Federal Report

One-term Trump?

Senior Correspondent Mike Causey says Trump should keep his hands off the federal retirement program, at least if he wants to stay in power.

Mike Causey@mcauseyWFED

May 31, 2017 1:00 am

2 min read

If President Donald Trump wants to:

1) Avoid any possible impeachment action, or

2) Help Republicans retain control of the House and Senate in 2018, or

3) Score another electoral vote win in 2020, then,

He might want to back off his plan to put millions of current and future federal retirees on a zero-calorie COLA (as in cost-of-living-adjustment) diet for life. Why? Because federal retirees and their families are a major factor — both in finances and voting — in most states and many communities.

The budget the president sent Congress last week calls for a 1.9 percent pay raise for non-postal civilian federal workers and a 2.1 percent increase for uniformed military personnel. That’s the good news. In full.

He also wants to reform the giant federal retirement program by making four major changes:

1) Increase employee contributions to their retirement fund by 1 percent a year, each year, for the next six years. You can do the math to see how that (along with higher health premiums each year) would cut into your take-home pay, which is the only part of your check the landlord and butcher care about.

2) Eliminate any and all future inflation adjustments for people under the Federal Employees Retirement System. While the majority of current retirees are under the older CSRS (Civil Service Retirement System) plan, the majority of current workers, people still on the payroll, are under FERS. If Congress approves the plan, they would shift from a diet COLA system to a zero-COLA, meaning no increase in the annuity regardless of any increases in inflation. For life.

3) Return to the system whereby retiree benefits are based on the worker’s highest five-year average salary. Some years ago, in a spurt of generosity, Congress said that the starting annuity would be based on the employee’s highest three-year average salary. While the change would mean little to most people, especially if pay raises were minimal or zero, it strikes a chord with many workers.

4) Last, but not least, the so-called FERS or Social Security supplement for workers who retire before age 62 would be eliminated. That supplemental payment, which can be in the thousands of dollars, is important to lots of employees contemplating retirement. And it’s critical for thousands of LEOs (law enforcement officers), federal firefighters, air traffic controllers and others in critical, high-stress and/or dangerous jobs who are often forced to retire well before age 62.