Retirement Changes Raised

[swsop]

On retirement, CBO raised the possibility of changing the benefit
formula for future retirees to base their annuities on their highest
four or five years of salary, rather than the current highest three.
A high-five base would cost the typical new CSRS retiree about
$6,500 over the first five years and the typical new FERS retiree
about $2,200 over that time, while a high-four base would cost about
$3,100 and $1,100, respectively. It also said that retiree COLAs
could be based on the "chained" consumer price index rather than the
index currently used, which it said many analysts believe overstates
increases in the cost of living. The change likely would mean
shaving about 0.3 percentage points off annual COLAs, CBO said.

Less Money In, More Out?

The report also said that the formula for employer matching
contributions for FERS employees could be revised so that the government
pays its maximum 5 percent share only if employees are investing at
least 10 percent of their salaries, rather than the current 5 percent
(CSRS employees would not be affected since they get no matching
contributions). CBO said that would be more consistent with matching
arrangements in the private sector. It also raised the possibility of
increasing the required employee contributions toward retirement by
0.5 percentage points, phased in over three years, which it said would
similarly make budgeting in the federal retirement program more
similar to private sector retirement. Such a change was adopted as
part of a 1997 budget law, although the increase later was rescinded.

Swsop

 

[robo]

Many other items are on the spending options list. Doucument is over 300 pages, but if you just read the index it gives you an idea of just how much is on the table. Now passing bills is another story.

http://www.fedsmith.com/articles/references/BudgetOptions.pdf

How Safe Are Your Federal Benefits? Don't Answer Too Fast

By Ralph Smith

3/1/2007

Click here for more articles by Ralph Smith

You can have daily headlines from FedSmith.com delivered right to your desktop each business morning. The service is free and you don't get junk e-mail as the price of your subscription. Just click here to sign up!
Uncle Sam needs money. Where is it going to come from? A few billion in savings could come by reducing federal benefits according to the Congressional Budget Office (CBO)

There is no shortage of options. But some of these options would hit the pockets of federal employees if they were to see the light of day. The CBO has pulled together a list of options for increasing revenue and decreasing expenses. Keep in mind, these are only options. Some have been considered before and did not get very far. But, to keep up with events that could have an impact on your financial future, remember that what Congress gives, it can also take away. Here is a quick summary of some of the more significant proposals for federal employees.

http://www.fedsmith.com/

 

[Brett]

Changing from a High-Three average to either four or five years can be done with just a stroke of a pen. If it isn't done in the next few years, it won't effect the CSRS folks at all. But rest assured, the Government will try to tinker with the amount it owes us until the day we die. It's the young folks who are really going to have to pay.

I have been a fiscal conservative all my life. When Washington wakes up from the drunken binge of spending, most of the people responsible will either be out of office, or dead. I watched the 60 minutes report Sunday about what the GAO head is saying about America’s future; and it ain’t pretty. Sorry to be so pessimistic.

 

[nnuut]

Changing from a High-Three average to either four or five years can be done with just a stroke of a pen. If it isn't done in the next few years, it won't effect the CSRS folks at all. But rest assured, the Government will try to tinker with the amount it owes us until the day we die. It's the young folks who are really going to have to pay.

I have been a fiscal conservative all my life. When Washington wakes up from the drunken binge of spending, most of the people responsible will either be out of office, or dead. I watched the 60 minutes report Sunday about what the GAO head is saying about America’s future; and it ain’t pretty. Sorry to be so pessimistic.

They will change this over my dead body! Who are we are we, the ones to pay for the war? Just try it you creeps!

 

[rokid]

With most of the country getting screwed by their employers, it's going to be real hard for the average person to sympathize with government employees - decent pay, good security, employment rights, good pension, great 401K, and Social Security. In addition, it's easy for politicians - Democrats and Republicans - to grandstand by attacking the pay and benefits of government employees - even if it doesn't make much difference. They really worked us over in the 1970-80s.

 

[swsop]

Potential Changes to Pay Practices Explained

The House Armed Services Committee said in a statement that
while DoD could carry out a pay for performance system for
those under NSPS under the language, it would have to do so
under the general policies that have been used in alternative
personnel policy "demonstration projects" at DoD and elsewhere.
That would mean, among other things, that an agreement would
have to be negotiated between the department and the unions.
"In addition, the modified NSPS pay-for-performance system
would guarantee that employees continue to receive their annual
nationwide and locality adjustments," the statement said. "The
committee makes this recommendation out of concern that under
the current implementing regulations for NSPS, it is possible
for employees to receive a bonus, but not receive a nationwide
or locality adjustment. Such a practice affects the employee's
base pay, which is used for calculating retirement benefits."

Retirement Effective Date Policy at Issue

The DoD bill also contains government-wide language that DoD
requested to change the current policy regarding when annuities
for new retirees begin. Under present policy, an annuity for a
retiring CSRS employee begins on the day after retirement if the
person retires within the first three days of the month; otherwise,
it begins on the first day of the next month. Under FERS, an
annuity begins on the first day of the month after separation
regardless of what day of the month the employee separated (under
both systems there are exceptions for those separated involuntarily
or because of disability). The change would allow annuities to
begin on either the day after retirement or the day after age and
service requirements are met, for those previously separated from
service but not drawing an annuity. "The current deviations in
annuity commencement dates between retirement systems results in a
cumbersome administrative human resources problem," the committee
said.

SWSOP