Retirement changes 2017/18: What are the odds?

Since the late 1990s some people have predicted a Retirement Tsunami disaster for Uncle Sam — and the people the government serves. The idea was that the aging federal workforce would produce a human tidal wave of retirements.

The downside of the feared Tsunami was that the government would lose tens of thousands of its best, most dedicated people. The folks with the institutional memory.

The upside of the elderly exodus is that it would open up tens of thousands of jobs to younger workers who would bring in new energy and high-tech skills.

It didn’t happen.

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The next human crisis involving the bureaucracy came from people who feared that in the unlikely event that Donald Trump actually became president there would be another kind of tidal wave, this one made up of long-time career feds who would flee the government before they got mired down in the promised draining of the swamp. The increase in retirements was supposed to begin as soon as the November election returns were official and pick up speed in January when the new president was sworn in.

It didn’t happen.

With few exceptions, the number of federal (and postal) workers who are retiring each month has been at or below the number leaving in the same months of last year.

In November 2015 B.T. (Before Trump) the Office of Personnel Management received 6,019 retirement applications. In 2016, after the election results were known, the number of claims received had dropped to 5,065. Not much, but less than some expected.

The number retiring in December 2015 was higher by a few hundred than in 2016. January is one of the most popular months to retire. In 2016, 15,423 retired that month compared to 15,317 last year. Again, not much difference but definitely not a surge of escape.

But things change and long-dormant predictions by Washington’s wise men/women sometimes do eventually come true.

Congress and the White House are considering a variety of plans that would alter, in some cases dramatically, how much of their own salary federal and postal workers contribute to their civil service annuity. One plan would boost the contribution by 6 percent over a six-year period.

That’s a lot of money and the higher contributions could eat up any pay raises workers got during that period.

Another plan would eliminate the Social Security gap payment (often worth thousands of dollars) to feds who retire before age 62. One would trim (by 0.5 percent) the annual cost of living adjustment that CSRS retirees get in the future. Another would eliminate any COLA for FERS retirees whose annuities would shrink (in purchasing power) because of inflation.

There is even talk of doing like so many private companies have done: Drop the employer-sponsored pension, giving employees an enhanced (maybe) Thrift Savings Plan and Social Security. FERS would disappear, presumably for new hires. But maybe others too?

And there’s a lot about the proposed changes that we don’t understand. For instance, many workers are fearful of the plan that would base future annuities on the employees highest five-year average salary instead of the current high-three program. Tuesday’s column explained that financially it is not that big a deal, if it happened. Certainly not worth retiring to beat the change.

Because of these pending (maybe) changes, lots of people are wondering if they have time (and if it is a good idea) to get out now. Retire before any of the changes are made. But what are the odds? What don’t we know, or haven’t considered? What are the odds anything will happen to the retirement program this year? Or next?

To find out we’ll talk with Jessica Klement of the National Active and Retired Federal Employees Association. She’s legislative director of NARFE and probably knows more than anybody around about political and fiscal pressure to slim down/eliminate portions of the federal retirement program.

Klement will be our guest today on our Your Turn radio show at 10 a.m. EDT.

You can listen either at federalnewsradio.com or 1500 AM in the D.C. area. You can also talk to her (or me) directly by calling 202-465-3080 or send me an e-mail (mcausey@federalnewsradio.com) before showtime.

Nearly Useless Factoid

By David Thornton

The tree of Coffea arabica (coffee trees) will grow fruits after three to five years, and will produce for about 50 to 60 years (although up to 100 years is possible).

Source: Wikipedia