Over the years, politicians (both Democrats and Republicans) have taken aim at the civil service pay and benefits package. There has been talk, sometimes serious, sometimes for effect, but little else. And while many of the threats were serious at the time, virtually all fizzled. They are often recycled year-after-year in somebody’s budget or blue-ribbon panel.
For the most part, they (angry politicians and think tanks with genuine agendas) haven’t laid a glove on feds or retirees. But just to be on the safe-side, check your CSRS, FERS and CSRS Offset retirement package from time to time. Just to see who may be chipping away at it. While other civil service benefits have survived proposed changes, the government’s retirement program — the jewel in the crown of all federal benefits — may be a serious target in the near future, regardless of who’s in the White House or which political party controls Congress.
First, the good news:
Although the size of its workforce has shrunk, the IRS is still in business. Workers at the Treasury department, the DEA, Interior, HHS and all other federal agencies still earn vacation time at the same rate they did 30 years ago. Defense Department workers, like all other feds, are still hired and fired the way they were back in the day. Many changes in civil service rules and perks have been proposed. Few if any happened. In fact, some benefits improved over the years.
Federal workers still get the same amount of vacation time. That hasn’t changed. And it’s generally more available than to the average private sector workers.
The amount of sick leave feds get hasn’t changed over the years except for the better. People are now able to apply unused sick leave to their service time, boosting lifetime retirement benefits.
Many private sector companies have use-it-or-lose-it policies regarding both sick leave and vacation. If they even offer it.
In-grade pay raises (a target of the Carter administration) continue to happen on time. The vast majority of feds still get the 3 percent pay-adjustments after every one, two or three years in grade — even if a pay freeze is in effect.
Threats/promises to abolish certain agencies or make it easier to fire pointy-headed bureaucrats have fizzled year after year.
Congress and the White House have overseen several January pay freezes. And retirees have gone without COLAs (this year, and maybe next too) because of low inflation. But for the most part, few things have changed and changes that have been made have been improvements. But, and there is always a but, stay alert:
Now for the maybe-not-so-good news. The dark cloud on the horizon. The unwelcome foreign object in the punch bowl.
Earlier this month, The New York Times reported that the Tennessee Valley Authority, an important but little known federal corporation (outside the Tennessee River valley region) is looking at reducing benefits to save the government-owned corporation lots of money. Many state and local governments have already trimmed pension benefits for both current and future retirees. Many private firms have done the same. They’ve gone from defined benefit plans to total emphasis on Social Security and 401k plan investments by workers. Defined benefit plans, like the federal governments’ CSRS, Offset and FERS programs, mean workers are promised a certain percentage of their salary as a retirement benefit, based on how long they work. “Now, “ the Times said, “that movement may be breaching yet another firewall: the pension of federal employees.”
IF the TVA were to make the change — “if” being the key word in situations — somebody not too far down the road is likely to say Uncle Sam should take the same route. The Times story pointed out that downsizing TVA pensions was suggested by its CEO who, it said, got a compensation package of $6.4 million in 2015. That compares to President Barack Obama who gets $400,000. To read the Times piece, click here.
Federal unions, and groups representing managers, executives and other groups of federal civil servants know this is a challenge they haven’t faced before. A spokesman for the National Active and Retired Federal Employees said, “We are watching this very closely.”
Lots has to happen before the TVA changes benefits for its 11,000 active and 24,000 retired employees. And any similar changes, cuts, in the federal retirement program would face an uphill fight in Congress. And the courts. But, better safe than ignorant.
Don’t panic. And definitely don’t quit your daytime federal job. But stay tuned.
Nearly Useless Factoid
By Michael O’Connell
Ray Brown & the Whispers’ rockabilly version of the “Tennessee Waltz” was a #4 hit in Australia in 1966.