One of the top five pay-and-benefits questions we get here at Federal News Radio is from people who want to know if they will have time to retire this year before Congress changes retirement rules that would lower their lifetime annuities.
They are concerned about a proposal (which has been around for years) to trim CSRS and FERS pensions for future retirees by basing them on the employee’s highest average 5-year salary. Now annuities are based on the high-3 rule. Such a change, which was included in part of a set of recommendations by the President’s National Commission on Fiscal Responsibility and Reform, would have an impact on everybody working for the government.
In fact, of all the dreadful (and in some cases spiteful) things floating around out there aimed at feds, postal workers and retirees, the high-3 to high-5 is at the top of most people’s list. And while it is a potentially serious threat, it is not the most imminent or most likely one.
Some people have done the math and say they would have to work at least another 6 to 8 months to get the equivalent of their high-3 formula annuity if the high-5 is adopted. Others say it would be worse than that. Some say that with the 2 year (so far) pay freeze, it is a moot point.
But the bottom line is this: If you are eligible to retire, or will be sometime this year, will you have enough advance notice to put in your papers before the high-3 fades into the sunset?
Short answer: Yes. Or at least “very probably yes.” You probably would have weeks, if not months, to make a graceful exit.
Why? Because the talk of going from a high-3 formula to a high-5 formula is just that. Talk.
Nobody has introduced it in Congress. It is not before the House or the Senate. It may be later on, either as stand alone legislation or part of an overall package. Or not. But it is not in legislative form yet. It could be part of the bipartisan package expected from the so-called Blair House group headed by Vice President Joe Biden. Or not.
This is not to minimize the threat. Given the anti-fed mood of the public, press and politicians, anything could happen. But some experts say that a change in the high-3 formula is less likely, and less important, than some of the other things that are working their way through Congress. The biggest threat, and the one most likely to happen, they feel is a proposal dilute future cost of living adjustments for federal retirees (current and future) and Social Security recipients by as much as one percentage point a year.
Today at 10 a.m. on Your Turn with Mike Causey, we’ll ask some of the experts on pending legislation. And we’ll ask them to separate real threats from fiction. We’ll talk with Jessica Klement from the Federal Managers Association and get her to update your legislative score card. Then Steve Watkins and Steve Losey from the Federal Times will give us the view from Capitol Hill and the White House and bring all of us up to speed on what’s happening, and what is likely to happen and talk about the possibility of much higher health premiums for you.
According to NOAA, “tornadoes have been documented in every one of the United States, and on every continent, with the exception of Antarctica.” Why this is a NUF: NOAA went on to say “even there, a tornado occurrence is not impossible.” So there ya go then.
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