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Tuition Discounts for Feds, a Tax Reform Update, and More

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The Office of Personnel Management announced Wednesday that it has reached agreements with four new colleges and universities to provide discounted tuition for federal employees.

Acting OPM Director Kathleen McGettigan announced in a memo to agencies that her office has secured academic agreements with the Catholic University of America’s Metropolitan School of Professional Studies, Pace University’s iPace Program, Park University and Utica College to provide reduced tuition rates or scholarships to federal employees.

The addition of these four schools brings the total number of institutions participating in OPM’s Federal Academic Alliance up to 15. The program is intended to help federal agencies close skills gaps and provide professional development and retention incentives for federal employees.

The agreement provides reduced tuition for federal workers both on campus and for online courses at Catholic University of America, Park University and Utica College. At Pace University only the online curricula are available to feds.

Additionally, the agreement allows feds’ spouses and dependents to attend Park University and Utica College at a discount.

“This Federal Academic Alliance provides federal government employees and their families with access to opportunities to earn a variety of bachelor and master degrees,” McGettigan said in a statement. “We will continue to work with colleges and universities to provide the federal workforce with opportunities to obtain the education they need to meet today’s federal workplace challenges. The alliance will also help agencies close critical skills gaps, enabling the federal workforce to fulfill its mission to serve the American people.”

On Capitol Hill, Senate Finance Committee Chairman Orrin Hatch, R-Utah, released his uploaded summary of the Senate’s version of the Tax Cuts and Jobs Act (H.R. 1) late Tuesday night. The new proposal, among other things, removes a provision from Hatch’s previous bill that would have eliminated the ability for employees making at least $500,000 from making any pretax catch-up contributions to their 401(k), 403(b) or 457(b) retirement savings plans, which include the Thrift Savings Plan.

But it remained unclear on Wednesday whether Hatch plans to formally offer an amendment he filed Monday that would effectively end all excess pretax retirement contributions for employees age 50 and older. That proposal would increase the maximum catch-up contribution those employees can make to their retirement savings plans—including the TSP—from $6,000 to $9,000, but it would require such contributions to be made only to Roth plans, which are taxed prior to investment, rather than when participants withdraw money after they retire and when they typically are taxed at a lower rate.

The Financial Planning Association on Wednesday blasted the possible amendment as a disincentive for people to adequately save for retirement.

"It is disheartening to see the attempt by Sen. Orrin Hatch to eliminate the ability of older Americans to make pretax contributions to defined contribution plans,” the group wrote. “These critical retirement plans make it possible for millions of Americans to save for their eventual transition out of the workforce and into retirement. Eliminating the contributions on a pretax basis for those savers age 50 and older will greatly hinder their ability to save."

Over in the House, a bill introduced last week by Rep. Mark Walker, R-N.C., would allow disabled veterans to participate in the TSP by contributing a portion of their monthly disability compensation. The Financial Independence for Disabled Veterans Act (H.R. 4262) has been referred to the House Oversight and Government Reform Committee.

Although members of the military have been able to contribute to the TSP since 2015, they cannot do so once they leave government. And although the new Blended Retirement System will provide an employer match to military service members who join after Jan. 1 or opt into the program in 2018, that match will not be extended to disabled veterans who are no longer employed by the federal government.

Erich Wagner is a staff correspondent covering pay, benefits and other federal workforce issues. He joined Government Executive in the spring of 2017 after extensive experience writing about state and local issues in Maryland and Virginia, most recently as editor-in-chief of the Alexandria Times. He holds a bachelor's degree in journalism from the University of Maryland.

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