Benefits Housekeeping 101 For Federal Employees and Retirees

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We are halfway through the year. Has anything in your life significantly changed such as getting married, having a baby or perhaps moving to a new house or apartment?  If any of these life events happen during the year you need to update your federal personnel forms and beneficiaries.  The federal government has a form for every occasion. Sometimes we get so involved in the moment that we neglect to take care of the housekeeping of our federal paperwork.  Here are some suggestions.

  1. Contact your human resource department and ask how to update your employee profile.Your agency may retain their employees’ profiles in a database as part of the human resource payroll and benefits.  Perhaps, you can access that database and make any necessary changes to your address, telephone number, marital status along with an emergency contact.
  2. As an active federal employee, you should fill out a form SF1152 Designation of Beneficiaries. This form relates to unpaid wages in the event that you pass away as an active employee.  You need to designate your spouse, a family member or other person who will receive your last paycheck or other outstanding payments owed to you such as a travel reimbursement.
  3. If you get married or have a baby, you need to fill out the Federal Health Benefits form SF 2809, the Tables of Permissible Changes in Enrollment. In these situations, there is no need to wait for the Health Benefits Open Season, because these are qualifying events.
  4. If you carry the Federal Employees Group Life Insurance (FEGLI), you should update your SF2823 Designation of Beneficiary. If you are divorced, you may not want your life insurance going to your ex-spouse.  This is a common oversight for federal employees.
  5. With respect to your Thrift Savings Plan (TSP), you should update your TSP-3, Thrift Savings Plan Designation of Beneficiary. The Thrift Saving Plan website allows you to change your beneficiaries online and also allows you to select primary and contingent beneficiaries.
  6. What should you do if you are a federal retiree. The Office of Personnel Management (OPM) has a specific website for federal retirees.  You need to register and have your information updated on the OPM Retirement Services website www.servicesonline.opm.gov

Make a check list and review each one of these items.  Remember proper planning prevents poor performance!

Citation: FEDweek, Abraham Grungold, AG Financial Services

 

SECURE 2.0 Implementation: Roth Catch-up Rule Pushed Back

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Here’s more news about the implementation of SECURE 2.0. In a recent article, we discussed a provision of the Act that, beginning in 2024, would have required highly compensated employees to make any catch-up contributions as Roth contributions. This provision will not affect too many TSP account holders for two reasons: 1) Catch-up contributions can only be made by those participants who are 50 or older (including those who turn 50 during the year); and 2) This law’s definition of highly compensated employees covers those who make more than $145,000 a year.

Apparently, retirement plan custodians and record-keepers raised a stink about the implementation date of January 1, 2024, claiming that it would have been difficult, if not impossible, to be able to implement the requirement as called for in the Act.

Their pleas did not fall on deaf ears. On Friday, August 25th, the Internal Revenue Service (IRS) issued IRS Notice 2023-62, which pushed off the implementation date to January 1, 2026. Thus, no employees (highly compensated or otherwise) will be required to make their catch-up contributions as Roth contributions. Of course, any employee will still be able to make Roth catch-up contributions if their plan has a Roth component (as does the TSP).

The IRS referred to this as an “administrative transition period” and promised to issue further guidance clarifying the provisions of SECURE 2.0. I can hardly wait.

In other news, Fidelity Investments announced that the number of retirement plan millionaires is on the rise again now that market performance has improved. The data they shared was from plans and IRAs managed by Fidelity. They said the volume of millionaires has increased 25% so far this year, though the total number of millionaires is still less than it was at the end of 2021.

Overall, in the accounts managed by Fidelity only 1.6% of 401(k) accounts and 2.5% of IRAs have balances of $1,000,000 or more.

Citation: FEDweek- Published: September 5, 2023

From Shutdown Prospects To Anti-Telework Bills: 5 Things To Watch When Congress Returns

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Pending legislation could affect federal employees’ work-life balance, civil service protections, TSP investment options and more.

The Senate returns from recess on Tuesday and the House the following week. Lawmakers will be racing the clock to tackle big issues, such as finalizing agency spending bills. Here are five areas to watch as Congress returns, that could have big implications for federal employees’ paychecks, benefits and job security.

  1. Shutdown prospects. One of the top items on lawmakers’ agenda when they return will be funding the government for next fiscal year, which begins Oct. 1. Senate Majority Leader Chuck Schumer, D-N.Y., and House Speaker Kevin McCarthy, R-Calif., have said they’ve agreed to work on a short-term continuing resolution to keep the lights on while negotiations on longer-term spending are completed. House Freedom Caucus members have threatened not to support the CR unless it meets a list of demands on conservative policy issues, but McCarthy plans to use the need to fund investigations of Hunter Biden as leverage to avoid a shutdown.

The Fiscal Responsibility Act, signed into law in June as part of a deal to avoid a debt default, has a provision intended to discourage a shutdown. Under the law, Congress has until Jan. 1, 2024 to pass all 12 annual appropriations bills or a process would be triggered that could result in cuts to all agency budgets of 1% below this year’s levels.

  1. Anti-telework bills. The White House earlier in August called on agencies to “aggressively” reduce telework this fall, but Republicans aren’t taking any changes. The Stopping Home Office Work’s Unproductive Problems Act (H.R. 139 and S. 1565) would require agencies to “reinstate and apply the telework policies, practices and levels . . . in effect on December 31, 2019” within 30 days of the bill’s enactment. If agencies want to expand telework beyond 2019 levels, they would have to submit an Office of Personnel Management-certified plan to Congress first.

The House narrowly passed the bill–dubbed the SHOW UP Act–in February, but the Senate version has not made it out of committee. House lawmakers are also attacking telework through appropriations legislation, attaching a rider to their version of the Financial Services and General Government spending bill that would direct agencies to return their telework policies to pre-pandemic levels within 30 days of the bill’s enactment, similar to the SHOW UP Act.  Click HERE to read more.