If you were counting on a bonus or some other cash award next year, then it might be wise to stop counting for a while.
Federal agencies are about to enter the third month of their fiscal year and, thanks to Congress, they don’t have their budgets.
The agencies don’t know whether they can move ahead with planned projects, and some jobs are at risk because agencies are operating — by order of Congress — at the level of the fiscal year that ended October 31.
A couple of agencies have warned of possible furloughs. Others have said they might not give out so-called “discretionary pay raises,” which are like one-shot cash awards or bonuses.
Other agencies are fearful that the uncertainty over their budgets even as they must finance higher payroll costs could lead to slowdowns or canceled programs. The same thing could happen to Civil Service Retirement System contractors if agencies cutback or eliminate projects because they don’t know where their next nickel is coming from. Or when.
The two big-ticket money items for feds and retirees, however, are still on track: Workers will get the statutory pay raise in January (2.64 percent in the Washington-Baltimore area). Retirees will get the January cost-of-living adjustment (COLA) that will be 3.3 percent for those under the old plan or 2.3 percent for more recent retirees under the Federal Employees Retirement System (FERS) plan.
The regular pay raise, and the regular COLA are solid. Agencies may have to eat all of the costs of the new raise (this happens a lot), but they will pay it. The COLA is also automatic.
Leaving money on table
Would you turn down a tax-deferred 4 percent pay raise?
Well, maybe you wouldn’t, but nearly 300,000 federal workers are doing just that.
They are leaving money on the table by refusing to invest in their 401(k) plan and taking advantage of the generous match Uncle Sam is offering.
All of the workers are under the FERS, which gives everybody an automatic 1 percent match, and offers another 4 percent match for those who put in a total of 5 percent. But they have to play (as in invest) to get it.
Mike Causey, senior editor at Federal News Radio AM 1050, can be reached at 202/895-5132 or mcausey @federalnewsradio.com.
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