Monthly Archives: September 2018

New Bill Focuses on TSA Employees

tsa

The program that allows airports to use private security screeners may soon get an overhaul. Legislation has been introduced that would reform the Transportation Security Administrations’ Screening Partnership Program. Sen. Mike Lee (R-UT) introduced the Screening Partnership Reform Act (S. 3441) to enhance the accuracy of the TSA’s cost estimation process behind the screening partnership program.

In a recent article, Lee said that airports who choose to work a private security contractor can reduce costs up to 11% without compromising passenger safety. Even so, only 22 airports around the country have opted into the program, largely he says because of “bureaucratic red tape that comes with the TSA being judge, jury, and executioner in all aspects of contractor selection.”

He said his bill will simplify the application process for private companies to utilize the screening partnership program by looking more accurately at the costs involved with how the TSA evaluates prospective security contractors.

One of the costs not currently taken into consideration by the TSA is the cost of providing benefits to the federal employees who do the work—the screeners.

“As it stands, the TSA does not currently include the cost of benefits guaranteed to federal employees, which could account for as much as 10% of the total amount the TSA pays its employees for these services. This bill would change that,” Lee wrote in his article.

He also says this legislation would improve the security process by allowing private screening companies to annually submit recommendations on how to improve the screening process and it would also empower airports to make the decision whether to go with a TSA contract or a TSA-approved private screening company.

“While the screening partnership program has existed for almost 20 years, only 22 airports participate in the program, despite its safety record and cost-effectiveness,” Lee said. “This bill would clear some of the bureaucratic red tape surrounding this program to unleash the protentional cost-saving benefits of these private screening contractors, while also simplifying the application process and improving the efficiency of our screenings. Simply put, this bill would save Americans money and make them safer.”

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Health Care Premiums to Increase Slightly

care

The Office of Personnel Management announced that federal employees will only see a 1.5% increase in their health insurance premiums for 2019, the lowest increase in more than 20 years.

Those enrolled in FEHB with coverage only for themselves will pay an average of $1.53 more each bi-weekly pay period. Those on full family plans will pay $2.55 more each pay period, and those in self-plus-one plans will pay an additional $3.06.

The average increase for the government’s contribution to FEHBP premiums in 2019 will be 1.2%. OPM contributes roughly 72% toward premiums based on a weighted average of the plans that enrollees choose. This makes the overall increase in premiums, including both the employee and government contributions, 1.3% next year. That marks the slowest growth in health care costs since 1996 and the smallest increase in the enrollees’ share since 1995, Alan Spielman, director of health care and insurance at OPM, said.

“We still encourage enrollees to shop around for coverage and evaluate alternatives,” Spielman said. “Even if you are only seeing a modest increase [in your current plan premiums] or a decrease, you might be able to find a better value if you evaluate your needs and the choices available.”

He says there are several factors that could be driving down price increases. “There are a number of dynamics at play here,” he said. “Certainly, OPM and all of the carriers have been focused on quality improvement and achieving more affordable programs here…and there are a number of trends along those lines. They also include things like renegotiating provider contracts and introducing programs like pharmacy management and chronic care management.”

Next year, there is a moratorium on the Affordable Care Act’s health insurance provider fees. Exact changes to premiums will vary based on plans enrollees choose and some will even decrease. For example, for the Blue Cross and Blue Shield Standard Option—the most popular plan—self only enrollees will pay $0.93 less per pay period; enrollees in family coverage will pay $3.74 less per pay period, and self-plus-one enrollees will pay $1.27 less each pay period.

For the Federal Employee Dental and Vision Insurance Program—where there is no government contribution—dental plan premiums will increase 1.2% on average in 2019, while vision plans will drop in price by 2.8%.

This is also the first year that uniformed service retirees and their families can enroll in FEDVIP plans and the first year that active duty service members can enroll in vision plans.

Open Season for selecting or changing plans in FEHB run from November 12-December 10.

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New TSP Investment Option?

investmentThere is almost $600 billion just sitting in the Thrift Savings plan waiting for federal employees to use it when they retire.

TSP and Congress

Congress has a track record of spending money from any available source, so it’s understandable to think of the possibility of them tapping into this money.

TSP funds are currently invested in a way that is typically immune from political interference. The TSP board has done a good job of keeping the TSP plan invested in low-cost index funds. As structured, the plan has resulted in the TSP being recognized and cited by national publications as an excellent retirement plan. However, this doesn’t mean TSP funds will remain immune from politics in the future.

The latest bill to “improve” TSP has been introduced by Jeff Merkley (D-OR). It’s the latest in a series of proposals to meet the social or political objectives of the legislation’s sponsor by using funds from the TSP.

The Merkley Bill

Sen. Merkley is concerned about climate change, so he named his bill The Retirement Investments for a Sustainable Economy (RISE) Act. According to his press release, “As climate chaos ramps up, all Americans deserve the option to divest from the fossil fuel industry. 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 purpose of this legislation is to give TSP investors a new investment option with a fund that doesn’t invest in the fossil fuel industry. The RISE Act would require the Government Accountability Office to check out the risk for investors from their TSP investments in fossil fuel companies. The RISE Act also directs GAO to provide a divestment tool for the TSP should the report show risk to investors from fossil fuel holdings.

In his press release, the Senator says that roughly translates as “everyone is divesting pension funds from fossil fuel companies.” Instead, they are putting their pension money “in a more sustainable, socially responsible investment portfolio.”

Outlook

There isn’t a great chance of this bill getting passed into law. However, keeping up with changes to the TSP introduced in Congress is a good idea for TSP investors who want their investments to remain secure and deliver the best possible rate or return with minimum risk.

To read more about this, click here.

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What is Discontinued Service Retirement?

discontinued

Discontinued Service Retirement (DSR) is the only type of federal retirement that isn’t voluntary. You become eligible for DSR if you are separated against your will for reasons other than “misconduct or delinquency” and you meet the age and service requirements, which are:

  • 50 years of age and 20 years of service
  • Any age and 25 years of service

*In both these cases, at least 5 of the years of service must be creditable civilian service.

The Office of Personnel Management makes the final determination as to whether the separation is involuntary. The following actions are generally considered to be involuntary:

  • Reduction-in-Force (RIF)
  • Lack of funds
  • Abolishment of position
  • Expiration of incumbent’s term of office
  • Unacceptable performance (unless due to misconduct)
  • Transfer of function outside of commuting area
  • Reassignment outside of the commuting area where no mobility agreement exists
  • Failure to continue to meet qualification requirements of the position (provided separation is non-disciplinary and action is initiated by the agency)
  • Separation during probation because of failure to qualify due to performance (not misconduct)
  • Separation of a National Guard technician because of loss of military membership or the rank required to hold the National Guard position
  • Removal from Sr. Executive Service for less than fully successful performance (under Title 5, U.S.C., Ch. 43, Subchapter II)

There is a distinct differentiation between separation due to unacceptable performance and separation due to misconduct. If you “can’t do”, you are more likely to be eligible for DSR than if you “won’t do”.

Even if your separation meets the above criteria, you won’t be able to be eligible for DSR if you decline a reasonable offer of a position. An offer is considered reasonable if it’s in the same agency, same commuting area, same tenure group and within 2 grades of your previous position.

DSR, like early retirement, provides for a 2% per year (1/6 of 1% per month) reduction in your pension for each year you are under age 55 if you are CSRS. A FERS DSR retiree (who isn’t a special category employee) will face no age-based reduction in pension but will not be eligible for cost-of-living adjustments until age 62.

For you to be eligible to retire under DSR provisions for either unacceptable performance or disability or illness, you must have received a decision of removal by your agency.

If you would like to discuss your options, please call us at 877-226-2723 or fill out this INQUIRY form. The consultation is always FREE.

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Lifecycle TSP Funds Changing

lifecycleThe Thrift Savings Plan program will increase the proportion of some investments in certain stocks with the hopes of growing the amount of money annuitants receive after they retire. Agency officials of the Federal Retirement Thrift Investment Board outlined a 15-year strategy to increase the proportion of equities in the Lifecycle (L) funds, which shift toward more stable investments as participants get closer to retirement.

Currently, TSP Lifecycle funds begin at 90% stocks, and the percentage of stocks decreases as the participant approaches their target retirement date. It drops to 50% when the participant reaches age 60, settling at 20% at age 62.

This new investment plan, known as a glide path, will be the next L fund to open—L 2060—and will begin with 99% of contributions invested in equities. When the average participant reaches age 35, the investments will begin to shift toward securities. At age 58, the fund will be 60% stocks and will move to 30% equities at age 63.

“This proposal will improve outcomes for L fund participants while not unreasonably increasing risk levels,” TSP Chief Investment Officer Sean McCaffrey said. “[The 15-year] transition plan minimizes the disruption for participants.”

Exiting accounts will maintain their current equity-to-securities ratio until they cross paths with the new glide path, at which point they will shift towards securities investment at the new rate. Further, the L funds will increase the proportion of stock holdings that come from international equities from 30% to 35%.

Russ Ivinjack, sr. partner at Aon Hewitt, who consulted with the TSP on L fund asset allocations, said that because the TSP is part of a “3-legged stool”, it can afford to take more risk.

“Having a defined benefit, we see that as a bond or a cash-like allocation,” he said. “This allows you to take more risk. Additionally, there is a great degree of income predictability, whereas if you look at industries that are highly cyclical or where the pay varies highly, you want to be more conservative.”

This new glide path will bring the TSP closer to the investment practices of other retirement programs but still remain more conservative than its private sector counterparts.

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Accommodation and Reassignment

accommodationAmong the other requirements for Federal Disability Retirement eligibility, one is your agency must certify it is unable to accommodate your disabling condition in your present position and it has considered you for any vacant position in the same agency, at the same grade/pay level, within the same commuting area, for which you are qualified for reassignment.

That is a loaded explanation, so for the sake of this post, we are just going to focus on the accommodation and reassignment parts.

So, what do these terms mean and how can they affect your federal disability retirement application?

Accommodation

Accommodation is an adjustment made to your job and/or work environment that enables you to still perform the essential elements of your job. Reasonable accommodation applies to both your current position and to any vacant position to which you may be reassigned. These accommodations can include:

  • Modifying work site
  • Adjusting work schedule (if it’s still to the terms in your job description)
  • Restructuring your job (if the essential job functions stay the same)
  • Acquiring or modifying equipment or devices

Your agency must exhaust all reasonable efforts to help accommodate you before you consider federal disability retirement. If your agency is successful in accommodation, you should not apply for FDR. Further, if you’ve already sent your application to OPM, you/your agency must notify OPM immediately.

Accommodation can still be tricky. Here are a few “accommodations” that OPM does not accept (for FDR purposes):

  • Using up sick/annual leave to supplement a full-time schedule
  • Taking away job duties
  • Part-time work schedules, especially if your job description states you’re in a full-time position

Reassignment

Like accommodation, federal agencies must make every effort to retain an employee through reassignment. When you begin the process of FDR, your agency must review all vacant positions in the same grade/pay level, within the same commuting area to determine if you meet the minimum qualifications for a vacant position. The position must be a real one, not one your agency “made up”. You are deemed qualified for reassignment when you meet the minimum qualifications for a vacant position.

Refusal of Reassignment

If your agency locates one or more vacant, available positions at the same grade/pay level and within the same commuting area for which you are qualified for reassignment, and you refuse that assignment, OPM will not approve your application. Further, accepting a position at a lower pay/grade will have the same outcome at OPM.

However, you may decline an offer to a position at a lower pay/grade level, a position of lesser tenure or a position in another agency or commuting are without it affecting your eligibility for FDR.

Harris Federal Law Firm assists federal employees with their federal disability retirement applications. If you think you may qualify, don’t hesitate to call us 877-226-2723 or fill out this INQUIRY form. The consultation is always FREE.

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Claims Processing at OPM

claimsIt’s no surprise that the Office of Personnel Management has a large backlog of retirement claims, including both regular retirement and disability retirement applications. When you submit your retirement application, you want to be 100% sure it’s complete and timely; this is especially important for disability retirement applications because there are deadlines to be aware of.

Receiving

When OPM receives your application, they will send you a letter with information about your claim and you’ll get your Civil Service Annuity (CSA) number. Your case will be assigned to a Legal Administrative Specialist (LAS), who makes the determination based on what you’ve submitted and if that meets the eligibility requirements:

  • You have 18 months creditable civilian FERS service.
  • While employed in a FERS position, you became disabled due to disease or injury for useful and efficient service in your current position.
  • Your condition is expected to last at least one year.
  • Your agency must certify its unable to accommodate your condition in your present position and its considered you for any vacant position in the same agency, at the same grade and pay level, within the same commuting area, for which you are qualified for reassignment.
  • You must apply before you are separated from your agency, or within one year thereafter.
  • You must apply for Social Security benefits.

Approval

Both you and your employing agency will be notified and at this point, your agency will separate you (if you are still working).

The Payment Processing Department at OPM will calculate your benefit and make any deductions for insurance and/or survivor benefits and Social Security (if applicable).

Denial

Again, you and your employing agency will be notified in the case of a denial. Remember that you do have appeal rights. If your application is denied at the initial level, you have 30 days to appeal OPM’s decision. This is called the Reconsideration stage. If you choose to appeal, a different LAS will be assigned to your case, and you’ll have the opportunity to submit supplemental evidence to strengthen your claim. OPM follows the same process if you are approved at this stage (as if you were approved initially).

If you get denied a second time, you again have 30 days to appeal. This time you appeal to the Merit Systems Protection Board. This is a more formal process and OPM will assign an Administrative Judge to oversee the case. There will also be an attorney assigned to defend OPM’s decision.

It’s important to know you have appeal rights in the case of a denial at the initial level. To avoid this though, be sure you are submitting a complete and thorough application the first time.

Harris Federal Law Firm has secured over 2,000 approvals for our clients. We know this system very well and we represent you at all 3 levels (if needed). If you need help with your case, don’t hesitate to call us at 877-226-2723 or fill out this INQUIRY form. Our consultation is always FREE. Remember, you have filing deadlines!

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