Federal Diary Live
Wednesday, April 30, 2008; 12:00 PM
The Post's Stephen Barr is the author of The
The transcript follows.
Stephen Barr: Thanks to all joining in this discussion today. We spent part of last week's hour discussing the Hatch Act and some of you asked about an investigation of Lurita Doan, the GSA administrator. She resigned late yesterday, and a report on her departure has been posted on washingtonpost.com, for those of you interested in that case. With that, we'll go to the questions and comments.
TSP: Part of my job as a budget analyst is to track the payroll expenses. I've noticed that that the lower-graded FERS employees (especially those without college degrees) are not contributing to TSP. I definitely support the automatic deductions of 3 percent -- these employees are under the assumption that because they work for the government they will receive a decent retirement annuity.
Additionally, there needs to be more education about the TSP -- in the Department of Defense, the HR people at are merely administrative people, and do not have the background to explain the financial aspects of TSP and differences in FERS vs. CSRS retirement. I believe strongly that agencies need to bring in a financial expert (at least once a year), to educate these employees and new employees about TSP, the various investment options, etc. Currently, these people do not understand the consequences of not contributing until they attend a retirement class. I know that as a very highly paid employee, I cannot depend on my FERS pension alone to survive -- I need my TSP savings.
washingtonpost.com: TSP Wants Agencies to Automatically Enroll New Employees (Post, April 30)
Stephen Barr: Your point is well taken. In fact, one of the subcommittee members at yesterday's hearing asked for more information on why so many federal employees never join the TSP.
Some years ago, I recall data showing that younger and lower paid employees are the least likely to save for retirement. As you point out, that is a shame because they have the time to build up retirement savings, and they need to do so because FERS is not as generous as CSRS in its basic pension.
Financial literacy, as the experts call it, also is essential. A union leader yesterday said he was worried about the centralization of human resources offices because he thinks it has made fewer personnel/TSP experts available to counsel new hires. And HR types tend to focus on making sure people sign up for medical and life insurance, and so the TSP, which involves a few more decision steps, may get overlooked or shortchanged.
Suitland, Md.: What happened to the ruling regarding allowing 12 weeks of maternity leave for federal workers?
Stephen Barr: The unpaid leave policy is still on the books, but legislation in the House to provide four weeks of paid parental leave and the conversion of eight weeks of sick leave to parental leave has not been acted upon, beyond a committee vote.
Cost concerns are an issue, and sponsors are waiting for a formal estimate before they work out their next steps.
Cube Land: I have a co-worker sitting less than 10 feet away from me who noisily clears his throat all day long. He sometimes does it more than three times a minute. He is a nice man, but it's ridiculous. I use noise reduction headphones and try to listen to music and/or talk radio all day, but I can still hear it. It is driving me crazy. Can you throw this out to the peanut gallery and see if they have any suggestions?
Stephen Barr: Okay, peanut gallery, what would you do?
Bismarck, N.D.: Last year I accepted an early retirement/buyout offer from my agency, and filed for Social Security benefits. I discovered that retirement was not for me, and I'm interested in rejoining the federal workforce. What are the repercussions?
Stephen Barr: I'm no expert, but here's two quick thoughts:
Check to see if you have to repay the lump-sum buyout that you took. In many cases, you have to fill the full, pre-tax amount if you come back to work for Uncle Sam.
Visit your local Social Security office. If you work and draw Social Security at the same time, you will be subject to the "earnings test," which reduces your Social Security benefit by $1 for every $2 you earn above a threshold of about $13,000.
In many cases, too, you cannot draw a full federal salary and a full CSRS or FERS benefit. There is usually an offset, so check on that, too.
Best of luck!
For Cube Land: It's allergy season. Throat issues are abundant. It's likely he's not comfortable, which is why he's clearing is throat. I would say there's nothing you can do about it. It's one of the problems about being an adult in the workplace.
Stephen Barr: Not sure this is an allergy issue, but it is that time of year.
Washington: I am a federal employee with a special pay rate on the GS scale. If I were to switch agencies, is there a way I can keep my salary from reverting to a "normal" pay? Will agencies give a grade/step increase to compensate?
Stephen Barr: It probably depends on what job you are being hired into. In many cases, special rate pay is based on occupation, so your new agency may offer it. But some do not apply to the Office of Personnel Management for the special pay waiver, and I guess you'll just have to talk it out with your employer. And remember, you probably have the last say on what salary you'll be willing to take. Best of luck!
Anonymous: Re: Political activism -- I know that as a federal worker I cannot actively support candidates or work campaigns, but can you provide a refresher? For instance, I want in on the next gas-utility price inflation rally! Would that be allowed?
Stephen Barr: As long as you are off-duty, not in a government uniform, etc., it is probably okay to participate in such a rally. There are two big things to remember: do not urge people to vote for a candidate and do not solicit campaign contributions for a candidate. Now, if a political candidate shows up at this rally, I think I might disappear at that point, just to avoid getting tripped up by the Hatch Act.
But don't take my advice -- your agency has an ethics officer, and that person can help you steer clear of politics.
Washington: Do you have any idea why the Defense Department application process is so burdensome? Particularly for the corps of engineers, where they require letters of reference and certified copies of transcripts, just to apply? Do they think they get better people?
Stephen Barr: Almost all agencies these days ask for college transcripts, references, etc., as they make a hiring decision. It is unfortunate that so many agencies ask for so much information up front, rather than later in the hiring process, but that's the way it is. Since Sept. 11, there has been an increased emphasis on background checks of federal employees, and this kind of information helps speed that process along.
Anonymous: I am joining the federal government as a career-conditional employee. Just curious about how this works. I understand I will serve a one-year probationary period during which I may be fired for poor performance. What changes after one year? I also understand my career-conditional status will convert to career status after three years. On a practical level, what will change?
Stephen Barr: The one-year probationary period is essentially the last step in the hiring process. During this time, you would have far fewer appeal rights if the agency were to try to remove you for performance or conduct reasons.
At the end of the three-year period, when you would achieve career status, you would gain certain additional rights. For example, you would have reinstatement eligibility if you were separated during a reduction in force, or layoff, and you would be eligible to be considered for certain jobs without taking an additional competitive examination.
But basically you probably would not see any difference on a day-to-day basis unless the conversion included a bump up in salary. Have fun!
Mount Rainier, Md. -- on TSP Redux: Mr. Barr, I have to take issue with both the initial TSP poster and your answer. I'm a mid-30s career fed, and I contribute a mere $20 per pay check to my TSP account. I have done the same for all five years working as a fed. I also have an IRA established out of inheritance, but it has taken the same kind of market hit recently others have.
Why do I contribute so little to my TSP? It's not financial illiteracy, nor "bad" HR personnel -- rather, I have a D.C. area mortgage to pay (and before that, Seattle area rent), health insurance for me and my kids to buy, food to purchase, cars to insure and, oh yes, there's the matter of not-inconsequential child support. I suspect that if you looked past TSP contribution rates to the overall financial condition of many federal workers, you'd find that they don't contribute more to TSP accounts because they feel they have other more important things to do with their money -- like eat, or pay back student loans.
Stephen Barr: You cut to the heart of the issue for many people -- not enough money left over at the end of the month that can be diverted into long-term savings.
But you are putting in $20 per pay period, or more than $500 a year. So that is being matched, and that makes you better off than not even trying.
Clearly, the housing costs in the D.C. area make it difficult for many young people. I fear that many feel they are being squeezed out of government careers because they can make more faster in the private sector (although the benefits may not be as generous). And, as you note, student loans take their toll, too.
I hope your agency is one that would consider offering you a student loan reimbursement, assuming that would help your situation. Best!
For Bismarck: I left my agency with a buyout and then rejoined. I did have to repay my "separation incentive" on pre-tax basis, but the good news is that you can deduct the full pre-tax amount as a loss. So, it comes pretty close to a wash.
Stephen Barr: Thanks. Good point.
Washington: I would go ask the fellow if he could quietly clear his throat. If he couldn't do this, he probably has a physical obstruction in his throat that should be checked by a doctor. Alternatively, this is probably a tic. If the poster thinks this throat-clearing is bad, he or she might want to read a Dear Prudence letter in slate.com from a few months ago about a guy who snorted loudly in his nose, and which drove one of his neighbors nuts (the neighbor called this "snonking"). In her reply, Prudence called this a tic, and that the fellow doing it probably had no control over it. And neither does the throat-clearer in this post.
washingtonpost.com: Prudence on the Snonker (Slate)
Stephen Barr: Thank you. Interesting times we live in.
Throwing peanuts: Given the little information without knowing how long this has been going on ... if this started in the past few weeks, then it likely is springtime allergies, where his throat-clearing is because of nasal drip. I know because I have severe allergies and asthma, and have to deal with people who assume things that are not true. My gut is telling me you have never talked with him to find out what was wrong and what the reason was for the noise.
Stephen Barr: Ah, the human condition.
Washington: "In many cases, too, you cannot draw a full federal salary and a full CSRS or FERS benefit. There is usually an offset, so check on that, too." We had a few retire last year come back this year as contractors. They still are pulling their CSRS/FERS retirement -- as they aren't government employees -- and their pay is higher because they aren't getting benefits (as they are covered as fed retirees).
Stephen Barr: Yes, that happens, and could be called a loophole, I guess.
Olney, Md.: What a lot of people don't understand is that TSP contributions are made before paying taxes -- which lowers your income tax burden. (The same is true for FSA and Dependent Child Care.) Additionally, we receive a cost of living increase each year. I tell people to increase their TSP by 1 percent each year -- they never will miss the money because it was not in their paycheck before. Many people I talk to do not under the TSP, FSA or Dependent Child Care. Many do not understand basic finances. You must pay yourself first, because later in life no one else is going to do it for you!
Stephen Barr: Good advice! The tax break adds up over time, and people often don't think about that.
Bethesda, Md.: Mount Rainier has a point, but studies have shown that many (even most) workers who do not participate in retirement plans are not making a conscious choice -- they are just going with the default (which is nonparticipation) rather than opting in. It's inertia. Many more would participate if the default were participation, with a voluntary opt-out (so that people like Mount Rainier could elect not to save -- not that all those expenses are going to be any less burdensome when it comes time to retire and you've passed up on years of compounding interest).
Stephen Barr: That's the point of view being advocated at the TSP. Inertia is one of the most powerful forces around!
New job hires: The first year you have very limited rights where the employer can fire you very easily. After the first year it isn't that easy to fire someone -- they need legit reasons. After three years you gain permanent status, where if you leave the federal government, you can return later in your career and retain your status as well as be eligible for more jobs. On job listings they say for "current or former fed employees"; the former employees are those who worked for three years. Regardless of how many years you have worked in the federal government, whenever you change jobs there is in essence a one-year (or possibly longer) probationary period with your new job.
Stephen Barr: Thanks much!
Arlington, Va.: Can you give me a quick, back-of-the-envelope estimate of the proportion of one's retirement that is based on the FERS pension (I didn't even know there was one) and the TSP? I'm decades away, contribute 100 percent of my eligibility, but I always had thought I was going to be stuck with whatever I'd managed to save. Thanks.
Stephen Barr: Let me try it this way: FERS is a three-part system, including Social Security, the TSP and a defined benefit FERS pension.
The Social Security portion is calculated in the same way as private sector benefits are set. You should get an annual estimate of your projected benefits from Social Security sometime before each birthday.
The TSP benefit depends on how much you save, for how long and how well you do on your investment returns. There are several options for withdrawing your savings, including taking them as an annuity. The TSP Web site has a calculator so that you can estimate your account value and how they would translate into income.
The FERS pension is 1 percent of your "high three" salary for each year of service, up to age 62. After age 62, if you continue to work, the benefit is 1.1 percent of salary per year, so long as you have at least 20 years of service.
So if you retire today at a $60,000 salary with 20 years of service, it would be 1.1 percent times $60,000 times 20. That is a back of the envelope method. As always, see your personnel officer.
For Cube Land:: Walk over to the coworker, tell him you're going to go get a coffee (or a tea) and you want to know if you can get him something, because it sounds like his throat is bothering him. Be nice.
Stephen Barr: Excellent. Being nice pays off.
For transcripts: All you really need is a student copy of your transcripts. They could ask for an official one, but usually it could wait until job offer is made. Also, with the federal government, once you submit an official transcript it should be part of your federal record, so you do not need to resubmit them again.
Stephen Barr: This is an area I'm not familiar with. Heck, I'm not sure I even can find my framed diploma...
Arlington, Va.: To the cube-dweller with the throat-clearing neighbor: Have you thought about discreetly asking HR or management to move you to a different cube? Perhaps you could explain the problem and the steps you have taken to minimize the distraction and state that you understand he may have a medical condition that makes him unable to prevent this from happening, but that you really need to move for productivity reasons?
Stephen Barr: A possible approach. Thank you.
Fairfax, Va.: Regarding the higher copayments for chronic conditions, why are copayments for prescription drugs not counted toward the out-of-pocket limit on many federal health plans?
Stephen Barr: I assume your question relates to the April 29 column. As I understand it, some health plans have switched their cost-sharing for certain specialized drugs from co-pays to co-insurance. Co-pays are a flat rate (you pay $8 for a generic) while co-insurance means you pick up a percentage of the drug's cost (say, 25 percent for a $500 pill). The fairness issue was raised when people realized that some plans did not have a cap, or ceiling, on how much you could incur in out-of-pocket costs for prescription drugs.
This is an issue to watch out for this fall, during the next open season. It's also another reason to consider opening a flexible spending account, which will take your pre-tax contributions and let you apply toward drug costs.
Alexandria, Va.: Regarding TSP contributions -- I think that even for the most recent poster, we are talking about financial ignorance. TSP contributions lower your taxable income -- you are better off by contributing a little bit more. And what about increasing your percentage just a bit at the start of each year? If you time it right, you'll never notice the hit in your take-home pay -- it still will increase, and so will your retirement earnings. Also, by only contributing $20 each pay cycle, some of the matching dollars are being left on the table. At least contribute enough to maximize your matching. By the way, I am a lower-level GS employee who took a $35,000 pay cut when I joined the federal government, I have kids and a mortgage -- and I am increasing my TSP with each increase in pay.
Stephen Barr: Thanks for that testimonial!
(But I'm dismayed to learn that you took such a big pay cut to join Uncle Sam. Here's hoping for the best!)
Re: Cube Land -- you're not alone!: I have the same problem with a co-worker, and I know it's not allergies because this is been going on since he joined last September. Luckily, he only sometimes works in my area -- but when he's here, its like torture. I think I'll try the "can I get you something" suggestion next time.
Stephen Barr: Go for it! And please write back with your test results. Meanwhile, I'll try to find Miss Manners and see if she has any advice.
Arlington, Va. (again): Thanks for the quick tutorial in retirement. So some of my retirement is assumed to be Social Security! Holy cow! Like I even believe it will be around or even halfway healthy after the boomers have sucked it dry? Seriously, if a means-testing is enacted, my grade 15 salary probably will mean I get less Social Security (if any), the FERS pension is teeny (taxable, right?), and I really had better ramp up saving on my own if I don't want to be eating cat food in subsidized housing!
Stephen Barr: I hear Little Friskies is pretty yummy. But I'm more than confident you'll have a sweet retirement.
Once again, we've run out of time today. Thanks for the comments and questions. We'll see you back here at noon next week!
Editor's Note: washingtonpost.com moderators retain editorial control over Discussions and choose the most relevant questions for guests and hosts; guests and hosts can decline to answer questions. washingtonpost.com is not responsible for any content posted by third parties.