Federal Diary Live
Wednesday, January 23, 2008; 12:00 PM
The Post's Stephen Barr writes the
The transcript follows.
Stephen Barr: Thanks for joining in this discussion today. The big news, obviously, is the roiling stock market. Congress also has sent the amended defense authorization bill to the White House, ensuring that military personnel will get their full pay raise and bonuses. With that, let's go to the questions and comments. Again, thanks for logging in here today.
Northwest Washington: I am curious about my retirement. Really I am afraid for myself and millions of others. I am Federal Employees Retirement System as opposed to the old/better plan. Ultimately I get the 401(k)-like contribution/match and annuity based on my years of service, times 1 percent of my annual salary. How does the fed account for the annuity portion? Is it an accrued liability, or simply a cash payment from the current year budget as needed (because the fed makes it own money)?
Stephen Barr: You are in good shape and should not worry. FERS is a fully funded pension program; employees and agencies pay into it each payroll period.
The Civil Service Retirement System does have unfunded obligations, but because no one expects Uncle Sam to go out of business, people don't worry about that trust fund failing to fulfill its promises.
Data collected by the Congressional Research Service suggests that your FERS pension, Thirft Savings Plan savings and Social Security more or less should equal the old CSRS pension. So keep saving in the TSP!
Kingstowne, Va.: Generally speaking, what long-term effect does a federal rate cut have on our TSP funds? Should I do some panicked day-trading, or revel in the fact that the money I'm regularly putting into TSP is purchasing more shares for the dollar?
Stephen Barr: Hopefully the Fed's rate cut will help slow down the bear on Wall Street. The important thing is to not panic, but evaluate where you are in life. Time is on the side of the young, but those of us in mid-career or nearing retirement need to think about diversification and how much risk can be tolerated. Today's Post offers some dos and don'ts on the front of the Business section, so check that out.
Columbia, Md.: I have a two part question: Why is it that the statements for TSP accounts do not have the amount of money that is taken out of the accounts and when? And why is it that one cannot change their annuity? One comment: I think the TSP should provide participants more information about the purchase of an annuity. Thanks.
Stephen Barr: As an outsider, I don't know what kind of information the TSP provides in its statements, so I'm not much help. Does your online account keep a record of that for you?
A number of Diary readers think the TSP could be more friendly to participants and explain policies and procedures from the point of view of the person rather than the tax code. Based on what I've heard at TSP board meetings, the staff is looking for ways to redesign the Web site and improve communication with participants.
Arlington, Va.: I wrote last week to ask your advice -- am the high-level GS without much to do. Took your advice, went for a detail, and now am being frozen out in my current position. A bit of retribution going on for daring to leave, and I am being told that the one project I had is going to be canceled because I apparently am "the only person who can do it," which is nonsense. So, if I come back, I'll really have nothing. Reach for the brass ring and get slapped...
Stephen Barr: I'm dismayed by this turn of events, and regret that my idea has caused you some career harm.
The management team doesn't sound too enlightened -- freezing out a GS-15 who wants new challenges? Hopefully you have some wise friends in your shop and can figure out your next step. If retribution is their management style, then hopefully your detail will lead you to a better place.
Best of luck!
Anonymous: With what's happening in the stock market, should a person who will retire in the next few weeks under the Civil Service Reform Act quickly move his TSP money out of stock and into government securities and/or bonds to keep it safe during this tumultuous time?
Stephen Barr: Experts usually caution not to sell during a downturn if you can help it. You have a pension from CSRS, so does that make you feel comfortable to continue to take risks in the stock market? If not, the G Fund is an option. Also check out the L Fund Income option, which might provide a better return over a longer period.
Part of your decision may rest on when you expect to begin withdrawing from the TSP. If you are a "young" retiree, you may want to take that into consideration.
Silver Spring, Md.: For those of us who recently have retired but are choosing to leave funds in the TSP accounts, how do you think the volatility in the international arena will affect monies in the TSP's International Stocks' earnings?
Stephen Barr: The international fund dropped 2.25 percent last month, and since it is an index fund, the returns will be close to those in the overall international market. Over the entire 12 months of 2007, the I Fund was a great winner -- but who knows what 2008 will bring.
Virginia: Suppose I retire now (55); can I wait until I'm 67 years old to start receiving TSP payouts? The Social Security Administration said I could, but TSP said no. SSA allow you to wait for Social Security benefits.
Stephen Barr: You can leave your money untouched in the TSP until you are 70.5 years old; at that point, the tax code requires you to start withdrawals. Check out information on withdrawals posted at the TSP Web site. I think TSP will even help you calculate a minimum withdrawal at 70, if that suits your fancy.
Alexandria, Va.: Hello. I have a question about FEGLI (Federal Employees' Group Life Insurance Program): Why can't you find out when the next open season is going to be? Why is it such a state secret? I've called the Office of Personnel Management and my agency's HR office; no one knows when its going to be. ... Is this any way to run a government?
Stephen Barr: FEGLI does not have open seasons except when premiums or benefits change. You may increase your coverage if you meet certain criteria, which are posted on the OPM Web site.
Seems to me your human resources office should have an explanatory fact sheet on FEGLI, but...
Washington: Re: The high-level GS-15 ... maybe that person is not as good a manager as she/he thinks. If there is nothing to do at work and no future assignments, it appears she/he is being forced out, perhaps for a reason?
Stephen Barr: It's possible, of course, but I'm told repeatedly that agencies are shorthanded and need experienced hands. So it seems there ought to be some future assignment that this person could fill, yes?
Washington: I'm a fed in a large agency, whose career interests and training leaves me few other places to work. I'd like to get out of my current area, but my division would prevent me from lateralling internally. My question is, if I get a promotion in a different area, can my current boss (with HR's concurrence) unilaterally promote me and then block me from lateralling to the new area?
Stephen Barr: I don't know. If you can get a promotion in another area, then isn't that a deal to take on a new assignment/job?
To paraphrase a previous poster, is this anyway to run a government?
Washington: What happened with USAJOBS Web site? Instead of the "agent" faithfully sending me the jobs in my specialty and grade, it now sends absolutely unrelated job codes and grades. Is it just me or is is it systemwide?
Stephen Barr: USAJOBS is not aware of a systemic problem. I would put in a phone call to OPM, 202-606-1000, and ask to speak to the communications or external relations office.
Re: 2008 COLA: Hi Stephen. Maybe it's just me (actually I am sure it's just me) but does it make sense for President Bush to give us a big cost of living adjustment (on his way out of office) when the economy right now is heading into a recession? As a long-term Fed, I'll take the money and place it into my TSP account (G Fund) and hope for the best. Just seems like a not very well-thought-out decision. Only time will tell.
Stephen Barr: You raise an interesting point. Basically, the government is not market sensitive. Because it takes the Congress and the White House about a year to put together a budget, the White House takes wage-growth data from a prior period as the basis for its pay raise recommendation in the budget.
Put another way, your 2008 pay raise is based on 18-month-old economic data.
Seattle: Any news on how that student loan forgiveness is to be implemented? Are their restrictions on whom you consolidate your student loans with, or are there only certain locations you can do this?
Stephen Barr: It is rather complex. Your best bet is to call the Education Department call center, 1-800-433-3243, and explain your situation and let them walk you through the rules. Hope that helps!
Washington: About your disability hiring column, well, Section 501 required an affirmative action program. OPM and the Equal Employment Opportunity Commission don't give agencies incentives or rewards to comply with it.
washingtonpost.com: A Troublesome Decline in Disability Hiring (Post, Jan. 17)
Stephen Barr: Good point.
Washington: I discovered some insurance changes that weren't mentioned in the chat by the director. The out-of-pocket deductible increased from $250 to $300, and the catastrophic increased from $4,000 to $4,500. Now I am wondering what other hidden changes occurred.
Stephen Barr: Don't know the exact context for your comment, but I assume you are talking about an insurance plan in Federal Employees Health Benefit Plan. Each plan should include a page in its brochure listing changes in rates and benefits, so it is vital to read that information during the annual open season.
OPM sometimes allows plans to increase copays and deductibles to offset or reduce a rise in premiums.
Washington: Regarding FEGLI: Open seasons are rare (once every 10 years or so), and for a reason. If one could change life insurance regularly, then people would increase coverage markedly if they received bad health news.
Stephen Barr: Interesting point. Given the cost of life insurance, I always assume people buy coverage that protects their family from immediate financial crisis, and that is balanced against other assets that may be available to survivors.
Arlington, Va.: I have been having the same difficulties with USAJOBS that the previous poster described.
Stephen Barr: Thanks. OPM tells me that they are looking into the matter.
Washington: Re: the High level GS-15. Stephen, in answer to your question -- yes, there is a shortage of good managers and I emphasize good. I am also a high level manager in the federal government, and in my experience -- sad to say -- many times managers are reticent to address shortfalls in other senior managers' performance. Many times it is hoped the employee will find another job.
Another point is that agencies tend not to want to detail their best workers, so it is not surprising this person was let go to another agency -- probably with the hope she/he would not return. I am just saying from a management perspective there "red flags" all over the place for this person. I would recommend she/he sit down with their manager and discuss the problem.
Stephen Barr: Thank you; good insights and some good advice. Appreciate you took the time to share your experience.
Once again, we've run out of time today. Thanks for all the comments and questions! We'll be back here at noon next Wednesday to continue the discussion.
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