Val dives into two significant pieces of legislation that are poised to reshape the federal workforce: the Federal Employee Return to Work Act and the Federal Employee Locality Accountability in Retirement Act.
First, Val explores the Federal Employee Return to Work Act, which aims to address the evolving landscape of remote work within federal agencies, and then break down the Federal Employee Locality Accountability in Retirement Act. This legislation seeks to ensure that federal employees’ retirement benefits are aligned with their actual work locations during their final years of service.
Whether you’re just starting your federal career or nearing retirement, it’s crucial to understand these new pieces of legislation that could affect you!
Don’t miss this episode if you’re looking to secure your financial future as a federal employee. Make sure to subscribe to The Federal Retirement Show for more episodes and leave us a review!
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8.16.24: Audio automatically transcribed by Sonix
8.16.24: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.
Speaker1:
Welcome back to the federal retirement Show. I'm your host, Val Majewski with American Benefits Exchange. As always, I really appreciate you taking the time out of your busy schedule to join me on the federal retirement show and to learn about information we believe that you need to know when it comes to your benefits and retirement, because this is all about you. So if you've never seen an episode of ours before, this is for you, the federal employee out there looking for some information. Maybe you have questions, maybe you saw the title of this and you're like, ooh, I'm interested in that. Well, we have a ton of other content that you can look at, and this is for you to make sure that you're making the best decisions and you're aware of what's out there when it comes to your benefits and retirement information. And from time to time, like I'm going to do today, it's not necessarily about the information that is basic. This is about new information that's coming out, updates to pay and benefits or things that are being proposed out there when it comes to benefits and retirement. And you may or may not be aware of what's going on. So today I'm going to review just a couple of new bills that have been proposed and things that are being talked about. Nothing has passed yet, so don't want you to be alarmed by the title or alarmed by anything that you hear today.
Speaker1:
These are things that have been proposed. But understand that items like this that we're going to discuss today are proposed all the time. There are always pending pieces of legislation, whether it's during budgeting time or whether it's different. Folks want to make adjustments to pay and benefits or retirement calculations or whatever it might be. There are always these pending or bills out there that have been proposed, and there are going to be voted on. That can have an effect on not only your current pay situation, but also your future retirement benefits. So it's very important for you to be aware of these things and what's going on. So let's dive into today's information. I want to give you a pay and retirement update that you are seeing in the news, and hopefully you can go look up after our session today. And our tagline on there is what you don't know can cost you. And that is true. What you don't know or you're not aware of can cost you. And there's a number of things that we've discussed, ways that you can mitigate costs, ways you can save more money, way ways that you can plan better for retirement. Because if you don't take advantage of all of these things that are out there, it can cost you not just in extra money coming out of your paycheck. It can cost you in lost benefits when it comes to your future retirement income.
Speaker1:
So make sure that you're taking advantage of everything that's available to you, including things that are in the news, updates, new scenarios. So what is going on out there? Uh, as I said, changes are made in the government. People propose these bills, these new pieces of legislation that get voted on. And these changes can be made with or without your say. Most of the time it's done without your say. It should be done with your say. Right? These are your congresspeople, your representatives, your folks that you voted in to take care of you as the federal employee. But sometimes these things are made up or, uh, put in to legislation or different things that are voted on or proposed without your say. Now, how can you get more of a say? Well, there are different unions and associations out there that lobby on your behalf. Hopefully, maybe you're a part of some of these things, and they'll go to the hill and they'll lobby on your behalf against these bills or against certain pieces of legislation that are going to negatively affect you or not be as beneficial in the long run for you, the federal employee. Let's face it, a lot of times when benefits and retirement reform come in, this is just, in my experience, working with federal employees, uh, for the past over a decade now, as we're going on 12 years, uh, a lot of the things that come up are not exactly for your benefit, right? I mean, you talk to anybody who is an old CSRS employee when Firs came out and when Firs came and they were trying to get people to switch, how many CSRS employees are happy that they stayed where they're at in the old system? Csrs and how many CSRS employees that switched to Fers were disappointed in the results? I say this in the nicest way possible, and anything you hear here is my opinion, right? Just in my experience, I'm giving you my opinion.
Speaker1:
But a lot of times when these bills or these new proposals come out, they're not necessarily for the benefit of you. Right? It's not necessarily in your best interest for some of these, these things. Sometimes they are. But I'd say the majority that I've seen, they have not worked out in your favor as a federal employee when it comes to, uh, benefits and retirement. Give you a couple other examples before we dive into these two bills. For those of you that were hired in 2013 and beyond 2013 and beyond, you can go back and view a previous episode. When we talk about fers, RCO and Fers free. What does that stand for? Ra stands for Revised Annuity Employees and free stands for Further Revised Annuity Employees. These are employees that were hired in 2013.
Speaker1:
You're an RA, and if you're hired after 2013, you're in free further revised annuity employees. Now what is annuity mean. Annuity is normally the payout right. So you're thinking oh revised annuity I'm going to get more in my pension because I'm a revised or further revised annuity employee. That is not the case. For those of you that fall into those categories you're hired 2013 and beyond. You were paying more into the system retirement system than a traditional Fers employee, but your retirement benefits stay exactly the same. So when those things came out, that was not for your benefit. That was to collect more for the retirement systems because they were in the red, the retirement systems were losing money. So again, look at the details in these things and the the play on words a little bit revised annuity employee. It's more further revised contribution employee your contributions were modified and negatively impacting your bottom line. So just understand and stay up to date on all the policies, all of the new pieces of legislation that are getting voted on because you want to see how it affects you and if it's going to affect you in a positive way or a negative way. Now look again, I'm going to back up and say what you hear on this. I'm just giving you my opinion. I'm reporting some of the things in the news that you may or may not be seeing.
Speaker1:
Hopefully this is bringing to light some other things, and you can go to different websites and see all of the different policies that are out there, but understand that you are to make your own decision. I can give you some guidance and share with you what's out there. Give you my opinion, but I want everybody to make their own decision to see how these things affect them, whether that is positive or negative. So what are the two bills that we're going to be talking about today? Well this is from Fred Smith Comm. Now Fred Smith there's a lot of great information. Fred Smith as well as some other websites give you information on benefits, pay some updates on policies, just what's going on in the world for federal employees. And the title of this recent article said pair of bills would slash pay for over a million federal employees. This is on Fred Smith comm. I've got the link here at the bottom if you want to see it. You can certainly type this into Google. Want to give them credit obviously for this information and this article that I'm sharing with you today. Pair of bills with slash pay for over a million federal employees. Now how many federal employees are there out there? There's two, 2.5 million federal employees. So there's a lot of federal employees that could be hurt by this What are they? Well, here's the first one.
Speaker1:
The first one of the two. Now, this is the one that's going to more affect people out there than the second one. So I want to harp on this one a little bit. But this is called the Federal Employee Return to Work Act. It was introduced by Senator Bill Cassidy out of Louisiana. But what does it target? What does it target? You can read up on this again. Just this is just a high level highlights here. Here's three highlights. It targets those that work from home telework employees. So it targets telework and locality pay. Now what does this say. This says employees that are teleworking and teleworking should not be getting locality pay because they're not going into that location. Now in some ways I can agree with what's going on. In some ways I can disagree. Just important to note also that not all employees are subject to this. So who's considered an employee? It's somebody that, um, who works not fewer than one day, right? Or not less than 20% of the week. Five day week. So if you work more than one day. Hello, work. Um, if you're just this is you can be affected by this. Now, who is excluded from this? Just want to say this at the beginning. Those that are disabled, those that are part of the Foreign Service, member of the Foreign Service of the United States.
Speaker1:
Federal law enforcement officers, members of the armed forces that are on active duty, um, those are excluded from this. Okay. And just making sure that we understand you want to dive deeper into this to see if you're affected or not, but it would exclude employees who telework at least one day a week from raises and higher locality pay, higher locality pay. Basically, they're saying you're working from home. You don't have to commute to this place. And there are some people that are claiming they work at a certain location and receive locality pay and are nowhere near that location because they're working from home. Maybe they've moved out of that zone or they're in a different place, but their home office, so to speak, and they're teleworking, is in a different place. So there is some accountability on there for the employee if you're not reporting properly. But let's say you are in that area and you're just teleworking and you live in that area and you should get locality pay. In my opinion, if you're in that area, you're living in that area. Maybe you're not commuting to the office every single day. I would I would feel for the government in this if there was if somebody that was claiming to be let's just say, you know, Los Angeles, California, very high locality pay and you lived in a different place.
Speaker1:
You lived in Boise, Idaho, not as high a locality, but you claimed and got because you were teleworking Los Angeles, that office. I can understand that. But It's a proposed bill again. It could affect millions of federal employees. They said it's at over a million. Federal employees can be affected by this. If you're teleworking and considered a telework employee, and you may not get locality, but this would affect everybody, right? It's not just the one offs that are maybe taking advantage of the system. It would affect everybody because telework employees would not be covered by locality pay. So employees covered under the bill would be paid at the rest of the United States rate, because you can go on to the pay scale and you can see all the different localities based upon areas. And then there's a catch all rest of the United States locality adjustment, which is not as high as some of the major cities, metropolitan areas that do get a very significant bump because of the location of where they work. So just understand that if you telework, telework more than one day, um, each week on average, you can be affected by this. If this bill goes through, this was again proposed. So just be aware of what's going on and and the nature of the bill. You can look at the bill online. You can search it up and you can read the bill that was submitted so that you understand this is just a very high level view of this new piece of legislation.
Speaker1:
So you can understand, again, if you're potentially affected by it and how it may affect you going forward. If it were to pass, they said it would start if it passed at the beginning of the fiscal year. And in that way, those that are within this area or within this segment of the workforce would be affected. Now, what would this do? This would save money in what's being paid out. I think those that are negatively affected are the ones that are doing it right, the ones that are actually living in those areas. And there just happened to be teleworking because your cost of living, if you're living in that area, is still high. It doesn't. Just because you don't have a commute doesn't mean you're not living in that area and seeing the the cost of living adjustment or the cost of actual living being is high. I think this is really where this came from. Is is based on the the folks that are claiming a certain area but living in a different area because they're teleworking. It doesn't make a difference. They're just claiming a certain office where they're getting a higher locality pay and living wherever because they're teleworking, right? They're not actually in that area and experiencing that cost of living adjustment because, you know, of where they live.
Speaker1:
So hopefully that part makes sense. And it would just be a catch all blanket for everybody. They're not excluding just the ones that are taking advantage of the system. This would affect everybody. So take a look at that bill, see if it negatively affects you. The second one. Now this goes to that accountability side. So if you're thinking wow that's kind of an interesting thing. Why would they do that. Well the second one, Federal Employee Locality Accountability and Retirement Act, uh, kind of goes to that to retire. Now federal employee locality accountability. That's what they're kind of getting at. But now. Now it goes to retirement as well. Retirement. So it's not just saying, hey, well while you're working, if you tell a work then you're going to, um, be negatively affected because you're not going to get the locality adjustment at all, even if you live in that area. So we're kind of blanket statement there here you would think, okay, the first part of this makes sense. Federal employee locality accountability. If that's where it stopped the accountability Act I'd be like that makes sense, right. If you're, um, not living in that area, we want to hold you accountable. You should just get get the even if you are teleworking in the Los Angeles office, where are you actually living? What is your cost of living adjustment based upon that location? And, you know, should your cost of living or your locality adjustment be decreased because of where you're currently living? Okay, I get that.
Speaker1:
But then when it says in retirement act, I was like, all right, what does that mean? Well, it targets locality pay and calculating retirement benefits. Currently. Currently your high three includes locality pay includes locality pay. So base pay plus locality that's included in your high three. But this would exclude locality pay when calculating Fers retirement benefits. And you're thinking oh that's that's a little rough. Uh I might be affected by that. Well well hold tight, hold tight. If you're a current and active federal employee, the way that I'm reading it is, it's just for new employees. So going forward, if this were to pass, uh, locality pay would be excluded from new hires and their future high three calculation for retirement purposes. So just understand these are the things that are being proposed. Now, is that exactly what's going to go through? No, but there could be modifications. There could be other things along a similar line, you know, who's to say somebody couldn't propose this for new and active federal employees, not just new folks, or who says, you know, some other bill can't come across that could negatively affect you. So just understand that these changes are made with or without your say. I go back to this with or without your say.
Speaker1:
So stay up to date. You don't have to scrutinize it and worry about it every single day, but just keep yourself abreast. Go to these different websites. I said Fred Smith was one where this article was out. There's a few others out there that that put on there good and accurate information when it comes to benefits updates, uh, budgeting, you know, where benefits and retirement reform are usually within different budgets. Uh, there's, you know, proposals back in the day about eliminating the first supplement. And there were proposals that all federal employees should pay 5.5% out of their paycheck. This was way back when I first started with federal employees, and there's always been some outrageous bills and proposals none of them went through. But here's a new one that just came out so just you never know how it's going to get voted on and what they're going to. Decide if you don't like it. If you don't like what's out there, talk to your congressperson. Talk to your representatives. Write them a message. Call their office. Send them an email. Um, these are your elected officials. You can reach out and say, hey, I've seen what's going on. I'm a federal employee. I'd be negatively affected by this. I don't like this. And if there's enough people in their district, in their area that don't like it, or maybe they got a positive or a negative, they know which way to vote to represent their people.
Speaker1:
Again, these are elected officials. They should be listening to the folks that are in their area. So do yourself a favor. If you don't like something that's out there, or even if you do, you can give positive or negative feedback to your representative, your congressperson, making sure when they come to vote that they've heard the requests of their people. They're representing you. That's the way it's supposed to go, right? That's what our government is founded on. So what's my recommendation? I just kind of gave it a jump. The jumped the gun before getting to this point. But I said, reach out to your representative, your your congressperson. Make sure that they hear your voice. Now, you might think, well, my voice doesn't matter. Well, that's. It does. Okay. It does. That's what the they're elected for. That's what they're supposed to do. Now, does it always happen that way? I can't speak on it, but I'm going to say probably not. But they're supposed to listen to the folks that are in their area. Make your voice heard, reach out to them again, phone, email, call and made some of them may even have text lines, or there might be websites you could drop a message in. Uh, let them know if you read something about your benefits, your pay, things that they're voting on. Um, you could give them your approval or disapproval, so be up to speed on that.
Speaker1:
So if you do have questions about other things that are out there, other things that you've heard, you can certainly reach out to us at the federal retirement show. Uh, if you do have questions about your personal benefits and retirement situation, this is what we do on a daily basis. We talk to federal employees about their benefits, their retirement, make sure that you're set up properly. Get all the information that you need. You can go to federal retirement show.com. Fill out the form. We will be in touch. If it's not me personally, one of our reps across the country to review your personal situation, get you the answers to the questions that you have. Make sure that you're set up properly today, as well as on track to retire how you want, when you want, down the road when that time comes. Again, my name is Val Majewski with American Benefits Exchange. This has been the federal retirement show. Thank you for tuning in. I encourage you go back and view our previous content. We have over 100 episodes that you can tap into a lot of information that you can absorb, and maybe you can get a lot of your questions answered before you reach out to us and get your personal benefits and retirement review done. Thank you for joining us and look forward to seeing you on a future episode.
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