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

Changes to the TSP, the Latest on a Pay Raise, and More

The agency that administers the federal government’s 401(k)-style retirement savings program issued a rule Wednesday that would remove what officials call “duplicative” regulations on how court-ordered payments are taxed.

According to a document in the Federal Register, the Federal Retirement Thrift Investment Board, which administers the Thrift Savings Plan, will remove language outlining the federal income tax withholding rates for court order payments, like alimony and child support, from participants’ accounts, in 30 days, unless there are significant comments opposed to the change.

In explaining the change, the agency said that tax withholding rates already are regulated by the tax code, and that it would be better for the TSP to inform participants about the rates through other means.

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“The federal income tax withholding rates on all TSP payments are dictated by the Internal Revenue Code,” the filing stated. “As such, any FRTIB regulatory language that expresses the withholding rates are, at best, duplicative of the Internal Revenue Code. The federal income tax withholding rates required by the Internal Revenue Code are more appropriately communicated to participants and beneficiaries via the TSP...

A Fossil-Free TSP, Wellness at Federal Agencies and More

The federal government’s 401(k)-style retirement savings program could offer participants a fund devoid of fossil fuel investments, if one lawmaker has his way.

Sen. Jeff Merkley, D-Ore., introduced the Retirement Investments for a Sustainable Economy Act (S.3424) last week. The legislation would require the Thrift Savings Plan to offer a fund that is not linked to fossil fuel companies.

Merkley said in a statement that the measure would allow federal employees to ensure they are invested in “socially responsible” industries and corporations.

“As climate chaos ramps up, all Americans deserve the option to divest from the fossil fuel industry,” he said. “For the first time, this bill will give millions of federal employees the power to ensure their retirement funds are invested in a more sustainable, socially responsible investment portfolio.”

The bill also would require the Government Accountability Office to issue an annual report “examining the risk” of investing in fossil fuel corporations, provided that governments issue policies to keep average global temperature increases at 2 degrees Celcius.

TSP spokeswoman Kim Weaver said this week that the agency is “still reviewing” the legislation and does not yet have an official position.

Meanwhile, the Office of Personnel...

A Pay Freeze in Doubt, and Back Pay for Fired VA Employees

As Congress last week prepared to negotiate whether to provide federal civilian employees with a 1.9 percent pay increase next year, President Trump introduced additional uncertainty to the conversation.

Just one day after following up on his fiscal 2019 budget plan with a formal proposal to freeze federal workers’ pay, the president suggested he would “study” the issue.

“I’m going to be studying, you know, the federal workers in Washington that you’ve been reading so much about,” Trump said at a ceremony marking the signing of an executive order on retirement savings. “People don’t want to give them any increase. They haven’t had one in a long time. I said, 'I’m going to study that over the weekend.' It’s a good time to study it—Labor Day. Let’s see how they do next week. But a lot of people were against it.”

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The “lot of people” who have been against a pay raise are primarily employees of the White House and the Office of Management and Budget. And Trump last Saturday retweeted Corey Stewart, the conservative Republican...

OPM Concedes Defeat on Retirement Cuts, and CFPB Encourages Credit Monitoring for Military

Office of Personnel Management Director Jeff Pon appears to believe that a controversial proposal to cut federal employees’ retirement benefits stands little chance of becoming law, according to news reports.

According to Federal Times, Pon said a proposal he sent to House Speaker Paul Ryan earlier this year to significantly cut several federal retirement programs was “highly unlikely to happen.” The director spoke at the annual conference of the National Active and Retired Federal Employees Association in Florida on Monday.

In May, Pon sent a letter to Ryan proposing legislation to make a number of cuts to federal employee retirement programs. Initially proposed last year as part of President Trump’s fiscal 2018 budget, the plan included eliminating Federal Employees’ Retirement System supplements for federal workers who retire before Social Security kicks in at age 62; changing the basis of a retiree’s defined benefit annuity payments from their highest three years of salary to their highest five years; and increasing the amount feds contribute to FERS by 1 percentage point per year until their share matches the government’s contribution.

Pon had also suggested eliminating cost-of-living adjustments for FERS retirees—both current and future—and reducing Civil Service Retirement...

Guaranteed Paid Sick Leave for Contractors, and Changes to the Annual Charitable Giving Drive

Three federal agencies on Wednesday published a rule finalizing implementation of an Obama-era executive order requiring federal contractors to provide employees with seven or more days of paid sick leave, including leave for family care.

The rule has been in effect on an interim basis since December 2016. In 2015, President Obama issued an executive order requiring the paid leave for contractors, which was projected at the time to affect around 300,000 full- and part-time workers. Under the rule, an employee would earn one hour of sick leave for every 30 hours worked, up to seven days per year.

According to the agencies’ filing with the Federal Register, since the proposed rule was first published in September 2016, six of the seven comments from the public were supportive of the requirement. The other comment sought clarification on how it would impact a specific scenario.

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Meanwhile the Office of Personnel Management last week announced the federal government’s annual charity fundraising drive, which is set to begin next month.

In a memo to agency heads, OPM Director Jeff Pon said the 2018 Combined Federal Campaign...