wait until next summer. The Office of Personnel Management (OPM) has announced that premiums for health care benefits will rise by an average of 6.4 percent for the 2016 program. The new category of coverage Self Plus One will be available starting in the 2016 enrollment offering.
Nobody wants to hear of a price hike, but even with the rise in health care benefits for Federal employees, the premiums paid by these workers are the best in the nation because of the size of the group. Great health care premiums are still affordable for most Federal employees.
P. S. Always Remember to Share What You Know.
Government Spending Money In The Wrong Areas, Says Senator/by Jeff Boettcher
A U.S. senator has lost his cool while talking about a study that’s funded by the government. This study has an approximate budget of 375 thousand dollars and it’s meant to examine the dating habits of senior residents of the country. Apart from this, he has also pointed his finger at a 683 thousand dollar program of the National Endowment of the Arts that includes mute Hamlet performances. He believes (and we can seem to disagree) that these are the two most unexplainable spending currently made by the government.
James Lankford’s report has taken some massive whacks at the expenditures that encompass all sorts of programs from amusement programs to research ones. He has highlighted the government spending that should ideally be used for something more productive.
Where is the government spending headed?
The senator has made some very strong and valid points about the inefficacy of the government spending in his report. He stresses on the fact that where there are children devoid of the ability to afford studies and families failing to make ends meet and get loans, the government is spending money on programs that make no sense to him. He highlighted the recent OPM data breach that resulted in the compromise of data of around 20 million employees and raises the argument that the government has not got its priorities straight.
When you look at things from the perspective that he has presented, his points do make a lot of sense. These programs might have some goals and objectives but when there is ever-growing poverty in the country and retirees fighting for retirement plan attainments through faulty procedures, money should be spent elsewhere to make the society a better place. Here’s hoping that his efforts don’t just go in vain and the government actually takes steps to ascertain his claims.
Making Wise FEGLI Assignment Decision In Today’s Market/by Jeff Boettcher
Making wise FEGLI assignment decision in today’s market
You may allocate your Federal Employees Group Life Insurance or FEGLI to one or more persons, firms or trusts. Task implies that you consent to surrender responsibility for Basic, Standard Optional and Additional Optional life coverage scope until the end of time. The trustee turns into the recipient yet you must keep on paying any relevant premiums.
There are three primary things you need to consider before going ahead with the FEGLI protection. To comply with a Court Order–You may make a task of your gathering life coverage keeping in mind the end goal to consent to a court request for separation. Doling out extra security scope to a previous life partner gives a way to guarantee the court that life coverage advantages will be payable to a previous spouse or his or her assigned recipient. Otherwise under the extra security law, a FEGLI protected individual may change his or her assignment of recipient whenever.
For Inheritance Tax Purposes– usually if a task is made no less than three years before a singular’s demise, the FEGLI protection is viewed as a “gift” to the chosen one, instead of a piece of the domain of the safeguarded. Current government domain charge law permits a boundless conjugal finding for that divide of the gross home went to a surviving partner. Along these lines, there is no obvious prompt duty point of preference to doling out responsibility for life coverage arrangement to a companion. Notwithstanding, since state charge laws shift and duty ¬savings under government or state law can be extensive if FEGLI protection continues are not subject to domain charges, it is vital to counsel an able home expense consultant. A determination in respect to whether the extra security continues are incorporated into your gross bequest should at last be made by the IRS. In endeavoring to decide the expense impact of a task, you ought to refer to tax duty laws, case law and IRS regulations. Likewise, you ought to think about getting as a decision from the IRS.
To Obtain Accelerated Death Benefits–You can dole out your extra security to a viatical settlement firm on the off chance that you are in critical condition so as to get a bit of the estimation of your disaster protection before your passing. Consider first whether you could achieve the same objective by choosing a Living Benefit, be that as it may.
A couple focuses to note are – By doling out your extra security, you surrender the privilege to assign recipients and to lessen the measure of protection scope (regardless of the fact that the expense is more than you can manage). Family Optional disaster protection can’t be appointed, in light of the fact that, by law, no one but you can be the recipient. On the off chance that you relegate your life coverage to more than one individual, you must indicate the rate offers for every individual. You are not allowed to name unexpected appointees in the occasion the essential chosen one predeceases you. In the event that the trustee does not assign a recipient, the chosen one is the recipient and will be paid after your passing. This is basically how FEGLI works.