Q. If the federal government fails (as it has many times) to pass a federal budget and a continuing resolution remains in place, how will this affect the supplement for those employees (soon to be retirees) under FERS?
A. Like CSRS or FERS annuities, the special retirement supplement is paid out of the Civil Service Retirement and Disability Trust Fund and isn’t subject to the annual appropriation process.
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If it isn’t subject to the appropriations process, then why is this being threatened during the budget appropriations process. I read the FERS retirement funds are held in a CSRDT fund and separate from the annual budget but losing SRS keeps coming up. Are they going to raid this fund for other things or is it all grandstanding.
While that threat is mostly posturing, in theory a law could be passed that would block the trust fund from expending any money to pay the special retirement supplement to newly retiring federal employees. Possible, but unlikely.
Will the elimination of the special retirement supplement affect existing recipients or just new retirees and what will be the effective date?
Since language has yet to be drafted much less passed into law, there’s no way to know.
Update this am: Senate has passed its version of the budget which does NOT mention cuts to our Retirement system. Now they have to get with the house to iron out and compromise with the house bill that had all the changes. Word is the Senate plan, if adopted, would speed up the process in time to get tax cuts in, which is the ultimate goal. If the House insists with these cuts also, then the Dems and Repubs have to argue and drag out the process longer, hear various amendments and maybe spend the holidays in DC lawmaking instead of being home drinking eggnog. Some Senator said maybe we can take this budget this year and try for more cuts next year…which gives us another fiscal year to get in under the wire….30 Sept 2018 MRA. I just might make it with my SRS intact. Credit to Nicole Ogrysko for explaining how the process is going.