Predicted Federal Retirement Spike Hasn’t Materialized, But a Pay Raise Has

A weekly roundup of pay and benefits news.

The big news this week is Office of Management and Budget Director Mick Mulvaney’s budget guidance to federal agencies, which ends the hiring freeze that began Jan. 23 but requires departments to come up with plans to reduce spending and shrink the federal workforce.

Mulvaney confirmed that President Trump’s fiscal 2018 budget request will include an across-the-board 1.9 percent pay raise for federal employees, though the budget director didn’t specify what portion of the increase would be included in base pay, and what would go toward locality adjustments.

As Eric Katz reported, “the increase would be slightly less than the 2.1 percent raise feds received in 2017, though it would eclipse the 1.6 percent pay bump President Obama initially proposed for this year.” Obama increased the rate only to match a Congressionally-mandated raise for military service members. The raise isn’t official though—Trump still must take additional steps before it can be implemented.

National Active and Retired Federal Employees Association president Dick Thissen applauded the raise, but said it’s insufficient under the circumstances: “Following years of below-market raises and frozen pay, both Congress and the President should pursue a more robust increase to maintain a highly qualified workforce, especially if the Administration is genuine in its pledge to reward high performers and run an efficient federal government.”

For those who predicted President Trump’s election would trigger a wave of retirements, the data don’t support that, at least not yet. Statistics released last week by the Office of Personnel Management show that last month, 7,216 federal workers filed retirement applications with OPM, a decrease from the 9,114 claims filed in February. Both of those numbers are roughly in line with the number of claims by this point in 2016, when 5,741 employees filed for retirement in March, down from 11,293 claims the month before.

OPM processed 10,602 claims last month, compared with 9,222 in March 2016. But the percentage of claims processed within 60 days since the beginning of the fiscal year has seen a steep drop: 61 percent as of March, compared to 82 percent at the same time last year.

An OPM spokesperson confirmed that the staff that handles retirement applications were subject to President Trump’s temporary federal hiring freeze, but said the agency “cannot determine” whether the policy has had any effect on OPM’s ability to process claims.

Navy personnel can now manage their life insurance policies online, thanks to a new program managed by the Veterans Affairs Department with support from Defense. It’s the first step in a phased roll-out of the new Servicemembers’ Group Life Insurance Online Enrollment System, developed by the VA in conjunction with the Defense Department. It can be accessed through the Defense Manpower Data Center’s milConnect Web application. Officials hope the new system will be available to members of all branches of the military by the end of the year.

“Now, the Navy, and soon all of our nation’s service members, will be able to manage their coverage and beneficiaries online—just like their private-sector counterparts” said Thomas Murphy, the VA’s acting undersecretary for benefits in a statement. “Moving to an online, self-service system brings the SGLI program in line with current insurance industry best practices.”

Meanwhile, civilian employees can count on using the same tools to handle their dental and vision insurance programs and other federal benefits. OPM has renewed the contract with LTC Partners to continue operation of the BENEFEDS system, which allows workers to manage their coverage, as well as FSAFEDS, the federal government’s flexible spending account program.

"We are honored that OPM has elected to continue our partnership," said LTC Partners CEO Paul Forte in a statement. "Operating successfully within the federal benefits environment requires responsive, secure, and compliant service and adherence to complex regulations and demanding service requirements. Our being chosen for another contract reflects our track record of outstanding performance across all areas of BENEFEDS administration, from enrollment and premium administration to the customer service experience."