Retirement plan still a political target

For several nail-biting months last year, the federal retirement program was in deep trouble. And it was not the usual political drill.

Politicians had penciled in the FERS and CSRS retirement plans (and by definition you) for some heavy-duty fiscal, non-cosmetic surgery. With one political party in control of the House, Senate and White House, the odds were in favor of the surgeons rather than the patients. When finished — if it had taken place as planned — you would have survived. But you would be in much, much worse shape than you are today. For life.

Through most of 2017, the White House and Congress at different times in different plans wanted to eliminate all inflation-protection for FERS retirees. And reduce it for those under the CSRS program.

There were also serious proposals to eliminate the Social Security gap payment for feds who retire (or are forced to retire) before age 62. That would have been a major financial blow to law enforcement types, firefighters, air traffic controllers and others required to retire at age 57. Another serious proposal would have been to raise the contribution rate for workers under FERS. Any combination of the plans would have meant federal and postal workers would pay more for their retirement while getting smaller annuities.

Groups representing feds and retirees (unions and associations) fought a successful rearguard action blocking all the proposed cuts. But it was a very close call and most expect Congress will try again.

The saving grace, for now, is that thanks to the mid-term elections and what has become its normal working schedule, the House and Senate won’t have much office time this year to do anything. A record number of key House members (committee chairs and the like) are retiring and the results of the Senate runoff in Alabama have given Democrats (correct or not) hope of cutting into or changing control of at least the House. The House calendar shows only 121 working days (out of 365) available to work on anything, including revived cut-the-retirement-package bills.

In addition to time being on your side, the compromise budget deal OK’d by the Senate earlier this week is silent on any cuts or changes in the federal retirement program. That doesn’t mean it won’t come up as a separate issue, but it definitely tilts the odds that this will be a no-fed-bashing year!

Last year, Pam J., asked Federal News Radio how feds could get “information out to the mainstream media (tv, newspapers, radio) regarding the proposed cuts in retirement benefits for federal employees. It seems every federal employee I speak to is unaware of what the Trump administration is trying to do.” She said if any changes were going to be made, they should be prospective (applying to future hires) and not impact current employees who “signed up for federal employment based on the retirement promises and it is unconscionable to take that away from them at this point in their lives.”

I answered her saying if the mainstream media picked up, understood and made the retirement threat to feds a top priority it could backfire! Why? Because lots of them — especially large but financially struggling newspapers — don’t even have employee retirement plans anymore. The trend is for companies to drop retirement plans because they are so costly. Some of the biggest — like The Washington Post — have eliminated their once-generous defined benefit plans. Now employees must make do on their 401(k) plans and Social Security. Or find another line of work.

Most of the print media, thanks to information from conservative think tanks, already believe feds are overpaid. Or that the civil service benefit package is too generous compared to, well, their own. It may not be fair. It may not be right. But that’s what a lot of people in the media believe.

So, if you appeal to someone in the mainstream media for help protecting your retirement plan try to find out, do a couple of things first:

  1. See if you can find out of the media outlet understands that Uncle Sam doesn’t do retail, which is why salary matchups, between NASA and Walmart for example, aren’t very valid.
  2. Make sure they understand that unlike most private sector workers with pension plans, feds help pay for their benefits, which were promised as part of the work contract.
  3. Last, but maybe not least, make sure that the outlet you are asking to tell your story is likely to understand and be sympathetic. That it has a retirement plan of its own. If not, maybe you should join one of the unions or professional associations that have fought off assaults on the retirement plan for the last 30 years. That would be a lot less expensive than 20 or 30 years in retirement without a cost of living adjustment.

Nearly Useless Factoid

By Michael O’Connell

The earliest historical reference to kumquats occurs in 12th century Chinese literature.

Source: Wikipedia