Posted on Thursday, 31st December 2009 by Dennis DampPrint This Post
Can’t believe it is already 2010! I can recall discussing the 21st century back in grade school and just how far away that seemed. Now that it’s not only here but flying by at a record pace, are we all ready to tackle what challenges lie ahead?
I retired from government service five years ago today and I totally enjoy my new found freedom. After 35 years I personally needed a change. I didn’t actually retire, I still work full time but on my terms. The difference is that I now make the rules, set priorities, and can get things done without all of the bureaucratic red tape, rules and regulations that often frustrate federal workers. Even though it was often difficult working within the system, I enjoyed my many years of service, first with the military and then with the DOD and FAA.
Since retiring I expanded our Free Federal Employee’s Retirement Planning Guide web site that we recently redesigning, added experts to answer your benefits and finance, wellness, and lifestyle questions, and a new Blog will be launched in early January. Check out the new site and spread the word by forwarding these articles to your friends and associates that will benefit from these new services.
What’s Ahead for 2010
- A 40% Excise Tax on FEHB Plans (Proposed under Senate Plan)
- Important Documents (Keep these handy)
- The 2010 COLA!
40% Excise Tax on FEHB Plans (Proposed under Senate plan)
A 40% excise tax is proposed on our health care plans. An article posted on ourfuture.org laid out the ramifications of the new Senate Health Care Bill’s impact on our health benefits costs. You can download the full pdf version of this report and print it out. This is a must read article for any federal employee and retiree covered under a FEHB plan. The example they use is the Blue Cross Blue Shield standard option plan which covers 3.8 million Americans including retirees and dependents. Under the Senate plan a 40% excise tax will be added that will dramatically increase our coverage costs and the tax burden per worker from 2013 to 2022 is anticipated to be $20,432 for those with family Coverage! Read the article for all of the details.
This is just one of many reasons why I don’t support the new health care legislation and hope it doesn’t make it through the process. If this legislation is passed we are in for cuts in service, rationing of care, extended wait times, huge federal deficits, and escalating costs well over the current projected annual health care cost increases we now suffer with. The Wall Street Journal also published a good article on this subject.
There is a lot of uncertainty right now because of the compromises that must be struck between the House and Senate bills. We don’t know if this will be included in the combined bill or shelved for future consideration.
Call your Senator and Congressman to let them know how you feel about this issue. You can call the U.S. Senate switchboard at (202) 224-3121 and ask to be connected to your State Senators. Tell your Senators what you think of the new health care legislation.
Important Documents (Keep these handy)
I receive many emails and calls from annuitants and survivors who have either misplaced their CSA number or lost their pin number for OPM’s retirement website. Mortgaging companies are now asking retirees for formal documentation detailing their annuity payouts and a statement of what the surviving spouse will earn when the annuitant dies. I also receive calls from family members who must report an annuitant or survivor’s death to OPM and just don’t know who to contact and what they need to have available when they call.
Annuitants, survivors and family members can find that information on their annual Notice of Annuity Adjustment that is sent to all retirees and survivors in late December of each year. Look on the back of the statement at the very bottom and you will find OPM’s toll free number, email address, and website. We posted this information online for easy access and we include links to this contact information on our FAQ and Site Map pages as well. Annuitants needing official documentation for a new loan or to request a web site password must call the OPM Hotline to obtain this information and you will need your retirement claim number that is listed on your Annuity Adjustment statement when you call.
All retirees and survivors receive a Notice of Annuity Adjustment statement and a 1099-R for tax filing each year. Keep these documents in a file or locations that you can easily find and advise your family members where the documents are located. You will find your Claim Number on the forms and other important information. Spouses and family members can obtain step-by-step guidance on what to do when an annuitant or survivor dies online. Use our free Survivor’s Checklist, printout a copy and keep it with the forms mentioned above for your spouse and heirs’ use.
The 2010 COLA!
Unfortunately there won’t be a COLA increase for either FERS or CSRS annuitants in 2010. I received a number of emails asking why. You can read about COLAs and also review the last 10 years of COLA adjustments on our site. Basically, the Consumer Price Index (CPI) was negative in 2009, at least they don’t decrease our annuities when that happens.
My concern about the CPI is that it excludes things like volatile commodities and it is weighted for various factors. Even though the indicator shows a negative CPI, I don’t see it in the grocery store or checkout counters where I live. All I know is that grocery prices have increased substantially even after gas prices dropped dramatically from the peak a year or so ago. When I go to the office supply store a ream of paper has increased 100% from 2 years ago. It all seems like smoke and mirrors and I’ve heard reports that inflation is really in the double digits especially when you factor in the falling value of the dollar.
Federal employees will do much better in 2010 than retirees. I uploaded the 2010 salary increases last week showing an average 2% increase including locality pay. The average federal employee’s salary was $79,197 in 2008 and federal worker’s salary plus compensation (benefits) averaged $119,982 which is more than double the private sector average of $59,909. Average salaries are actually higher now because of the pay increases in 2009 and 2010 which equates to higher annuities for future retirees.
I am the author of The Book of U.S. Government Jobs, now in its 10th edition, and I obtain comprehensive salary figures from the Bureau of Economic Analysis for my books. The average compensation data is the total federal civilian workers compensation of $223,647,000,000 from line number 89 on Table 6.2D divided by the total number of federal workers (1,864,000) on line 89 of Table 6.5D . I provided links to the tables here because so many consider these numbers high when they look at their salaries. These are average figures.
Visit our other informative sites
- http://federaljobs.net (Federal Career & Job Center)
- http://federalretirement.net (FREE Retirement Planning Guide)
- http://federalretirement.net/jobs.htm (Retiree Job Opportunities)
- http://fedcareer.info (Career Development Center)
- http://postofficejobs.info (Postal Career Center)
- http://ehsjobs.org (Environmental Health & Safety Job Center)
- http://stolenplates.com (What to do if this happens to you)
- Educational Opportunities (Find educational opportunities in your area)
The information provided may not cover all aspect of unique or special circumstances and federal regulations are subject to change. To ensure the accuracy of this information, contact your benefits coordinator and ask them to review your official personnel file and circumstances concerning this issue. Retirees can contact the OPM retirement center. Our reply is not intended nor should it be considered investment advice. Our reply is time sensitive. Over time, various dynamic economic factors relied upon as a basis for our response may change.”
Last 5 posts by Dennis Damp
- Retirement Challenges & Planning Assistance - May 17th, 2013
- Social Security Update, Medicare Concerns, & Retiree Jobs - May 3rd, 2013
- Collecting Social Security While Still Working and CSRS Offset Concerns - April 12th, 2013
- TSP Investment Timing and The Retiree’s Dilemma - April 1st, 2013
- The Sequester’s Many Faces – Furloughs, Pay Freeze, & Fewer Resources - March 13th, 2013
- TSP Annual Statements and Highlights - February 22nd, 2013
- 1099R Statements, Replacement Copies, & Upcoming Changes - February 8th, 2013
- TSP Roth Conversion Update - January 21st, 2013
- TSP ROTH Conversions, Benefits, & Limitations - January 5th, 2013
- Strategies for Increasing Your Retirement Annuity and Income - December 7th, 2012
- Open Season Tips, Direct Deposit Changes, & Retiree Job Opportunities - November 14th, 2012
- Size Matters, Especially in Retirement - October 25th, 2012
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