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A report on a bill (S-666) now ready for Senate voting touts the measure as a step toward streamlining agencies by targeting redundant programs as the GAO has recommended for many years.

The “Identifying and Eliminating Wasteful Programs Act,” would require the CIO of each agency – under guidance to be issued by the OMB – to compile a list of “unnecessary, defunct, or duplicative programs; programs that could be performed more effectively by a different agency; and programs that could operate more effectively if consolidated with other programs,” says the report from the Homeland Security and Governmental Affairs Committee, which approved it.

The agency would have to include that list in its annual budget justification to Congress along with proposed legislative language to eliminate or consolidate them.

The report says the bill “presents a pathway for realizing these cost saving opportunities by assisting Congress, the Government Accountability Office, and other transparency and accountability actors, in the identification of unnecessary, defunct, or duplicative federal programs . . . Once these programs have been identified, Congress can craft legislation to rescind statutory authorization for these programs and realize any accompanying cost savings.”

It says the bill would build on “previous efforts to inventory federal programs to provide greater transparency and track costs and performance” including the Government Performance and Results Act Modernization Act, which requires agencies compile and present to Congress lists of duplicative or outdated reports they are required by law to submit.

Citation: FEDweek

Published: July 7, 2023

Planning for retirement with a federal pension is different from planning for retirement without one.

As you surely know, one of the most valuable benefits of federal employment is the prospect of a guaranteed stream of income in retirement. That is, a pension (annuity). At the same time, you might suspect that your pension alone will not be adequate to fund the retirement lifestyle that you desire. And so, you also regularly invest through your TSP account. But how much is enough?

Likely you have heard of the 4% rule. While the word “rule” is a bit of an overstatement, the general idea is that when an imminent retiree observes their nest egg, there is an amount that they can withdraw each year and, assuming common investment return assumptions, not run out of money before they die. That amount is 4% (adjusted for inflation).

This rule of thumb is based on 1994 research by Bill Bengen. While it has been poked and prodded over the years — at various times, commentators have suggested 3%, others 5% in some circumstances — there really hasn’t been a substantial deviation from the original figure.

Although not always obviously so, this “rule” underpins many popular online retirement calculators that illustrate how much you need to save each year during your working career to fund a comfortable retirement. The most simplistic “plug and play” calculators assume that your retirement will be funded by a combination of Social Security and your accumulated savings. For federal retirees, this poses something of a (good) problem. With a pension in the mix, surely it should be the case that you can save less in your TSP than the 4% rule assumes. How do you put a number on that?

In fact, we can employ the handy “4% rule” to back-of-the-envelope our way to a result. If your projected annuity is $40,000 a year, the “rule” tells you that you need to save $1,000,000 to achieve the same result. ($1,000,000 x 4% = $40,000) So you might then say, “Well, as I do have an annuity, I can plan to save $1 million less in my TSP than recommended by the simple calculators.” (Or you may be more conservative, and reduce your goal by, say, $750,000.)

That’s not a bad approach, but it does feel a bit…simplistic. A serious downfall of that method — and the 4% rule in general — is that it treats all your retirement spending as being equally important.

At some point, you may have completed an exercise to determine how much you will likely spend in retirement. Or you may have settled on the other common retirement assumption that your expenses in retirement will be 80% of what you spent while working. But if your analysis stops there, I’m afraid that you have only done half the work. And this brings us back to how planning for retirement with a federal pension is different from planning without.  Click HERE to read more