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Beth Cobert – Nominated as OPM Director/by Admin
It’s Not Retirement Time Yet For Beth Cobert – Nominated as OPM Director
President Barack Obama announced his intent to nominate Beth Cobert as Director of the Office of Personnel Management (OPM). If confirmed, Cobert will get to continue in the position she has been serving in as Acting Director since the OPM retirement announcement of former director Katherine Archuleta.
Apart from being OPM Acting Director since July 2015, Beth Cobert also serves as Deputy Director for Management in the Office of Management and Budget, a position she has held since 2013.
Before that, Ms. Cobert served in various capacities at McKinsey & Company from 1984 to 2013, including as Director and Senior Partner. She received a B.A. from Princeton University and has an M.B.A from Stanford University Graduate School of Business.
Why is Beth Cobert Being Nominated as OPM Director?
Katherine Archuleta was virtually forced to announce her retirement from the post in the wake of the OPM data breaches that compromised millions of federal employees, retirees and job applicants whose data was stolen. The anger was more about the OPM retirement office and other divisions of the agency stonewalling information requests by those affected and refusing to disclose the extent of the data breach.
The issue came to a head after federal employee unions and other organizations representing affected individuals started filing lawsuits against the OPM seeking a disclosure about the data breaches. This was quickly followed by Congressional hearings and lead to the resignation of Katherine Archuleta.
Beth Cobert then took over as Acting Director, and has since done an admirable job navigating the Office of Personnel Management through troubled times and all the security measures initiated as a response to the data breach crisis.
Not to mention that the OPM has to update millions of people about the federal benefits open season and new changes to retirement benefits programs such as TSP, FEGLI and FEHB that are undergoing key periods of change.
It dumps a lot more work on the OPM retirement office, along with a flood of calls from confused federal employees and retirees. Oh, and there’s also an across the board federal employee pay raise and ongoing modifications to the General Schedule locality pay system which the OPM now has to factor in.
Since the agency is still managing to do all this quietly without creating any waves, it’s no surprise that President Obama doesn’t want to rock the boat and has nominated Beth Cobert to the post of OPM Director.
Poll Shows What VA Military Benefits and Services Mean to Veterans/by Admin
What do VA Military Benefits and Services Mean to Veterans?
The American Federation of Government Employees (AFGE) is highlighting the findings of a new poll showing how valuable VA military benefits and services are to veterans as evidence that Congress needs to fix the agency and not dismantle it.
The survey of 800 veterans shows what they think of the VA hospitals in their area:
– Have qualified doctors and nurses (65%);
– Deliver good quality care (58%); and
– Care about veterans and their healthcare (65%).
Veterans Don’t Want VA Military Benefits and Services Privatized
Eight in 10 veterans believe they should not have to rely on vouchers that may not cover all of their health care needs in the private sector. Rather than privatizing their health care, veterans said the VA system should be strengthened by hiring more doctors and nurses.
The poll showed overwhelming opposition to privatizing Veterans Affairs hospital programs and services. Overall, 64% of veterans oppose privatization, while 54% strongly oppose it.
“Veterans have spoken loud and clear: they believe Congress should fix the VA health care system, not dismantle it,” said AFGE National President J. David Cox Sr. “Lawmakers should think twice before supporting legislation that would outsource the VA to for-profit hospitals and undermine our nation’s promise to care for all of those who have served our country.”
So exactly what changes do they want to see in the VA they want to preserve? A full 48% say it takes too long to get treated at their local VA hospital, while just 37% say the VA has honest and transparent leadership.
So basically, make the VA leadership walk the plank and then hire a lot of doctors and nurses and support staff. There are currently about 41,500 vacant health care positions that need to be filled across the Veterans Administration, so the second part should not be a problem if Congress agrees to provide the funding for hiring a whole new bunch of federal employees and maybe build a few more VA hospitals.
TSP Funds Bullish For October/by Admin
After a mostly miserable six months or so, the Thrift Savings Plan (TSP) funds finally got up off the mat and recorded a stellar month of gains in October.
All the TSP funds, without exception, recorded gains for the month. The C, S and I Funds linked to the domestic and global stock markets showed especially impressive gains.
The C Fund, which matches the performance of the Standard and Poor’s 500 (S&P 500) Index, climbed a stunning 8.45% in October, more than wiping out all the losses in the previous months this year. The C Fund now has gained 2.76% for the year to date, and has gained 5.28% in the last 12 months.
The I Fund, which matches the performance of the MSCI EAFE (Europe, Australasia, Far East) Index, likewise climbed a stunning 7.07% in October, more than wiping out all the losses in the previous months this year. The C Fund now has gained 2.43% for the year to date, and shows a 1.30% loss for the last 12 months.
The S Fund, which matches the performance of the Dow Jones U.S. Completion Total Stock Market Index, climbed 5.61% in October, nearly wiping out all the losses in the previous months this year. The S Fund now shows only a small loss of 0.71% for the year to date, and has gained 1.61% in the last 12 months.
TSP G and F Funds Hold Steady
Even the G and F funds, which are invested in bonds, managed small but steady gains of 0.17% and 0.02% respectively for October. The G Fund now has gained 1.68% for the year to date, and has gained 2.04% in the last 12 months. The F Fund now has likewise gained 1.46% for the year to date, and has gained 2.42% in the last 12 months.
All this data augurs well for TSP Fund performance for the entire year, assuming that the last two months of the year are good for the stock markets, and the TSP funds continue the bullish streak recorded in October.
TRICARE Young Adult Premiums to Rise/by John Zottoli
The U.S. Department of Defense has announced higher health insurance premiums for TRICARE’s Young Adult plan.
TRICARE Young Adult is a health plan for certain young adults who are children of military personnel and retirees. Beginning January 1, 2016,
for TRICARE’s Young Adult Prime option, rates will increase to $306 per month; and,
for TRICARE’s Young Adult Standard option, rates will increase to $228 per month.
Department of Defense release NR-411-15, dated October 28, 2015, explained that TRICARE must set these premiums to cover the full cost of TRICARE Young Adult (TYA) beneficiaries. In addition, this release encouraged TYA beneficiaries to “explore all of their health care options and to pick the plan best suited to their needs.”
Regular TRICARE coverage (for example, under a parent’s plan) is available to young adults up to the age of 21 (or 23 if the person is enrolled in college). After that, TRICARE Young Adult is available.
To qualify for TRICARE Young Adult, an individual must be:
- at least 21 but not yet 26 years of age and no longer eligible for coverage under a sponsor’s plan;
- not eligible for an employer plan based on the individual’s own employment, and
- not otherwise eligible for TRICARE coverage.
by John Zottoli
Federal Employees Receive Boost in Pay/by Admin
Due to the newly published rules that will give rise to the 13 new locality pay areas thereby expanding the prevalent ones in the process too, around a million federal employees will get their hands on an extraordinary pay rise come January!
This general schedule pay system is applicable to the incomes of around 1.6 million federal employees that are currently pursuing their careers in the white collar occupations below the senior-most designations. As already known, there are separate pay systems for officers at executive and other senior positions. The blue collar employees also share a different pay system.
The general locality pay system takes the location of employment as an input and not the location of residence of the officer. This results in a difference in income based on different locations but for the same job. For Alaska and Hawaii, there are currently around 30 city areas, not inclusive of the separate small localities. “Rest of the US” or RUS is composite of all the rest of the localities.
If an officer moves from a RUS locality this could in turn mean a pay boost since generally it is considered the least paid locality. For instance, a normal income for an officer at GS-13’s first level point is around 80,000 in the RUS locality but around 90 thousand in the Baltimore locality. Another worth-highlighting point here is that in the highest paid locality i.e. San Francisco, it goes up to around a 100 thousand.
Most of the federal employees that are officers are expecting pay boosts of up to 1.5 percent by the start of the next year.
This pay rise will be compensated in two parts: 1 percent will be awarded to everyone and the remaining portion of the raise will be distributed amongst the localities after the pay figures are compared and analyzed. This will result in slightly different pay boosts ranging from 1.2 to 1.4 depending on localities.
It’s expected and also proposed by the pay council that more and more localities be added in the coming years in order to ensure that the pay gaps be minimized and certain rudimentary threshold values be met. Positive efforts like these should always be lauded.
Medicare Premiums to Rise for Some Retirees/by John Zottoli
On Monday, November 1, President Obama signed legislation that averts what, for many federal retirees, would have been a very large increase in their Medicare Part B insurance premiums. Instead of facing a $50 plus increase, federal retirees who do not receive Social Security payments will see an increase of about $19 a month. This includes a $15.80 a month increase in their basic premium, plus a $3 monthly surcharge.
Retirees whose Social Security income covers their Medicare Part B premiums will see no increase. Current law limits the increases in Medicare insurance premiums that Social Security recipients must pay.
Increases in Medicare premiums may be no larger than a recipient’s increase in Social Security payments. For the 2016 calendar year, there will be no increase in Social Security payments, consequently Social Security recipients are protected from 2016 increases in Medicare Part B premiums.
However, this “hold harmless” provision only applies to retirees whose Social Security income pays their Medicare Part B insurance. Before the November 1 legislation became law, other Medicare Part B beneficiaries would have faced a premium increase from $104.90 to $159.30 per month.
No such “hold harmless” protection exists for Federal retirees who do not get Social Security. Without a change in legislation, these retirees would have had to pay the extra $50 plus in monthly Part B premiums.
To offset lower revenue for the Medicare Trust Fund, Medicare beneficiaries will pay a $3 per month surcharge, for about five years beginning in 2016. Social Security recipients will not pay the $3 surcharge in 2016. However they will pay the surcharge in any future years when their “hold harmless” provision does not apply.
The November 1 legislation reflected a broad-ranging budget and debt-limit agreement negotiated between the President and the Congress. The legislation avoids a default on U.S. Government debt payments. It also raises caps on federal defense and non-defense spending. An additional provision of this legislation caps the increases in Medicare premiums.
— by John Zottoli
Federal Benefits Protected by New Budget/by Tamila McDonald
The Senate averted a potential government shutdown by passing a two-year budget that raised the debt ceiling. The package will now go to President Obama for approval. Congress passed the bill to prevent the nation from reaching its debt limit.
Conservatives opposed the bill, which involved a month-long negotiation and puts off another debt crisis until March of 2017. In addition to keeping Congress away from another debt ceiling for two years, the bill also keeps federal employees pay and benefits safe.
No Targeting of Federal Employee Benefits
Congress passed the bill without any provisions that would target federal employee benefits or pay. The final draft of the bill is very different from earlier agreements including the 2014 deal, which forced new employees to contribute more to their pension.
The President of the National Active and Retired Federal Employees Association gave his approval of the deal to the press saying, “We hope our leaders in Washington are learning, finally, that they cannot balance the budget on the backs of federal workers and retirees,” Richard Thissen said.
Federal retirees received more reprieve in this Bipartisan Budget. This year there was no cost of living adjustment due to lower inflation. This lack of COLA adjustment raised major concerns because of the rising costs of Medicare. The lack of a cost of living adjustment means that individuals who are not “held harmless” under their Medicare plan would have to pay an extra $54 per month to help offset the loss of income from those who would not see a raise in premium because of no COLA.
The bipartisan bill prevents some federal retirees, including individuals qualified under the Civil Service Retirement System (CSRS) from having to pay the additional costs. The new act protects individuals for this year, but does nothing to address a possible increase for next year.
Thissen addressed this portion of the agreement saying that the compromise is good but more needs to be done. “While I believe this is a good compromise for the 2016 premiums, Congress and the administration must fix this situation… Millions of individuals should not have to live with financial uncertainty just because their Medicare premiums do no come from social security,” he said.
Potential Government Shutdown Still Exists
While the new budget agreement protects federal benefits and federal retiree benefits, it does not solve other funding problems, including the ability to provide funding or some agencies. If the White House does not come up with a way to fund agencies before the end of the year, we could still see a government shutdown. Congress has until December 11 to either come up with a resolution or pass a spending package to avoid closing doors.
New Speaker of the House Paul Ryan spoke out against the budget deal. Despite efforts to filibuster against the bill, the debate ended on Wednesday while Paul was away at a debate. Paul did speak in opposition to the bill and asked legislators to accept his more balanced budget. Paul took to Twitter and the media to encourage Senators to vote against the new agreement, but the senate voted to approve the bill around 1 a.m. Congress will be back in action on Monday to take on further spending issues to avoid a government shutdown next month.
Most Tax-Friendly States To Save Your Federal Retirement Benefits/by Admin
Most Tax-Friendly States To Save Your Federal Retirement Benefits
When selecting the location for life after federal retirement, no doubt sun n’sand and some golf courses figure prominently. But Florida and Arizona are not even in the top five in terms of taxes and making your federal retirement benefits last longer.
For that, you need to find the most tax-friendly states, and this is where Kiplinger’s latest ranking of states might come in handy. The magazine ranks Alaska as the No.1 most tax-friendly state for retirees, with no state income tax, sales tax or estate/inheritance tax.
This means that your Social Security benefits and any federal retirement plan distributions and income such as a TSP withdrawal, IRA earnings, etc. won’t be subject to any state income tax in Alaska. It helps you manage your savings plan better, while at the same time making your retirement income last longer. Throw in low gas tax, low property taxes, and refunds for state residents from oil revenues, and it all adds up to make your retirement income feel like it’s much bigger than you thought it was.
Of course, you also have to select the right location within Alaska. This is because local taxes imposed by municipalities may result in you having to pay a higher net tax in Alaska than you would in other states where retirement benefits are taxed at the state level. So if you choose Anchorage or Fairbanks, you don’t have to worry about local taxes. But other cities and smaller municipalities may not be so benevolent.
Top 10 Most Tax-Friendly States To Safeguard Federal Retirement Benefits
Here’s the top 10 most tax-friendly states, as per Kiplinger’s, where you can make your federal retirement benefits last longer.
- South Dakota
It’s Almost Federal Benefits Open Season For Federal Employees/by Admin
The Federal Benefits Open Season is just round the corner (Nov 9-Dec 14) and is your one and only annual opportunity to enroll or make changes to your health, dental, vision, and tax-saving needs.
There are three federal benefits programs that participate in the annual Open Season event. They are the Federal Employees Health Benefits (FEHB) Program, Federal Employees Dental and Vision Insurance Program (FEDVIP), and the Federal Flexible Spending Account Program (FSAFEDS).
This is your chance to make elections for these programs that you aren’t allowed to do during the rest of the year, unless you can come up with a qualifying life event (QLE).
For the record, your FEHB and FEDVIP enrollments will continue automatically even if you ignore the Open Season event and make no changes. Existing FSAFEDS accounts, however, do not continue automatically, so you are required to re-enroll.
What Changes Can you Do To Your Federal Benefits During Open Season?
The changes to federal benefits you can make vary based on the program. For FSAFEDS, you can choose from three accounts – a dependent care account, a health care account, and a limited expense health care account. Participating in this program reduces your taxable income. To make an FSAFEDS election, call 1-877-372-3337 or TTY 1-800-952-0450, or do it online at www.FSAFEDS.com.
You can enroll into FEDVIP to fill the gaps in your existing dental and/or vision coverage. For those already enrolled, Open Season is the only time you can cancel FEDVIP enrollment. To make a FEDVIP election, call 1-877-888-3337, TTY 1-877-889-5680, or do it online at www.BENEFEDS.com.
As for FEHB, eligible employees can enroll, change from one health plan to another, and cancel their health benefits enrollment. You can also change participation in premium conversion. One important change this year is the new “Self plus one” enrollment type. Those enrolled in “Self and Family” with only one covered family member can elect to switch to the Self plus one plan.
For making FEHB elections during Open Season, federal employees should use the Health Benefits Election Form (SF 2809) or use an online self-service system. Federal retirees can call Open Season Express at 1-800-332-9798, TTY 1-855-887-4957, or do it online on the OPM Retirement website at retireefehb.opm.gov.
Calculators to Help You With TSP Investments and Withdrawal/by Admin
It’s understandable if new federal employees are confused by the bewildering array of options for Thrift Savings Plan (TSP) funds and investments. Not to mention all the rules and regulations regarding contributions and penalties limiting your ability to initiate a full or partial TSP withdrawal at any time you want, and start over with a clean slate.
It’s a qualified retirement benefits plan, so you can’t just put in and take out money whenever you feel like it, unlike other investment portfolios that you can fiddle with all the time. Under such circumstances, it’s all that much more important that you get it right the first time.
The good news is that you have a whole bunch of TSP calculators on the TSP.gov website’s planning and tools section for this, including calculators to help you decide on how much to contribute and save, a contribution comparison calculator, a paycheck estimator, a retirement income calculator, monthly payment calculator, etc.
TSP Calculators For Savings, Earnings, Withdrawal and Retirement Income
If you need to find out how much you need to save, use the Federal Employees Ballpark Estimate calculator. It will help you calculate how much you need to save each year from now until retirement based on your estimates of retirement income and existing savings.
Another earnings calculator helps you find out how much your savings will grow, factoring in your future contributions and/or the growth of the money already in your account. You simply select your retirement benefits system (FERS, CSRS, uniformed services, etc.) and choose whether you want to find out the growth of your existing account balance or only your future contributions, or both. Enter in the details, and it will give you a clear idea of how much money you will have at a specific point of time in the future when you want to make a TSP withdrawal.
There’s also a Contribution Comparison Calculator that will help you assess the impact of the tax treatment choice of TSP contributions on your paycheck. This will help you decide if a Roth TSP is feasible for you.
The retirement income and monthly payment calculators will help you determine the amount and duration of payments you can get through a TSP withdrawal.