What Will Happen to Your TSP If You Are Furloughed?

• By Kellie Lunney
• February 21, 2013
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With possible federal sequestration furloughs just around the corner, Thrift Savings Plan enrollees may want to start thinking now about how a smaller paycheck could affect their retirement accounts.

It’s looking more likely that Congress and the White House are going to let sequestration happen. The automatic, across-the-board budget cuts are scheduled to begin taking effect on March 1 -- eight days from now. Several agencies already have said they will need to furlough employees to achieve the total $85 billion in spending cuts the government needs to produce for the rest of fiscal 2013. The Defense Department on Wednesday officially told Congress it will have to furlough most of its 800,000 civilian workers under sequestration. In a memo to employees, outgoing Secretary Leon Panetta said affected workers would receive 30 days’ notice before any furloughs occur, and the department would do what it could to shield benefits.

So, how does this affect TSP accounts?

Employees can opt to contribute a specific dollar amount, or a percentage based upon their pay, to their 401(k)-style retirement accounts. Those who use the percentage method will see a smaller contribution if they are furloughed. For example, if employees contribute 5 ...

Federal Pay Groundhog Day

• By Kellie Lunney
• February 14, 2013
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Federal pay again is dominating the news, as the Obama administration and House Republicans yet again offer contrasting proposals on government salaries.

President Obama is proposing a 1 percent pay increase for federal civilian employees in fiscal 2014, which we reported Friday evening. The White House announced the decision to recommend the pay bump in Obama's upcoming fiscal 2014 budget blueprint during a phone call with federal employee labor leaders. But, as some readers pointed out, feds are still waiting for the 0.5 percent pay boost this year. The president has said federal workers will receive the 2013 increase after March 27, when the current continuing resolution keeping the government open expires. That is, of course, if Congress doesn’t block it. And things don’t look so promising on that front at the moment….

Because there’s another piece of legislation (H.R. 237) pending in the House that would prevent federal employees from receiving that across-the-board pay raise this spring. The House Rules Committee on Wednesday afternoon was considering several amendments to the bill, sponsored by Rep. Ron DeSantis, R-Fla., and the full House planned to vote Friday on the legislation. It’s likely the measure ...

Family and Medical Leave Gets an Upgrade

• By Kellie Lunney
• February 7, 2013
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This column often includes news about proposals to curtail federal pay and benefits. This week, however, the government’s announcement of important new benefits to military families and veterans under the 1993 Family and Medical Leave Act marks a departure from the usual fare.

The families of eligible vets now will have the same FMLA benefits afforded to active-duty caregivers under the law’s expansion. The final rule, announced during a Tuesday ceremony marking the 20th anniversary of the law, also applies to service members’ pre-existing injuries or illnesses aggravated during active duty, and increases the amount of time in the “qualifying exigency” category that a family member can take off for a service member’s “rest and recuperation” from five to 15 days.

The rule, which implements changes mandated by the fiscal 2010 National Defense Authorization Act, also clarifies FMLA benefits and eligibility for airline personnel and flight crews.

The Family and Medical Leave Act provides workers with 12 weeks of unpaid leave for situations like the birth or adoption of a child; a seriously ill child, spouse or parent; or an employee’s own serious health condition. The fiscal 2008 National Defense Authorization Act allowed eligible family members ...

TRICARE Drug Co-Pay Hike on Horizon

• By Kellie Lunney
• January 31, 2013
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Some TRICARE beneficiaries will pay higher co-pays for prescription drugs beginning Feb. 1

Those affected will pay anywhere from $4 to $19 more for brand name and nonformulary medications that are not filled at military clinics or hospitals. The fiscal 2013 Defense Authorization Act mandated the increases, but it could have been worse. Congress decided to reject the Obama administration’s proposal that would have doubled and tripled what beneficiaries spend on pharmacy drug co-payments.

The co-payments for generic drugs filled at the pharmacy remains $5. There is no co-pay when generic prescriptions are obtained through home delivery, or mail-order.

The law also caps pharmacy co-pays beginning in 2014 so that such fees are in line with the annual retiree cost-of-living adjustment. The costs associated with the modest fee increases would be offset by a five-year pilot program requiring TRICARE for Life recipients to obtain maintenance drug refills through the mail, which is cheaper than obtaining them through retail pharmacies.

Here’s the breakdown:

• $13: The amount affected beneficiaries will pay for a three-month supply of brand-name drugs obtained through home delivery, up from $9.
• $17: The co-pay for a month-supply of brand-name drugs purchased at a retail pharmacy, up ...

Pay Looms Large in Budget Debate

• By Kellie Lunney
• January 24, 2013
• comments

There’s been a lot of talk about pay freezes in the last week. The debt ceiling suspension bill the House approved on Wednesday withholds lawmakers’ pay if they don’t pass a fiscal 2014 budget resolution by April 15. Legislation that would extend the pay freeze for federal employees was introduced, briefly put on the House floor schedule, and then postponed. And then there’s the looming trio of threats that could affect the pay of federal employees: a debt default, sequestration, and the possibility of a government shutdown if Congress allows the current continuing resolution to expire.

Let’s recap how federal pay could fare under each possible scenario facing government employees this winter and spring:

• Debt Default: Congress is poised to temporarily suspend the current debt ceiling of $16.4 trillion, allowing the government to pay its obligations through May 18 and avoid a default for the next few months. The Senate likely will approve the House-passed measure, sending it to President Obama who won’t oppose the bill (though is not enthused about it). Obama said on Jan. 14 that federal paychecks were at risk if the debt ceiling was not raised and the government defaulted ...