Federal Daily - February 27, 2009
Labor Unions Applaud Measure to Give Tax Break to Military, Annuitants
Federal labor unions applauded a measure that would—if it becomes law—allow federal civilian annuitants, as well as active duty military personnel and retirees, to pay their health insurance premiums with pretax pay, a benefit known as premium conversion. The tax code allows public and private employers to permit their workers to pay for health insurance with pretax wages excluded from both income and Social Security payroll taxes. However, federal annuitants are not eligible to participate. “Many federal employees don’t even know they enjoy an average tax savings of about $820 a year because premium conversion is an automatic benefit handled by their employing agency,” said National Active and Retired Federal Employees Association (NARFE) President Margaret Baptiste. “In fact, they may not know they have it until it is gone when they retire.” The bill, the Federal and Military Retiree Health Care Equity Act, was introduced on Feb. 25 by co-sponsors including Reps. Chris Van Hollen, D-Md., Frank Wolf, R-Va., and Gerry Connolly, D-Va., with the endorsement of Sen. Jim Webb, D-Va. Companion legislation is expected to be introduced soon in the Senate. “This legislation comes at a particularly important time,” said Colleen Kelley, president of the National Treasury Employees Union (NTEU). “Federal retirees have watched their savings go down as their costs, particularly in health care, have risen by double digits.” To see more, go to: www.narfe.org or www.nteu.org/PressKits/PressRelease/PressRelease.aspx?ID=1380.
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Survey: Servicemembers Realistic About Retirement, Some Unaware of TSP
Servicemembers are more realistic than their civilian counterparts on what it will take to retire, but about one-fifth are unaware of the Thrift Savings Plan (TSP), the federal government's equivalent of a 401(k) plan, according to a new survey. The Military Financial Confidence Survey (MFCS), released earlier this month, was funded by the Financial Industry Regulatory Authority (FINRA) Investor Education Foundation in cooperation with the Employee Benefit Research Institute. It showed that, of those polled, nearly one-third of servicemembers (32 percent) believe they will need to save $1 million or more to retire comfortably, compared to only 18 percent of the civilian workforce. Also, it showed that 47 percent of servicemembers surveyed reported feeling either very confident or somewhat confident about their ability to retire at ease, although 22 percent were not aware of the TSP. While 25 percent of servicemembers surveyed said saving for retirement is their most pressing financial issue, the MFCS found that immediate financial problems were of far greater concern, with 29 percent saying paying down debt and 18 percent saying making ends meet was their most pressing financial issue. Preparedness was especially evident among officers surveyed, MFCS found. They were less than half as likely to rely on guessing to determine their savings needs (18 percent, vs. 47 percent for civilians) and were nearly twice as likely to ask an independent financial professional for help (32 percent, vs. 17 percent for civilians). To see more, go to: www.finra.org/Newsroom/NewsReleases/2009/P117866.
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Kelley Welcomes Napolitano Review of TSA Bargaining Rights
National Treasury Employees Union (NTEU) President Colleen Kelley applauded Department of Homeland Security (DHS) Secretary Janet Napolitano for ordering a DHS review of whether the department’s secretary has the authority to grant collective bargaining rights to Transportation Security Administration (TSA) employees. Napolitano testified at a Feb. 25 House Homeland Security Committee hearing that she has asked the DHS general counsel to determine whether she has the authority to grant collective bargaining rights to TSA employees. NTEU believes the law is clear that the DHS secretary or her designee has such authority. The union has been a strong advocate of providing TSA employees with collective bargaining rights—and of moving them to the same pay system that covers most other federal employees. “I look forward to a prompt and favorable decision on this question,” Kelley said. To see more, go to: www.nteu.org/PressKits/PressRelease/PressRelease.aspx?ID=1379.
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Bill Introduced To Relax CSRS Rules on Part-time Work
Lawmakers in both houses introduced a measure on Feb. 25 that would—if passed into law—relax Civil Service Retirement System (CSRS) rules that make it harder for federal employees to transition into part-time work at the end of their careers. The Senate bill, sponsored by Sens. George Voinovich, R-Ohio, and Herb Kohl, D-Wis., corrects an anomaly in the CSRS regulations that discourages such late-career transitions. The House bill is sponsored by Rep. James Moran, D-Va. The legislation would clarify that CSRS annuities—based in whole or in part on part-time service—should be prorated for the period of service that was performed on a part-time basis. “A wave of retirements is set to break on the federal workforce in the next decade,” Moran said. “We need to act now to shore up the civil service by eliminating arbitrary roadblocks for those experienced federal employees who wish to work on a part-time basis toward the twilight of their career.” To see more, go to: http://moran.house.gov
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