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Key developments in the world of federal employee benefits: health, pay, and much more.

Presidential Contenders on Federal Benefits, Military Members on Proposed Retirement Reforms, and More

Joe Belanger /

This week several 2016 presidential contenders have officially launched their campaigns, and they have vastly different views of the federal workforce and the federal government’s role in solving major challenges facing the country. The bottom line: Democratic contender Hillary Clinton is the most fed-friendly.

Clinton made clear her respect for the civil servants she oversaw as secretary of State in her book, Hard Choices. In fact, she dedicated the book to diplomats and development workers. She has also advocated for insourcing more jobs to federal employees; paid parental leave; and expanding benefits to lesbian, gay, bisexual and transgender employees. 

Contrast that to Republican hopefuls Rand Paul and Marco Rubio. Paul has vowed to “take power away from unelected bureaucrats who are trampling our freedom and rights,” and has proposed eliminating entire Cabinet-level departments: Education, Commerce, Energy, and Housing and Urban Development. Agencies that escaped his ax would still be vulnerable to hefty budget decreases, which could in turn erode employee pay and benefits.

Rubio has said government will hold citizens back, rather than empowering them, and has supported efforts to shrink the federal workforce and make it easier to fire senior executives. Rubio has also suggested opening the Thrift Savings Plan to all Americans without employer-sponsored retirement programs, a plan TSP officials say would divert their attention from core participants.  

Speaking of the TSP, retirement plan officials sent a notice to participants that first quarter 2015 statements are available, covering January through March. Last month was not great for many of the retirement plan’s funds, but some still had a positive performance over the first quarter. The I Fund, invested in international stocks, and the S Fund, invested in small and midsize companies, have performed the best since January, with the I Fund earning 5.7 percent and the S Fund, 5.39 percent. All of the funds are in the black for the first three months of 2015. Click here to see the returns.

Service members and their families may have spent the past few months chewing on proposed changes to their retirement benefits recommended by the Military Compensation and Retirement Modernization Commission in late January. It might seem that they would oppose the recommended changes, which involve scrapping the current 20-year cliff vesting system in favor of providing some defined benefits to all service members regardless of their tenure. The proposal calls for a blended retirement plan, composed of a defined benefit and greater participation in the TSP.

But, military members actually support the recommendations, a new survey finds, so long as they are grandfathered into the old system. Sixty-nine percent of middle class military families surveyed in the latest First Command Financial Behaviors Index said they backed the proposed retirement changes, and just 10 percent said they opposed them. Still, 61 percent of those who expected to serve long enough for full retirement said they would want to remain under the current system.

“They are relatively open minded about retirement reform in general, but they are understandably wary about giving up a significant financial benefit that has been a key part of our nation’s lifetime commitment to generations of men and women in uniform,” said Scott Spiker, CEO of First Command Financial Services Inc., in a statement. The behavior index is based on a monthly survey of 530 U.S. consumers age 25-70 with annual household incomes of at least $50,000.

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