DoD Identifies 23,000 Employees with Pension Errors

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The Department of Defense recently began notifying more than 23,000 employees that they have been receiving either an overpayment or underpayment of their salary due to calculation errors in their pension contributions.

All of the affected employees are under the Federal Employees Retirement System (FERS). More than 8,400 affected employees work for the Army, nearly 6,000 work for the Air Force, and more than 5,600 work for the Navy. Another 2,100 are at the Defense Logistics Agency, while 825 employees were affected at the Defense Finance and Accounting Service. The rest work for the Washington Headquarters Service or other DoD components.

Employees are being notified by their respective agencies if they are entitled to a reimbursement because of overpayments or if they owe money due to underpayments. The amount of money owed ranges from a couple hundred dollars to more than $10,000.

Employees who have been inadvertently underpaying into their pensions can submit a waiver requesting forgiveness for the amount owed or an extension of time in which to pay back the debt. Instructions for completing the waivers are included in the letters employees are receiving.

The calculation errors resulted from two changes in pension contribution rates for FERS employees that were made by Congress in 2012 and 2014. Due to no fault of employees, DoD agencies assigned some employees to the incorrect FERS retirement plan, resulting in erroneous contribution rates.

The Navy first discovered the coding errors last year, which triggered a departmentwide review by the Defense Civilian Personnel Advisory Service. DCPAS identified 23,175 employees across DoD with inaccurate calculations. Click here for the DCPAS PowerPoint presentation.

According to DCPAS, employees who have retired during the period in which the calculation errors were made are not affected because their pensions were adjusted at the time of retirement.

Citation: AFGE June 12, 2023

Explainer-What Is the U.S. Debt Ceiling?

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WASHINGTON (Reuters) – The U.S. is rapidly approaching the deadline for Congress to pass a deal, reached over the weekend by Democratic President Joe Biden and top congressional Republican Kevin McCarthy, to suspend the government’s $31.4 trillion debt ceiling or risk a catastrophic default.

WHEN WAS THE DEBT CEILING REACHED?

Washington regularly sets a limit on federal borrowing. Currently, the ceiling is roughly equal to 120% of the country’s annual economic output. The debt reached that ceiling in January and the Treasury Department has kept obligations just within the limit by suspending investments in some federal pension funds while continuing to borrow from investors.

The Treasury on Friday warned that it could run out of room under the limit as soon as June 5, a few days later than its earlier June 1 forecast.

Because the Treasury borrows close to 20 cents for every dollar it spends, Washington at that point would start missing payments owed to lenders, citizens or both.

IS THE DEBT CEILING GOOD FOR ANYTHING?

Few counties in the world have debt ceiling laws and Washington’s periodic lifting of the borrowing limit merely allows it to pay for spending Congress has already authorized.

Treasury Secretary Janet Yellen and other policy experts have called on Washington to eliminate the limit, because it amounts to a bureaucratic stamp on decisions already made.

 

TSP Millionaire Count Continues Recovery

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The count of TSP millionaires continued to recover in the first three months of this year, although it remains below the level of 12 months before and well below the peak at year-end 2021.

The count stood at just above 88,000 as of March 31, up from just under 77,000 at year-end 2022 (the TSP made some revisions to the previously reported figures for that count), but about 12,000 below the count of 12 months prior and down about 25,000 from the nearly 113,000 high at year-end 2021.

As of the end of March there were about 93,000 investors with accounts between $750,000 and $1 million and about 206,000 with accounts between $500,000 and $750,000. That’s up from about 88,000 and about 198,000 for the three months but still below the 99,000 and 212,000 of 12 months prior.

The largest account balance was just under $7.2 million; the largest balance as of year-end 2022 was just under $6.9 million while the figure for 12 months prior was $8.4 million—presumably, but not necessarily, the same person.

Citation: FEDweek May 30, 2023

Debt Ceiling Measure Would Restrict Agency Funding for 2024-2025, and Possibly Beyond

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The debt ceiling measure that is up for voting in Congress would prevent an unprecedented national default although at the cost of limits on accounts in most federal agencies that fund federal employee salaries and other operating costs.

The impact could be felt as soon as the October 1 start of fiscal 2024, when funding for agencies other than the VA and Defense Department would essentially be capped at current levels, while increases that the White House sought for those two departments would be allowed. For fiscal 2025, total growth of only 1 percent would be allowed for the other agencies.

Afterward there would be a series of targets for limiting spending, although not with the same provisions for enforcement as for fiscal 2024 and 2025. There also would be procedural incentives for Congress to pass individual appropriations bills rather than tie all of them into one large year-end package as has been the pattern in recent years. Under the measure, if individual bills are not passed, new limits affecting both defense and non-defense accounts would kick in.

Such limits on agency “salaries and expenses” accounts often translate into pressure to hold down employment levels and in more serious cases can lead to unpaid furloughs—as occurred after an agreement in a similar debt ceiling showdown in 2011 resulted in funding caps—or even RIFs. The exact impact is unknowable at present, though, and is much less restrictive than a House-passed bill that would have set firm caps of only 1 percent annual growth over 10 years.

“A freeze in spending for federal agencies will lead to serious issues or make matters worse than they already are,” the NFFE union said. “Accounting for inflation, this deal ultimately means federal agencies will see their funding cut over the next two years. Republicans in Congress who are pushing for these cuts need to understand that this deal will only exacerbate issues with operations and staffing, and the American public will suffer the consequences, as will federal employees.”

Other spending restrictions include rescinding authority for some pandemic-related funding previously approved but unspent and cutting nearly $20 billion of the $80 billion in funding over 10 years approved last year for the IRS above baseline levels. However, administration officials said that would not necessarily change the agency’s short-run planning for the additional funding, which include beefing up enforcement and customer service and replacing outdated IT.

Other policy provisions include requiring agencies to find offsetting savings for the cost of certain regulatory actions; increasing the age for work requirements for certain safety net programs such as food stamps but also broadening some exceptions from those requirements; and speeding up the environmental impact process for certain projects.

Citation: FedWeek May 30, 2023

 

 

 

 

A Meaningful Memorial Day

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Memorial Day is about honoring the brave service members who made the ultimate sacrifice while serving our country. Every year, I’m reminded of how deeply grateful I am for their courage and humbled by their dedication to securing our most cherished freedoms.

While we enjoy the long weekend, I invite you to take a moment to honor our fallen heroes and extend our thoughts and support to their families when possible.

Wishing you a meaningful Memorial Day.