Schedule F reinstated despite OPM rule, will be settled in court. Also – telework update for unionized employees and more information on “fork in the road” memo.
Schedule F Status, Telework Updates, and More Details About “Fork in the Road” Memo
In the federal landscape, there is a lot of confusion amongst employees at the moment. Until the judicial branch makes some important decisions, it is unclear how much the White House is going to get away with. This article will examine what is known at the moment about Schedule F, telework agreements in collective bargaining agreements, and the “fork in the road” memo about deferred resignation.
Executive Order Rolling Back Protections Against Schedule F
After the election, it was presumed that the incoming President would look to reinstate Schedule F which makes it easier to fire federal workers. OPM, under Biden’s guidance, put safeguards in place with a regulatory rule to prevent any type of rescheduling of the civil service workforce. There were questions to about how Trump would deal with the newly implemented rule and on the first day of his second presidential term, we got our answers.
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AFGE and AFSCME Sue White House Over Schedule F Executive Order
The President signed an executive order on January 20 that seeks to roll back the OPM rule, bypassing the process in place to erase rules from federal code. The order also retitled “Schedule F” to “Schedule Policy/Career,” but has an identical function. In response, the American Federation of Government Employees (AFGE) and the American Federation of State, County, and and Municipal Employees (AFSCME) have filed lawsuit against the policy, questioning its legality. Along with the White House, the complaint accuses OPM of not following the Administrative Procedure Act in implementing the president’s order.
White House Doubles Down on Return to Work Mandate, Tells Agencies to Disregard Telework Agreements
Along with the Schedule F order, another controversial action signed on the President’s first day in office sought to end remote work across all federal agencies. Unionized employees with telework agreements in their collective bargaining agreement (CBA) are by law exempted from the return to office order as the executive branch does not have the authority to adjust approved contracts. Nonetheless, the President recently instructed agency leaders to ignore such remote work stipulations in CBAs, claiming to do so is a “management right,” which has flimsy legal standing. However, federal employees are required to exhaust all administrative avenues before seeking a decision from the US federal court system, possibly delaying any such grievances.
Updated “Fork in the Road” Agreement for Deferred Resignation
Federal workers received more detailed information about the buyout offer Trump made to agency employees last week. The updated agreement answers questions about annual leave accumulation, pay and benefits, and confirms an election to retire before September 30 will override any resignation. Check out this article about deferred and postponed retirement options following buyout offer. Of note, the deferred resignation agreement includes permanently waiving all rights to sue their employing agency for any matter arising from either their employment or the deferred resignation offer in general.
How Many Federal Employees Have Accepted the Buyout?
As of the morning of February 5, it is estimated that 1% of the workforce has accepted the offer, about 20,000 people. This is below the 5 -10% the White House had anticipated to resign, which would’ve been 100,000 to 200,000 federal employees. With the deadline hitting tomorrow, we will see if this number increases.
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FERS Retirement Calculator: Estimate Your Federal Employee Pension Annuity
By utilizing the FERS Retirement Calculator, you can make informed decisions about your retirement strategy and maximize your benefits.
U.S. Federal Employee Benefits: FERS Calculation Tool
The FERS Pension Calculator is an essential tool for federal employees looking to estimate their federal retirement benefits. It is used to calculate the gross annual pension amount that you can expect to receive based on your years of service, salary, and other factors. This calculator is designed to simplify the complex process of determining your FERS pension, allowing you to plan effectively for your future. To have financial confidence upon retirement, tools like our calculators can help immensely, but meeting with one of the financial planners at PlanWell or even just attending a free federal retirement workshop, can be even more beneficial.
How to Use the FERS Retirement Annuity Calculator
Using the FERS Retirement Calculator is a straightforward process. To begin, you will need to gather essential information such as your current salary, years of service, and expected retirement date. Once you have this data, you can input it into the calculator, which will then compute your estimated pension benefits. The calculator uses a specific formula to determine your FERS annuity, taking into account factors like your high-3 salary and years of creditable service. By following these steps, you can quickly and easily calculate your potential retirement benefits. Additionally, you should know your minimum retirement age (MRA) and any applicable age and service requirements to ensure you are eligible. Other factors, such as unused sick leave and military time, can also impact your calculation. By ensuring you have all the necessary information, you can obtain a precise estimate of your retirement benefits.
How Does the Calculator Estimate Your Pension?
PlanWell’s FERS Retirement Calculator estimates your pension by using a specific formula that considers your high-3 salary, years of service, and other relevant factors. The calculation involves multiplying your high-3 salary by a percentage based on your years of service, known as the multiplier (either 1 or 1.1 percent). This percentage increases with additional years of service, allowing you to maximize your retirement benefits. The calculator also considers any applicable reductions for early retirement or other factors, providing you with an accurate estimate of your FERS annuity. OPM can provide a retirement summary that will compile the needed information that increases the already easy-to-use calculator’s ease of use.
How to Calculate Your FERS Pension Benefits
Calculating your FERS pension benefits involves understanding the specific formula used to determine your annuity. This formula takes into account your high-3 salary, years of service, and other factors to provide an accurate estimate of your retirement benefits. The FERS pension calculation formula is the computation determining your retirement benefits. It involves multiplying your high-3 salary by a percentage based on your years of service. For most federal employees, this percentage is 1% for each year of service, or 1.1% if you retire at age 62 with at least 20 years of service. This formula provides a straightforward method for calculating your FERS annuity, allowing you to estimate your retirement benefits accurately.
How Does Your Average Salary Affect Your Annual Pension?
Typically the last 36 months of civilian service, the “high three” plays a significant role in determining your FERS pension benefits. This figure represents the average of your highest three consecutive years of earnings and is used as the basis for calculating your annuity. A higher high-3 salary results in a larger pension, making it essential to maximize your earnings during your career. By understanding how your high-3 salary impacts your retirement benefits, you can make strategic decisions to enhance your financial future. Click here to learn how your High-3 is determined.
Federal Benefits 101: What Are the Key Components of the Federal Employee Retirement System?
The Federal Employee Retirement System (FERS) is composed of several key components that work together to provide comprehensive retirement benefits. Understanding these elements, and how they interact with both the TSP and Social Security, is essential for federal employees looking to maximize their retirement benefits and plan effectively for their future. By familiarizing yourself with the various aspects of FERS, you can make informed decisions about your retirement strategy.
Understanding the Minimum Retirement Age (MRA) and Thrift Savings Plan (TSP)
The Minimum Retirement Age (MRA) is a critical factor in determining your eligibility for FERS retirement benefits. This age varies based on your birth year and ranges from 55 to 57. Financial planning for feds requires an understanding of the MRA and how many years of federal service are needed to be entitled to an immediate retirement. Our FERS retirement calculator is designed with this in mind, giving you an accurate estimate
The Thrift Savings Plan (TSP) is an integral part of the Federal Employee Retirement System, providing a valuable savings and investment option for federal employees. The TSP allows you to contribute a portion of your salary to a retirement savings account, with the federal government matching a percentage of your contributions. This plan offers a range of investment options, allowing you to tailor your retirement savings strategy to your individual needs. By participating in the TSP, you can enhance your overall retirement benefits and ensure a secure financial future.
What Are the Survivor Benefits Options?
Survivor benefits are an important consideration for federal employees planning their retirement. These benefits provide financial support to your spouse or other designated beneficiaries in the event of your death. The FERS system offers several survivor benefit options, allowing you to choose the level of coverage that best meets your needs. The cost of choosing a 50% survivor’s benefit is your retiree benefit gets reduced by 10%. Electing no survivorship will result in an unreduced annuity, but the surviving spouse will not be able to keep an FEHB benefit plan after they are widowed.
What Are the Benefits of Including Military Time in Your Calculation?
Types of pay can influence one’s pension. Including military service in your FERS pension calculation can significantly enhance your retirement benefits. Military service can be credited towards your total years of service, increasing the percentage used in the pension calculation formula. This can result in a larger annuity and a more secure financial future. By understanding the process for purchasing military time and its impact on your retirement benefits, you can make informed decisions about your retirement strategy and maximize your FERS pension.
What Are Common Mistakes to Avoid When Planning for FERS Retirement?
Planning for FERS retirement involves navigating a complex system with many potential pitfalls, such as one of the following:
Miscalculating your retirement date can have significant implications for your FERS benefits. To avoid this mistake, it’s essential to understand the age and service requirements for an immediate retirement benefit and plan accordingly. Consider factors such as your Minimum Retirement Age (MRA) and any applicable reductions for early retirement. By carefully planning your retirement date, you can ensure you meet the necessary requirements and maximize your pension benefits. You might need to work even when you are eligible for an immediate retirement to attain that 1.1% multiplier (10% boost to FERS annuity) to reach an income amount you would be happy with for a full month. This is where having a planner that specializes in federal benefits can be a gamechanger.
Ignoring sick leave in your FERS pension calculation can result in a lower annuity than you are entitled to. Unused sick leave can be credited towards your total years of service (but not for eligibility) increasing the percentage used in the pension calculation formula.
How Can a Financial Advisor Assist in Retirement Planning?
A financial advisor can be an invaluable resource in planning your retirement and maximizing your FERS benefits. Advisors have the expertise to help you navigate the complexities of the Federal Employee Retirement System and develop a comprehensive retirement strategy. They can provide personalized advice on investment options, tax implications, and other financial considerations, ensuring you make informed decisions about your retirement plan. By working with a financial advisor, you can enhance your retirement benefits and achieve your financial goals.
Cost of Living Adjustments (COLA)
Lastly, don’t forget both FERS and CSRS pensions receive a COLA if there’s inflation (based off CPI index) that goes into effect on January 1. The 2025 COLA for Social Security and CSRS was 2.5% and for FERS, was 2.0%.
Reach Out to Us!
If you have additional federal benefit questions, contact our team of CERTIFIED FINANCIAL PLANNER™ (CFP®) and Chartered Federal Employee Benefits Consultants (ChFEBC℠). At PlanWell, we are federal employee financial advisors with a focus on retirement planning. Learn more about our process designed for the career fed.
Preparing for federal retirement? Check out our scheduled federal retirement workshops. Sign up for our no-cost federal retirement webinars here! Make sure to plan ahead and reserve your seat for our FERS webinar, held every three weeks. Want to have PlanWell host a federal retirement seminar for your agency? Reach out, and we’ll collaborate with HR to arrange an on-site FERS seminar.
Want to fast-track your federal retirement plan? Skip the FERS webinar and start a one-on-one conversation with a ChFEBC today. You can schedule a one-on-one meeting here.
