Retirement Planning Retirement PlanningRetirement Planning
Advice on how to prepare for life after government.

Looking Ahead

Building on last week's roundup of benefits changes for 2008, let's look at some other developments likely to unfold this year.

Part-Time Pressures

It appears that part-time inequity for Civil Service Retirement System employees will continue. (For the background on this, see my previous columns, Part-Time Rules, Part One and Part-Time Rules, Part Two.) Whatever happened to H.R. 2780, which would have addressed this issue? For the time being, it still makes sense for employees covered by CSRS to be sure they work full-time during their last three years of federal service.

Electronic Retirement The Office of Personnel Management's retirement systems modernization will celebrate a milestone in 2008 by handling the first wave of retirees under a new system based on electronic record-keeping and claims processing. The implementation of the RSM program began in July 2006 and will continue through 2010. Employees of the General Services Administration and OPM itself are in the first wave, and are scheduled to migrate to the new system starting next month.

Long Term Care

The initial seven-year contract between OPM and Long Term Care Partners to provide insurance under this program is set to expire at the end of 2008. Long Term Care Partners' parent companies -- John Hancock and MetLife -- have submitted a proposal to OPM to continue the program. That could bring changes -- and maybe a second open season? In the meantime, visit for more information on the program.

Law Enforcement Retirement

Later this year, Customs and Border Patrol Officers will be provided retirement benefits under special provisions for law enforcement officers and firefighters. This will mean retirement at any age after 25 years serving in a "covered" position or at age 50 with 20 years in such a position. Currently, these employees must work until the Federal Employees Retirement System minimum retirement age of 55-57 with a minimum of 30 years of service. In addition, retirees' first 20 years of law enforcement service will be computed at 0.7% higher per year. That adds up to a 14 percent higher FERS retirement benefit than under the old formula.

The tricky issue is that there will be no change to pension calculations or contributions for federal service before July 2008, resulting in a hybrid system for current employees. CBP officers hired after July will have law enforcement officer status immediately. OPM should be issuing more detailed information on this change in the near future.

Retired Public Safety Officers

Most federal employees lose their insurance tax breaks after retirement. This includes flexible spending accounts as well as the benefit of using pre-tax dollars to pay health insurance premiums. But the Pension Protection Act of 2006 included a provision that provides pre-tax treatment of health benefits and long-term care insurance premiums for retired public safety officers.

OPM has determined that CSRS and FERS are eligible retirement plans under the law, meaning that retired public safety officers whose annuity payments include a direct premium payment to a health insurance carrier or long-term care insurance carrier may identify themselves to the IRS as eligible for the tax benefit. For more information, see IRS Publication 721.

TSP Statements by Mail

Beginning in February, whether you usually receive your quarterly Thrift Savings Plan statements in the mail or via the TSP Web site, the TSP will send you an annual participant statement. The statement provides valuable information about your investments as of the end of the previous year as well as the personal information the TSP has on file for you -- including a list of your beneficiaries, if you have designated any. It also contains your account number, which you must use when accessing the secure sections of the Web site and the ThriftLine or completing most TSP forms.

Hopefully it will turn out to be an interesting and productive year for all. I am an eternal optimist, but I also go by the saying, "Expect the best, but prepare for the worst." There may be some ups and downs as we work through 2008, but so far, the news seems nonthreatening.

Tammy Flanagan is the senior benefits director for the National Institute of Transition Planning Inc., which conducts federal retirement planning workshops and seminars. She has spent 25 years helping federal employees take charge of their retirement by understanding their benefits.


Tammy Flanagan has spent 30 years helping federal employees take charge of their retirement by understanding their benefits. She runs her own consulting business at and provides individual counseling as well as online training for the National Active and Retired Federal Employees Association, Plan Your Federal Retirement as well as the Federal Long Term Care insurance Program. She also serves as the senior benefits director for the National Institute of Transition Planning Inc., which conducts federal retirement planning workshops and seminars.

For more retirement planning help, tune in to "For Your Benefit," presented by the National Institute of Transition Planning Inc. live on Federal News Radio on Mondays at 10 a.m. ET on WFED AM 1500 in the Washington-metro area. Archived shows are available on

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