5/11/2020 - Employee Benefits Newsletter
As the end of May wraps up, we have yet another newsletter for federal employees. This week carries some interesting news, including many ups and downs related to the COVID-19 global pandemic. As we see positive trends in the Thrift Savings Plan (TSP) and negative trends for the FERS Special Retirement Supplement, it’s clear that things will still be a bit of a rollercoaster while the virus continues to be a major issue across the country and globe.
Of course, COVID-19 doesn’t dominate all of the news. In the articles below, you’ll find some changes that the IRS is making to the tax filing process, and some details about the continued controversy behind the FRTIB’s I Fund. For continual news regarding the financial well-being of federal employees, be sure to keep checking back on our blog!
TSP BOUNCES BACK FOR FEDERAL WORKERS
The Thrift Savings Plan (TSP) is trending in a positive direction, signaling that the economy may be in its first steps of turning around from the COVID-19 global pandemic. As people return to work, the FERS participation rate is up to 93%, and the active-duty participation rate for the Uniformed Services personnel has increased to 71%. These factors, along with several others, indicate that the TSP is providing a positive return for investors in May.
COVID-19 IMPACT ON 2021 COLA, PAY RAISE AND WEP/GPO
Source: Federal News Network
This article and podcast dives into several interesting topics, all related to the COVID-19 pandemic and how it’s affecting the 2021 COLA, federal pay raises, and the WEP/GPO. Unfortunately, it’s not all sunshine and rainbows. It’s expected that many retirees won’t be getting a 2021 COLA, and a raise is looking unlikely for federal employees. Considerations may be made for emergency workers and first responders, but with the economic downturn and widespread pay cuts, a widespread pay increase is a long shot. Be sure to check out the article, and listen to the accompanying podcast for more information.
FERS SPECIAL RETIREMENT SUPPLEMENT MAY BE REDUCED DUE TO EXCESS 2019 EARNINGS
Source: My Federal Retirement
Are you a worker covered by the Federal Employees Retirement System (FERS)? You’ll want to read this article. Under FERS, the earliest you can receive your Social Security benefits is at age 62. However, many federal employees retire before that, and for them, the FERS Special Retirement Supplement is an option — this allows FERS employees to receive annuities before official retirement age. Unfortunately, supplements this year may be reduced based on your 2019 earnings. For an in-depth overview of the situation, be sure to read the article in full.
OPM CLARIFIES LEAVE POLICY, PENTAGON OUTLINES ELECTIVE SURGERY PLANS, AND MORE
Source: Government Executive
The Families First Coronavirus Response Act is a new paid leave measure enacted for federal employees. There has been some confusion on the nature of the pay under this program, and the Office of Personnel Management (OPM) has issued some clarifications about the differences between basic and non-basic pay. Additionally, as part of this week’s news, the Pentagon has announced that elective surgeries will be resuming, after being put on hold for two months due to the virus.
CONNOLLY ACCUSES LABOR DEPARTMENT OF OVERSTEPPING ITS AUTHORITY ON TSP’S FUND
The controversy surrounding the Federal Retirement Thrift Investment Board (FRTIB) continues. The board’s I Fund has been preparing for a change in their index that would include Chinese companies. While the change was meant to happen this year, it has become the subject of political warring, as Trump and related parties push to have the decision overturned. This article details a letter from Congressman Gerry Connolly, condemning the labor department of overstepping its authority on the TSP.
IRS OFFERING ELECTRONIC OPTION FOR FILING AMENDED TAX RETURNS THIS SUMMER
Source: My Federal Retirement
You don’t have to be a federal employee for this one to be relevant — everyone pays taxes, after all, and we personally welcome any change to the system that makes it easier. This summer, the IRS will be implementing a new change that allows taxpayers to file amended tax returns electronically. Currently, the only option is to mail a completed Form 1040-X to the IRS for processing. Ideally, this new change will allow the agency to receive amended returns faster, and minimize errors.