FERS hit list: The usual suspects plus a new twist…

In addition to resurrecting old threats to cut federal pay and benefits, President Trump’s new $4.4 trillion budget would also permanently shrink future retirement benefits of current workers while shaving the cash value of any lump sum annual leave payment they get when they retire.

If Congress approves, current and future employees under Federal Employees Retirement System (FERS) would get smaller starting annuities when they retire and those pensions would lose all the protection they now enjoy from inflation. Cost-of-living adjustments (COLAs) would be eliminated for FERS retirees and reduced for those under the Civil Service Retirement System (CSRS). And even with those changes, FERS employees would be force to contribute more to their own retirement.

The budget calls for a new sick and annual leave policy for feds which it says are “disproportionate to the private sector.”  All federal employees receive 10 paid (federal) holidays and up to 13 sick days annually, as well as 13 to 26 vacation days, depending on tenure. This budget proposes to transition the existing civilian leave system to a model that has worked well in the private sector, which is to grant employees maximum flexibility by combining all leave into one paid time off category. This would reduce total leave days, while adding a short-term disability insurance policy to protect employees who experience a serious medical situation.

English language translation to come. Just not right now…

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The budget doesn’t say exactly what “one paid time off category” means. But it does give somewhat creepy clue by saying it would “reduce total leave days” by throwing all the sick, annual leave and holidays into the same blender.

The budget proposes forcing FERS employees to pay up to contribute more of their salary into the FERS retirement fund. It proposes eliminating all future cost of living adjustments for FERS retirees, present and future. It proposes basing the starting annuity of retirees on salary and the highest 5-year average salary. Currently the pension is based on the employees time in government and highest 3-year average salary.  Depending on tenure and salary, that change could reduce the starting pension of some workers by thousands of dollars a year. Loss of inflation-protection would reduce the purchasing power of the annuity quickly over time.

The federal benefits package — especially retirement and vacation — is indeed generous compared to many private sector plans.  But it may strike some federal workers as a tad hypocritical that politicians, who set their own hours in which long weekends are the rule, not the exception, would have the nerve to tamper with the rank-and-file’s benefits.

Nearly Useless Factoid

By Nahal Amouzadeh

A penny costs more to manufacture than its worth; it took 1.5 cents to manufacture a single penny in 2016. In 2017, it rose to 2.4 cents.

Source: CBS News