2011: A wash for feds

The difference between what could happen and what actually happens can be significant. Take you, your pay, benefits and job security, for example.

Two years ago, feds and retires enjoyed their best-ever year courtesy of Congress and the Obama administration. The legislative stars aligned and half a dozen items (some that had been pending on the back burner for years) became law. Among them, Congress:

  • Permitted workers under the Federal Employees Retirement System (80 percent of the total workforce) to credit their unused sick leave toward retirement. That will have the effect of boosting annuities dramatically for many future FERS retirees.
  • Set up a system to phase out tax-free pay differentials for nonpostal feds in Alaska, Hawaii and Puerto Rico and replace them with taxable locality raises that will be considered part of salary for figuring their high-three retirement average.
  • Permit FERS employees who left government, then returned, to buy back their previous service time for retirement purposes. This has benefited many Clinton-era appointees who left for 8 years, then returned with the Obama administration. But it also applies to career FERS employees who have moved in and out of government.
  • Authorized a system (at the discretion of each agency) whereby workers under the older Civil Service Retirement System can transition out of government by going part-time without it having an impact on their final pension.
  • Gave agencies the authority (already possessed by Defense) to rehire annuitants for a limited period and permit them to get their full federal salary plus their federal retirement income.
  • Set the stage for introduction of a Roth option as part of the federal Thrift Savings Plan.
  • Also, white collar feds got a pay raise that went into effect in January, 2010.

Happy days were here again. But not for long.

Two years later, at the start of 2011, it became apparent that feds were in for a hard time. There were fears that the two-year pay freeze, imposed by the White House, might be extended another year. Or two. Or three.


The new Congress was looking at a variety of proposals (some endorsed by the Obama administration), which include limited or widespread hiring freezes, a reduction (of up to 10 percent) in the federal payroll, changing the retirement computation formula from the employees highest three-year average salary to a high-five system, increasing the retirement contribution workers make to their CSRS and FERS programs, eliminating a special cash “gap” payment for FERS employees who retire before becoming eligible for Social Security, raising the retirement age, privatizing (again) some IRS tax collection functions and also eliminating TSA personnel at airports and replacing them with contract workers. Etc.

Unions and groups representing feds and retirees have warned about pending cuts. The media have emphasized a worst-case scenario for just about everything. That’s what we do. We’ve braced for shutdowns and draconian changes in pay and retirement rules. Each day we were on the brink of career disaster. And what happened.

Not much.

Congress wound up doing nothing to, at best, very little this year. It bickered, fought and jockeyed trying to make the other political party look bad. In the end, both Democrats and Republicans succeeded. And managed, despite every intention, not to lay a glove on you.

So relax. Until next year (which happens to be next week) when this will probably start all over again.


Why are #2 pencils not #1? The Straight Dope explains that #1 pencils do exist already. “The #1 pencil has the softest and darkest lead, but most people find that it smudges too easily and needs resharpening too often to make it appropriate for everyday writing,” according to the article. Which means you may find the #3 too hard and even more difficult for everyday writing.


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