Tamila McDonald Articles
President Obama Orders Benefits for Federal Contract Workers
President Obama Orders Benefits for Federal Contract Workers
Following a move by President Obama, some 300,000 federal employees will have access to sick leave, a new benefit not previously offered. The executive order requires that federal contractors offer their employees up to seven days of paid sick leave per year, according to an article in Money Talks.
The President signed the executive order on Labor Day, following a union rally and breakfast. Mr. Obama told rally participants that everyone deserved a fair shot.
“When you make sure everybody gets a fair shot and a fair sake, and you’re fighting for decent wages for workers, and making sure they’ve got decent benefits, when you reward people who are playing by the rules—that’s how everybody does better,” President Obama said Monday.
Sick Leave for Federal Contractors
According to a news release offered by the White House, some 300,000 people working under federal contracts will now have the ability to earn up to 7 days of paid sick leave each year. Starting in 2017, workers will earn a minimum of one hour of paid sick leave for each 30 hours they work. This means the average employee who earn just over 5 hours of sick leave per month.
Per the executive order, employees may use the sick leave if the employee is sick or if a family member (specifically spouse, child, partner or parent) is ill and needs attention. Employees may also use these hours for time off because of domestic violence or sexual assault.
According to the press release, the purpose of these new requirements is to improve the health and performance of employees by giving them access to federal benefits. Additionally, these new rules will help protect the public from illness, as federal employees will not feel pressured to work when they are ill.
The Healthy Families Act
As part of this new move, President Obama asked Congress to pass the Healthy Families Act.
This act would require that all businesses with 15 or more employees offer up to seven paid sick days each year. This federal legislation would mean that every working American would receive paid family medical leave to cover the cost of taking care of a new child or caring for a seriously ill family member.
Recently the State of Massachusetts passed a law expanding paid leave. The president encouraged other states to follow suit.
The president made an additional announcement that affects both federal employees and civil employees. The Department of Labor will publish a final ruling that “prohibits federal contractors from discriminating against employees and job applicants who choose to discuss their compensation.” Workers do not have to disclose compensation on other jobs, but the tool allows for more oversight of gender pay discrepancies.
In recent years, President Obama has addressed extended overtime pay to almost 5 million federal employees. This rule would allow salaried employees who make less than $50,400 to have access to overtime rights. Additionally, Obama also signed an executive order raising minimum wages to $10.10 for federal employees. In 2012, Obama signed the American Taxpayer Relief Act, which reduced income tax rates for nearly all American workers.
Thrift Savings Plan: Changes and Performance
Changes and Performance in the Thrift Savings Plan
Beginning September 5, the default Thrift Savings Plan for new federal employees will be a lifecycle fund. Government securities funds are run by the government securities (G) fund. Congress approved the change to the riskier investment last year and the TSP board finalized the changes last month.
Federal employees still have the option to use the G-fund, but they must actively select the option. New employees who opt to choose the default investment will have 3 percent of their paychecks deposited into the age-appropriate lifecycle fund. This fund is a riskier investment than the G-fund, but generally offers higher returns.
New employees should be aware that although their money automatically diverts to this higher risk fund, it is at the employee’s risk. The government and TSP fund only offer protection for G Funds.
New Employees Only
Only new or rehired federal employees will be auto-enrolled in the more aggressive Thrift Savings Plan. Current participants will not see a change to their investment. Per regulation, the TSP board will notify new employees of the default plan and allow them the option to switch to a different fund. They may also request a refund of default contributions.
The G fund is the most popular option for federal employees as it provides the most stable investment. Other options include the L fund, which mix several different TSP funds. This particular option allows investors to take advantage of higher risk, higher yield investments in their early days of employment while gradually returning to more stable options as retirement age nears.
TSP Board Requested Change
The initial proposal for this change was submitted to legislature in late 2013 at the request of the TSP board, which is comprised of members of employee organizations, unions and the uniformed services. The purpose of the change was to help diversify investments. Automatic enrollment in the TSP has increased participation among federal employees, however, this also resulted in younger employees (under the age of 29) investing too much money into the G-fund. Experts attribute this to the fact that most employees do not bother to change the default investment.
The G-fund is the most stable investment option, however, it typically does not offer high returns. The change will allow new employees the chance to earn more on their investment.
For some employees this change may have come at an inconvenient time, as August’s Thrift Savings Plan numbers were less than ideal. Recent hiccups in the stock market affected retirement funds landing the G fund in the only spot to come out win the black and that increase was a minute .18 percent growth. Despite the small growth, the G-fund is up 1.33 percent year-to-date.
The Lifecycle Funds (which new employees will now automatically invest in), all came in at a loss this month. The lowest loss was at 1.1 percent. L2050 suffered the biggest hit with a loss of 5.37 percent. This rather nasty plunge took most L funds between .31 and point 89 percent lower than year to date last year.
New employees hired on or after September 5 will have to request a different investment if they wish to stay away from these riskier L funds.
President Nears Federal Pay Raise Deadline
President Nears Federal Pay Raise Deadline
President Obama must formally announce the 2016 federal pay raise proposal by August 31. Sources say that President Obama will ask for a 1.3 percent raise across the board for civilian federal employees. President Obama included this figure in his 2016 fiscal budget and he has continued to support that number since the initial projection.
FEPCA Possibility
If President Obama fails to bring his alternative pay plan to Congress before the August 31 deadline, the increase will automatically adjust according to the 1990 Federal Employees Pay Comparability Act. This act says that raises will adjust according to changes in the Employment Cost index less .5 percent. If the president misses the deadline, federal employee salaries would increase by 1.8 percent.
Despite the recommended increase by the FEPCA, presidents typically propose their own increases, which is allowable under the law. The purpose of the FEPCA is to provide an annual salary increase to help bring private and public pay closer together.
The Obama administration has taken criticism for low federal employee salary raises, including three years without any raises at all. The government hopes these new pay areas will offer new avenues for increasing pay to federal employees.
New Locality Pay Areas
Civilian federal pay rates were frozen in 2010 and this is not likely to change in 2016, however, some federal employee salaries could see in increase thanks to the creation of 13 new locality pay areas. These pay areas will provide a significant raise to just over 100,000 federal employees.
To offset the significant increases in these new regions, the government expects to maintain lower increases in current areas. New proposed pay regions include: Albany, New York; Albuquerque, New Mexico; Austin, Texas; Charlotte, North Carolina; Colorado Spring, Co; Davenport, Iowa; Harrisburg, Pennsylvania; Kansas City, Missouri; Laredo, Texas; Las Vegas, Nevada; Palm Bay, Florida; St. Louis Missouri; and Tuscan, Arizona.
These new pay rate areas take effect in 2016.
Congress Must Approve the Raise
If the president does present the projected 1.3 percent increase to Congress, Congress must still approve the raise. In theory, Congress could ignore the president’s recommendation and the FEPCA formal in favor of creating their own pay raise proposal, though experts do not expect this to happen.
As of earlier this week, the House has already passed half of the 12 proposed spending bills for 2016, though the Senate has yet to pass any. Last year Congress approved a 1 percent pay federal salary increase proposed by President Obama. Congress also approved a 1 percent increase in 2014 and this was following three years of frozen pay.
Historical records show that the Obama administration has offered the lowest federal salary increases in history. In 2010, federal employees saw a pay increase near 4 percent. In 2011 through 2013, pay raises were frozen and 2014 and 2015 gave federal employees an increase of only 1 percent.
Some lawmakers have proposed a legislation that would provide a 3.8 percent pay increase, though most experts do not expect this bill to be successful.
President Obama has until Monday to submit his proposal.
Defending Public Safety Employees’ Retirement Act Enacted
Defending Public Safety Employees’ Retirement Act
Certain former and current federal employees can now access their retirement benefits earlier than traditional retirement accounts allow for without fear of repercussions. The president signed and enacted the Defending Public Safety Employees’ Retirement Act on June 25. This bill allows current and former employees to access the federal employee retirement system to withdraw funds as early as the age of 50, without penalty. Typically, individuals can only access their retirement benefits at 59 1/2 without incurring an early distribution tax penalty.
The Defending Public Safety Employee’s Retirement Act
The Defending Public Safety Employee’s Retirement Act allows early retirement benefits to be distributed as early as age 50 to those who have worked as enforcement officers, firefights and air traffic controllers, according to a copy of the bill. The bill stipulates that those currently of formerly participating in these forms of federal employment be allowed early access for various reasons. Other individuals face a 10 percent penalty.
The bill also stipulates that the restriction on allocations from government retirement plans labeled as benefit plans are the only plans to qualify for early withdraw. As an added measure, the bill prohibits the Internal Revenue Service from treating the change to equal payments as a reason to increase the early-withdraw penalty. Qualified current and former federal employees can begin taking early distributions without penalty as of December 31, 2015. The bill does not extend the exemption past these specific organizations. All other individuals could face a tax and penalty fee on early withdraws as is typical for all retirement plans.
Federal Retirement and Withdrawal Rules
Current retirement withdrawal qualification is based on your minimum retirement age. Employees born between 1948 and 1952 can typically begin withdrawing pension benefits sometime during their 55th year, while individuals born after 1970 must wait until the age of 57 to qualify. Additionally, no matter which federal organization you work with, your FERS benefits will be reduced based on the number of years you served and your withdrawal age may increase. As a general rule, to qualify for early withdraw, with no fees, you must have worked for the federal government for at least 20 years.
The Public Safety Employees Retirement Act did not stipulate whether employees in the qualified positions were also exempt from the 20-year service qualification requirement. Federal Employees can use the retirement calculator to determine how much their benefits will be to be at the age of retirement. The Office of Project Management features several retirement calculators including: a General Schedule calculator, Federal Ballpark Estimate, Federal Withholding Calculator and Tax Free Annuity Calculator to help federal employees properly prepare for retirement.
Reductions and Early Withdrawal Fees
Employees that opt to take an early retirement may qualify for a reduced or waived early-withdraw fee. However, they also face a reduction of annuity payments totaling 5 percent per year for every month the employee is under the age of 62. To avoid the reduction, check out the Office of Personnel Management website or work with a qualified financial professional to determine your minimum retirement age and plan to receive benefits after that age.
Federal Retirement Related Articles
Defense Bill Sets the Ground for Federal Employee Payscale and Performance Changes
No COLA Increases in Social Security Benefits
Planning for your Federal Retirement by Todd Carmack
Federal Employees Could Face Higher Medicare Premiums
Rising Medicare Costs
A law fluke could cause a price hike in Medicare costs for individuals receiving federal retirement benefits. This hike could affect several hundred thousand retired federal employees. The law fluke conspiring with low inflation rates could see retirees paying a significantly more per month for Medicare premiums than other retirees receiving the benefits do. Projections show that the increased premiums for retired federal employees could jump beginning in late 2016. According to a Medicare report, the premiums will not increase until October and some 70 percent of recipients will not even see a premium increase. However, the vast majority of the 30 percent of do are recipients of federal benefits, according to an article in the Washington Post.
Unqualified for “Hold Harmless”
The reason retired federal employees would see the increase is because most individuals who take part in the Civil Service Retirement System, do not qualify for the “hold harmless” provision, which helps maintain a Medicare Part B premium steady, if social security benefits do not increase to help offset the increased cost of medical coverage. This provision is designed to help keep Medicare affordable. Low inflation prices have the rate indicator (which also helps determine military retirement benefits payments) is current at negative 0.2 percent. Despite the low number, recent indications show that positive numbers may be in the future. Combined with a low projected cost of living adjustment, the indicator predicts rates increases could fall into effect later next year.
While the vast majority of Medicare recipients will not see an increase, the 30 percent who do, including retired federal employees, will likely include new Part B enrollees, individuals with no social security premium and individuals with an income-related premium. Projections for this increase are due in part to a possible low cost of living adjustment for social security recipients. If the cost of living adjustment does not provide enough to cover the additional cost of Medicare, individuals who qualify for the “hold harmless” clause will not have to foot the cost of the additional fees. However, those who do not qualify for hold harmless will have higher premium rates to offset the loss of those extra premiums.
CSRS equals no protection
Because most of the individuals who utilize the CSRS do not receive social security, they are not even eligible for any protection against rate increases. This leaves the burden of offsetting the low cost of living adjustment on their shoulders. While some retired federal employees utilizing the CSRS do receive social security via another employer, an estimated 800,000 retirees on the CSRS could have to pay higher premium rates next year. Some estimates say that there may not even be any COLA this year, which could increase the cost of premiums even more. ‘
Retired federal employees do not have to enroll in Medicare because they are covered via the Federal Employee Health Benefits Program (FEHB). However, many employees opt for Medicare at age 65 to receive better benefits. If they opt not to pay the higher premium, they could still receive coverage from FHBP.
Other CSRS Related Articles
Programming Error Forces DFAS to Issue CSRS Offset Program Refunds
FERS and CSRS – Phased Retirement
Records To Check Before Retirement
Jeb Bush Proposes Benefit Cuts for Federal Employees in Candidacy Run
According to Presidential candidate, Republican Jeb Bush proposed making major cuts to the size of the federal government, specifically federal employees. Bush argued that a lot of money is diverted to the hiring and promoting of federal employees who may not deserve it.
In a speech in Tallahassee, Tennessee he said, that employees are “hired, promoted and given pay increases without regard to performance.” Bush proposed reforms that would change the way the federal workforce runs.
Proposed Changes to Federal Employee Benefits
Among his proposed changes for federal employees and federal employee benefits included a hiring freeze to help reduce the size of the workforce. Essentially, federal agencies would only be allowed to hire one new employee for every three that left. Bush’s proposal cut could the number of federal employees by 10 percent within five years. Bush said that not all retiring federal employees should be replaced. While this would save money for the government, it was also directly impact daily roles of some already stretched federal employees.
According to Bush, this cut in employment would not require the firing of current employees, but could save the government billions of dollars without directly contributing to unemployment. Bush also said that too many federal employees are continuing to be paid, and even promoted, when they may not deserve it. Bush proposed performance-based raises, which would offer an incentive for better federal employees.
Staying Longer under Current Federal Employee Pay System
Bush told supporters that the current payment system for most federal employees promotes staying around longer. Essentially, you get more money the longer you stay, instead of promoting more efficient workdays. Instead of the current federal employee pay system, Bush proposed that federal employee payment benefits focus on the ability of the employee to help reduce federal spending through their actions.
Currently, some 2.1 million federal employees receive a pay raise every year because of the current pay system. Bush said changing this method could save the federal payroll a lot of money. While Bush called for a reduction in nearly all federal jobs, he did concede that national security positions should be exempt for the hiring freeze.
Bush’s reasoning behind the proposed cut is stemmed on his believe that “just like the real world, compensation should depend on the type of work and the quality of the work,” as opposed to how long an employee has managed to hang on.
Bush also argued that federal employees make some $1500 more per year than private counterparts do and an estimated $16,000 in federal benefits. Bush did not cite his sources for these numbers and there has been a long-lasting debate between conservatives and federal employee groups on who actually makes more money.
Bush also proposed making changes to the way federal agencies can fire employees. Bush argued that while there are plenty of excellent federal employees, most of them receive the same treatment as those who do not put as much effort or care into their jobs. Bush also said that federal agencies should have an easier time removing ineffective employees from the ranks. “Job security is one thing; job entitlement is another…” Bush said.
If Bush makes it to the White House, he will likely begin by directing state agencies to cut back their workforce by close to 25 percent.
Federal Employee Benefits under Attack
Workers throughout the federal government face risk of job loss and reduced benefits as the government (seemingly) systematically works its way through various departments, trimming federal benefits and federal employment.
Federal Employee Probationary Periods Extended
Legislation takes hits at the Department of Veterans Affairs, the Internal Revenue Service and the Department of Defense. Legislation is currently under consideration that would extend the probationary period for federal employees from one year to 18 months or two years.
Currently, many federal employees must undergo a yearlong temporary status before they qualify for permanent hiring (and access to federal benefits). If this proposal passed, many federal employees, including postal workers, could have to wait two years.
This probationary period also makes it easy for employers to fire the “temporary” employees. Once a federal employee passes their probationary period, it is much more difficult to let the employee go. Other side effects include delays in pay raises and delay in length of service and veteran considerations. This legislation specifically applies to employees at the VA and the Pentagon, but could eventually affect federal employees in other capacities.
Federal Employee Bonuses Stripped
Additionally, employees at the Veterans Affairs Office are likely to lose bonuses if they are known to have participated in a recent whistleblowing scandal that involved veterans on electronic waiting lists. The concern from the American Federation of Government Employees is that the bill, which allows the removal of these bonuses, provides too much freedom in the acting out of the bonus stripping. While the AFGE did not argue against stripping bonuses from those who manipulated the system, they fear that managers could abuse the policy.
The VA is not the only one facing bonus issues. The Senate Appropriations Committee approved a 2106 fiscal budget for the IRS that is nearly $500 million less than the budget for this year. This decrease also comes with a stipulation that prohibits the use of the money for bonuses or the rehiring of former employees unless under the strictest of considerations.
VA Appeals Reduced
Federal Employees facing termination, demotion or the loss of a bonus will still have the right to appeal the decision. However, a new bill reduces the length of time the employee has to appeal the decision to only 7 days. In the past 7 days has been a minimum, with most federal employees qualifying or up to 30 days to file an appeal.
The bill stipulates that if the employee files an appeal in time, then the judge must return a decision within 45 days or else the original decision stays in force. Additionally, federal employees at the VA would have the option to appeal the judge’s opinion.
While proponents of the bill claim the purpose is to create a fair process for Veterans and tax payers by removing poorly-performing employees, others argue that the legislation tramples on an employee’s right to fair notice and eliminates the opportunity for them to challenge adverse action. Additionally, opponents fear that a 45-day limit on the judge would make it more difficult for fair judgement.
Veterans Protest Age Ceiling on Veteran Benefit Claims
Veterans Protest Age Ceiling on Veteran Benefit Claims
The American Legion and Disabled American Veterans have taken a stance against proposals to put an age cap on compensation payments for veterans as well as several other cost control proposals. Representatives from these organization contacted lawmakers to protest these proposals. In particular, they are concerned about the danger to disabled veterans who would be unable to find work because of their disabilities.
Government Accountability Office (GAO) Disuscussions
The Government Accountability Office has considered the age ceiling during cost-control discussions. The option recently appeared in a report from the GAC that detailed inefficient practices of the Department of Veterans Affairs. The report most recently discussed federal benefits for some 318,000 retired veterans who are receiving unemployment.
The Impact of Veteran Benefit Changes
The impact of this potential federal benefits change, would affect recipients depending on their level of disability. Currently, Federal benefits for military personnel focuses on the percentage level the individual receives, which goes off the level their injury or disability. Veterans who fall under 100 percent could see compensation changes.
Injured-unemployed federal benefit recipients receive 100 percent level, even if they have lower rated disabilities, if the disability prevents them from working. Individuals who qualify for additional benefits would have to have at least one service-related disability rated at least 60 percent or two or more disabilities rated at 70 percent. Additionally, these added benefits would only apply to federal benefit employees who could not maintain work.
Right now, individuals who qualify for these fed benefits, receive up an addition $22,000 per year. An age ceiling could significantly affect older veterans who rely on this income. Around 180,000 veterans who receive the injured-unemployed fed benefits are 65 or older. Many older veterans are now filing for benefits because age and military-related disabilities have left the without means to obtain employment.
More Veterans Receiving Assistance
In 2013, more than 400 Veterans over the age of 90 received the VA unemployment benefit. The VA says that the increasing age of individuals applying for and receiving, federal benefits is largely due to increased outreach efforts to veterans with disabilities. Additionally, post-traumatic stress disorder regulations were eased in 2009, which allowed more veterans to qualify for benefits and more diseases related to exposure to Agent Orange, were added to the list of qualifying coverage.
Those vocal against an age cap on the disability benefit for veterans also argue that while most Americans have the opportunity to build a retirement fund, this isn’t always the case for veterans. Especially veterans who have suffered from service-related disabilities.
Those who support the change claim that when older veterans receive benefits, it puts too much pressure on the program. The GAO director of income security audits proposed that alongside (or in place of) an age ceiling, an intent-to-work clause be added in. This would require qualifying veterans to prove they at least tried to find employment before applying for federal benefits.
Veterans can rest easy for now. Despite the heated discussion on the hill, proposed age ceilings are only in discussion right now and anyone current receiving benefits will be grandfathered into the old rules.
More Veteran Related Articles
Applying For Veteran Benefits
The Inherent Dilemmas of a Schedule “A” Appointee – Houston, I Think We Have A Problem!
Honoring The U.S. Commitment to Veterans by Dianna Tafazoli
Highway Trust Fund-Threat to TSP Funds – By Tamila McDonald
Federal Employees should keep a close eye on a Senate Bill targeting highway funds. The bill focuses on funding an extension of the Highway Trust Fund. However, attached to the bill are proposed changes that would affect federal retirement benefits in the TSP.
The proposed changes include cuts and other changes to the TSP retirement programs. These changes to the way yields that are paid to you in various TSP funds could raise about $80 billion, which would cover around two to four years of federal funding for road and bridge projects, according to the Washington Post.
Almost half of the projected $80 billion in money raised would come from cuts to a retirement investment program. In total, the bill would divert some $30 million from the federal retirement plan. The bill has yet to pass, and many lawmakers say they do not believe the bill will pass with the retirement cuts included. Without the cuts, lawmakers will have to find a lot of money elsewhere to replace those funds.
The TSP G-Fund
The proposed changes, originally discussed during the 2016 budget, would affect the TSP G-Fund of the Thrift Savings Plan. Currently, the TSP G-Fund interest rates are based on a four-year average. This makes it a fairly reliable investment with traditionally higher returns. Proposed changes would change the interest rate formula to a three-month average, raising some $32 million over the span of 10 years.
If the bill goes into effect, it would start on January 1, 2017. Other proposals that went through congress included a plan to raise retirement contributions to 6 percent of their salaries. In 2014, new employees had to pay 4.4 percent towards their retirement fund, a 1 percent increase from the year before and a nearly 3 percent increase from 2012. Congress later dropped this proposal and replaced it with cuts. However, some legislators are continuing to push for an increase in retirement contributions.
Other Federal Retirement Proposals on the Table
Some proposals on the table include changing federal retirement benefits and federal annuity formulas to focus on the highest five-years of pay instead of the most current three years. Some reports suggest that the government has filtered some $159 billion from federal employees over the last five years to put towards deficit reduction.
Representative Don Beyer, a Democrat from Virginia, told the Federal Times “congress cannot continue to treat federal employees as a piggy bank to balance the budget.”
The Senate is scheduled to consider a decision on the highway bill that features cuts to the retirement benefits program next week. No set dates have been declared for contribution changes as of yet. To buy more time to consider alternative changes to achieve the money necessary to extend the Highway Trust Fund, the house passed a short-term extension through December. This gives Congress more time to consider retirement benefits as well as other tax issues.
If Congress opts to leave federal employee retirement benefits alone, the bill could allow for the extension of the road program via a six-year bill using money from tax reforms. Federal employees may want to keep an eye on the news to stay up to date on potential changes to their retirement interest rates.
More TSP and Federal Retirement Related Articles
Federal Employee Retirement Checklist by Gary Fouts
What Are Your TSP Options With the New Phased Retirement Program? by June Kirby
Understanding The Thrift Savings Plan (TSP), By Todd Carmack
FEGLI Turns 61
FEGLI Turns 61
The Federal Employee’s Group Life Insurance Program (FEGLI) turns 61 this August. With over 4 million participants, FEGLI is the largest group insurance program in the world. With this big birthday coming up, a few things bear reminding:
FEGLI is a group term policy, which means that the policy does not earn any cash value (like whole life policies.) According to the FEGLI handbook, most new federal employees automatically receive enrollment in FEGLI upon hiring. If you do not wish to pay the FEGLI premium required, you can speak with your human resources office to opt out of FEGLI coverage.
Federal Employees can opt to participate in the basic FEGLI coverage plan and choose optional life insurance programs. In order to choose an optional FEGLI program you must have at least basic FEGLI insurance coverage through the FEGLI program.
The basic FEGLI program face value is equal to your annual salary, rounded up to the nearest $1000 plus an additional two thousand dollars. (If you made $50,600 per year, the face value of your policy would be $53,000.) You are responsible for 2/3 the cost of the FEGLI premium, the government foots the other 1/3 of the bill.
FEGLI Extra Benefit
Federal Employees under the age of 35 qualify for an “Extra Benefit.” This benefit doubles your coverage at no cost to you. Once you turn 35, the additional FEGLI coverage drops 10 percent each year until you reach 45. Employees can also choose to add an additional $10,000 to their face value or add an addition 1 to 5 times their annual salary to the face value of your policy through FEGLI Option B.
Additionally, retired federal employees may continue to receive coverage under the policy if they maintained basic FEGLI coverage for at least five consecutive years prior to the retirement date. There are several different options for retired employees including a 75 percent, 50 percent and no reduction options. If you choose either the 75 percent of 50 percent reduction plan; your FEGLI premium will decline (or disappear) as well.
Federal Employees reaching retirement age can choose to assign their FEGLI insurance to another party. Essentially, you could transfer ownership of the policy to any individual as part of your estate planning. This is a permanent decision; once you assign your FEGLI policy, it is done. You will not be able to change the beneficiary or cancel your policy.
Cashing Out You FEGLI
Retiring federal employees may also cash out their basic FEGLI is a doctor has diagnosed them with a terminal illness. You cannot exercise both special options, only one. Additionally, there are a few options for receiving your living benefit. You can have all of your benefits cashed out or you can select a partial benefit.
The Federal Employees Group Insurance Plan is widely considered one of the most stable federal benefits programs. Since its inception, the government has amended it nearly 60 times! While extensive amendments have been made over its 61-year history, the revisions help adjust to changing working circumstances. The last amendment too place in October of 2008 and added a clause that allowed coverage from some civilian employees working on military operations.
To learn more about specific FEGLI rules, regulations and amendments, check out the FEGLI handbook.
