Nervous in the (Federal) Service!

Federal workers are in for a flat-line pay raise next year while retirees are almost certain to take a cut in take-home pay, which for some will be the second y...

Tell federal workers that their take-home pay is likely to drop next year and they get upset. Tell federal retirees that their take-home income will almost certainly drop next year and they too get upset.

What’s with you guys?

Last week we noted that due to medical inflation, federal health insurance premiums are going up next year. In some cases, for some plans, they are going up a lot.

But while your health premiums are going up, your income isn’t likely to keep pace. Especially if you are retired.

Federal workers are on track for a 1.4 percent pay raise in January – if Congress, which has tried 4 times to kill it – permits.

Federal and military retirees didn’t get a cost of living adjustment this year (2010) and they won’t get one in 2011. But while deflation stalks much of the economy, medical inflation continues to rise. Many private companies and state governments have already announced hefty premium hikes for 2011. You’re next. For details on pay, COLAs and premiums, click here.

So how are feds taking the news of a flat-line pay raise? And what do retirees say about the prospect of (once again) going in the hole?

Like this:

  • “I just read your column on, Pay & Pension Checks: Going Down?

    “I just wanted to let you know that last year with the raise, health premiums, and other increases, I took home a whopping extra 2 bucks. So, you are saying that this time, I’m going to go backward??? Dave, USMC

  • “Health insurance premiums are (or is) the fastest growing item in most people’s checks. Asking why just leads to a fog of reasons, and besides, whyever the why, you can’t affect it.

    “What is scary is these double digit increases in a period of near deflation. When the fire of inflation again ignites, the effect on health insurance premiums should be something to marvel!” IRS Mike

  • “Is is true that a new bill passed will require taxpayers to pay tax on the employers portion of health insurance? Will the flexible spending account money become taxable now too?” Sandi S.

    (Short answer: Yes, but probably No!) We dealt with this last week. Check out the answer from the expert by clicking here.

  • “I’ve been retired (Department of Defense) for three years. The first year I got a 5.58 percent cost of living adjustment. The next year, 2010, I got nothing. Now I read that there will not be a COLA in 2011 but that health insurance premiums are going up, again! I don’t get it. If inflation is flat, or if as you say we have deflation, how to explain higher and higher medical costs. Am I missing something.” Fuming in Ft. Belvoir, Va.
  • “I know the COLA computation is confusing. But, are you saying that medical care is NOT one of the items tracked? How utterly ridiculous is that?” Sox Fan

    (Medical costs are just one of the many items that make up the “market basket” of goods the Bureau of Labor Statistics uses to determine the Consumer Price Index. Overall, according to their data, prices for most things are steady or have decreased.)

Listen To Your Money

Greg Long, executive director and Tom Trabucco, director of external affairs for the federal Thrift Savings Plan are guests on today’s For Your Benefit program. They’ll talk about automatic enrollment, the TSP’s new website, the performance of your C,S,I,G and F funds and the growing popularity of the self-adjusting target funds. That’s 10 a.m. EDT here on WFED 1500 AM (in the Washington area) or worldwide on the internet at www.federalnewsradio.com

To reach me: mcausey@federalnewsradio.com


Nearly Useless Factoid
by Suzanne Kubota

Welcome to August. It’s National Panini Month.


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    Courtesy of: https://www.justice.gov/archives/olp/staff-profile/former-assistant-attorney-general-office-legal-policy-hampton-y-dellingerHampton Yeats Dellinger

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