Ok, you can if you want to, but it will cost you roughly $350 per year versus waiting until 2014 to retire.

Fedweek produced a somewhat tongue-in-cheek article calling the 2010 National Defense Authorization Act the ‘No FERS Employee Retires in 2013 Act’.

For those who recall, the 2010 NDAA restored sick leave parity between the FERS and CSRS systems, phasing in full sick leave credit for FERS participants in 2014.

Would you gut it out an additional year just for a $350 per year annuity check?  I don’t think so, but a FERS employees ‘on the fence’ in December of 2013 might wait until January of 2014 to retire.

We’ll have to wait and see.

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On December 26th, while we were all busy recovering from the Holiday and headed out for year-end clearance sales, the Treasury Secretary dropped a surprise on us.   He announced that the federal government will once again hit its ‘debt ceiling’ on Dec 31st, and that the Treasury will take ‘extraordinary measures’ to stretch out its checkbook.

Interestingly, the most comprehensive breakdown I’ve found of the ‘extraordinary measures‘ is from the UK’s Guardian, not from a US-based news organization.  The four measures, listed in order of magnitude, are:

  1.  Stop investments in to the Civil Service Retirement and Disability Fund (CSRDF)- the CSRS annuity for retired and disabled CSRS participants (note: I am clueless on the CSRS retirement system as I am not a participant.  The link is informative, but an opinion piece).
  2. Suspending investments in to the TSP G Fund.
  3. Halt issuance of State and Local government securities (SLGS)
  4. Cease contributing to the Exchange Stabilization Fund (used to purchase foreign currency).

What #2 means to you and me is that, among other things, the Treasury Department will take out a 401k loan against your TSP balance.  Specifically, the Treasury will borrow from the G Fund and issue IOU’s to pay them back at a later date.

If this all sounds familiar, it is.  This is one of many extraordinary measures the Treasury took last time the nation neared its debt ceiling in May of 2011.  After the debt deal was reached in August of 2011 (which set up Sequestration, aka the ‘fiscal cliff’), the TSP G Fund balances were made whole.

What’s it mean to you and me?  Probably not much, as long as:

  1.  You don’t take personal offense at the Treasury Secretary raiding your individual retirement funds (Your TSP balance).
  2.  All past and present government employees and military participants in the TSP do not all sell-off their G Fund holdings at once.
  3.  Institutional Investors and sovereign nations continue to purchase US Government-issued debt.

The mechanics of how the G Fund is raided are described pretty well in this 2002 GovExec article, when the G Fund was about to be raided in order to avoid a what-seems-paltry-now debt ceiling limit of $6 Trillion.

The GubMints Gouge for Maximizing your Service Computation Date

* Trick Question – you actually have THREE Service Computation Dates (SCD’s).

The GubMints Gouge for Maximizing your Service Computation Date
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Learn Much More and get a FULL understanding of your Service Computation Date – Download a copy of The GubMints Gouge for Maximizing Your Service Computation Date today!  It’s only $0.99!

Executive Summary:

The first Service Computation Date is your SCD Civilian. This date is very straightforward- it is the day you walked in to your department’s HR branch and commenced employment as a federal employee. This date will stay the same unless you have a break in employment in the federal civil service.  SCD Civilian is used to calculate benefits such as your FERS life insurance payout formula, which is a gratis life insurance benefit (NOT FEGLI) provided to all FERS employees. I will cover this benefit in a future post.

The second Service Computation Date is the one you are used to seeing once every pay period in the upper right hand corner of your Leave and Earnings Statement (LES) if you work for the Department of Defense. This is SCD Leave, used to calculate your accrual of Annual Leave. Accrual rates for annual leave increase based on years of service calculated from SCD Leave.   If you are former active military NOT drawing retired pay from active duty, SCD Leave will be ‘back dated’ based on the years and months of service shown on your DD-214.   There are special cases where SCD Leave CAN ALSO be back dated for former active duty who ARE drawing retired pay, and I will cover these in a future post.

The third Service Computation Date is SCD RIF. This is the date you will be eligible for early retirement from the FERS system if you are offered an early retirement package like VERA (Voluntary Early Retirement Authority) for an agency-wide reduction or RIF (Reduction if Force) if your employing agency decides to cut your individual position. Under either of these, if you meet the time-in-service requirements you may retire early with full benefits (FEHB health care and a FERS immediate annuity). If you are a veteran who performed a FERS ‘military buyback’ credit for your active duty service, your SCD RIF and SCD Leave should match. It is critical that you verify these dates match after you make a ‘military buyback’ deposit.

(There is technically a FOURTH Service Computation Date, but you’ll have to splurge and sacrifice the cost of a vending machine snack to learn about it…. download Maximize Your Service Computation Date today!)

To check your three Service Computation Dates, log in to your HR Database (DCPDS for DoD employees) and look at your ‘My Biz’ tab. You will see a printout that looks like this:

Action Plan:

  1. Make sure your SCD Civilian matches the day you commenced Federal Employment.
  2. Make sure your SCD Leave rolls the calendar backward based on the years and months of credit shown in your DD-214 (if you are former active duty NOT drawing retired pay).
  3. Make sure your SCD RIF matches SCD Leave if you bought back time. Else SCD RIF will match SCD Civilian.

 

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