Are changes coming to your retirement package?


This week the White House revived old proposals to make feds pay more for, and get less from, their retirement package.

The Trump administration submitted a proposal to Congress that, if approved, would:

  • Eliminate the gap payment — sometimes worth thousands of dollars — that Federal Employee Retirement System (FERS) employees get if they retire before qualifying for Social Security at age 62. Thousands of workers are in jobs such as law enforcement, air traffic control and public safety that force them to retire at age 57. Losing that gap payment would be a major financial blow to most.
  • Require current FERS employees to contribute an additional one percent a year, each year for up to six years or until such time as they were paying half their retirement costs. At the same time their future annuity would be reduced because they would lose even partial inflation-protection.
  • Eliminate cost of living adjustments (COLAs) for current and future FERS retirees starting in 2019. Without regular inflation catch ups, the retirees would lose tens of thousands of dollars over time as prices go up but the annuity stays the same. Most private sector retirement plans have no COLA protection. But unlike the federal programs, CSRS and FERS, most private sector workers don’t contribute anything to their company plan.

National Active and Retired Federal Employees President Richard Thissen and Federal News Radio reporter Nicole Ogrysko will be my guest today on the Your Turn radio show. They will explain the proposed changes, their cost to you and the odds of any one, or all of them, becoming law this year — and what, if anything, you can do about it. The show airs at 10 a.m. EDT at www.federalnewsradio.com or 1500 AM in the metro Washington area.