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Key developments in the world of federal employee benefits: health, pay, and much more.
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Aid for Furloughed Feds, Blended Retirement Opt-In Window Closes, and More

A bipartisan group of lawmakers introduced a bill Tuesday to allow federal workers at shuttered agencies to temporarily tap into their 401(k)-style retirement accounts to help cope with missed paychecks during the partial government shutdown.

The Financial Relief for Feds Act (H.R. 545), introduced by Reps. Pete Olson, R-Texas; Don Beyer, D-Va.; Ed Perlmutter, D-Colo.; Randy Weber, R-Texas; David McKinley, R-W.Va.; David Trone, D-Md.; Kendra Horn, D-Okla.; Colin Allred, D-Texas; and Anthony Brown, D-Md., would allow federal workers who have been furloughed or who are excepted and working without pay to make withdrawals from their Thrift Savings Plan accounts without the taxes and penalties—roughly 10 percent—that usually are withheld.

The bill also would allow contractors whose sole income comes from federal contracts that have been suspended because of a shutdown to similarly withdraw funds without penalty from their own retirement investment accounts like IRAs. And it allows those who make withdrawals to pay the money back into their accounts once the government reopens.

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Although TSP rules allow federal employees furloughed as part of a shutdown to take out loans...

Back Pay for Some Contractors, TSP Loosens Loan Rules and More

More than a dozen House Democrats sponsored a bill Tuesday that would guarantee back pay for some federal contractors following the end of the partial government shutdown.

Introduced by Del. Eleanor Holmes Norton, D-D.C., the 2019 Low-Wage Federal Contractor Employee Back Pay Act (H.R. 339) would compensate contractors who provide retail, food, custodial and security services at federal agencies shuttered during the partial government shutdown. The bill, which was also introduced, but not acted upon, in December, specifies that the “government shall provide compensation,” not the workers’ employers.

Although Congress typically provides back pay to furloughed federal employees after the government reopens, the same cannot be said for contractors. Joining Norton in sponsoring the bill were Reps. Don Beyer, D-Va.; Suzanne Bonamici, D-Wash.; Gerry Connolly, D-Va.; Ro Khanna, D-Calif.; Grace Meng, D-N.Y.; Gwen Moore, D-Wis.; Mark Pocan, D-Wis.; Ayanna Pressley, D-Mass.; Jamie Raskin, D-Md.; Lori Trahan, D-Mass.; David Trone, D-Md.; and Jennifer Wexton, D-Va.

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“Low-wage federal contract workers can least afford to be penalized by President Trump’s shutdown,” Norton said in a statement. “Unlike federal employees, who have always been made...

Frozen Locality Pay, a Possible Pay Raise for Political Appointees and More

Although federal employees in several regions were slated to receive a pay increase to subsidize living in more expensive areas this year, that will have to wait. The pause comes as a result of President Trump’s executive order last week freezing the pay of civilian federal workers.

Last month, the Office of Personnel Management finalized a rule establishing a number of new locality pay areas starting with the first full pay period of 2019, which begins Jan. 5. Locality pay areas provide federal workers with an additional raise to compensate for living in regions with higher than average wages and usually a higher cost of living.

But being added to the list of locality pay areas does not automatically boost feds’ pay. Instead, it applies a percentage increase to employees’ pay on top of any annual base pay adjustment, provided that Congress or the president authorizes pay raises.

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Although extra locality pay will not kick in for areas like Birmingham, Ala.; Burlington, Vt.; San Antonio, Texas; and Virginia Beach, Va., immediately, all hope is not lost. Congress is working to override the president’s...

A Guide to Pay and Benefits During A Shutdown

As of Wednesday, lawmakers and the White House had just two days to approve a spending measure to avert a partial government shutdown beginning Friday night.

Without appropriations legislation or a continuing resolution, roughly one third of federal agencies would be forced to limit their activities or shut down entirely beginning Dec. 22. Although Senate Majority Leader Mitch McConnell on Wednesday introduced legislation to push that deadline back to Feb. 8, there is no guarantee President Trump will agree to sign it into law.

Among the entities facing budgetary uncertainty are the departments of Transportation, Housing and Urban Development, State, Interior, Agriculture, Treasury, Commerce, Homeland Security and Justice, along with a number of independent agencies. Here’s what federal workers at those departments can expect in the realm of pay and benefits if the government closes, based on guidance from the Office of Personnel Management from the October 2013 shutdown.

Salaries: Agencies are required to pay employees deemed essential or exempt from the shutdown, although that money won’t arrive until after the government reopens. Furloughed employees have no guarantee that they will be compensated at the end of the shutdown, although Congress traditionally has issued back pay. Sen. Ben...

Retirement Overpayments, TSP Hardship Withdrawals and More

A government watchdog agency warned last month that although incidents of improper payments from a federal retirees’ defined benefit program remain low, the risk that the Office of Personnel Management could overpay some retirees is “high.”

In its annual report on management challenges facing the agency, the OPM Office of the Inspector General said that OPM needs to shore up reporting requirements and oversight of the Civil Service Retirement System and the Federal Employees Retirement System.

The overall rate of improper payments from CSRS and FERS in fiscal 2017 was 0.38 percent, far below many other federal programs. But that amounted to $313.8 million, of which $238.7 million were overpayments. Underpayments totaled $75.1 million, or 0.09 percent of transactions.

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The inspector general said that although OPM is committed to further curbing improper payments, it lacks the capability to do so at this time.

“OPM’s Retirement Services office is aware of the major contributing factors to these improper payments; however, it is unable to provide the level of granularity needed to fulfill [Office of Management and Budget] reporting requirements,” the...