The One Big Beautiful Bill, President Trump’s reconciliation bill, has been in the works for the last few months and now it’s law. The bill covers lots of ground but as it’s worked its way through the House and Senate, different versions have listed proposals which could seriously impact federal workers and their retirement.
The good news is that as the bill worked its way through Congress, most of the proposals affecting federal workers retirement have been dropped.
Things have been uncertain, but here’s what you can count on.
-
- Originally, the bill included plans to eliminate the FERS annuity supplement. This could have had serious consequences for many people who have relied on this benefit. This has been removed, so people don’t need to worry about losing out on this benefit anymore.
- Another proposal that’s been dropped is the plan to change the high-3 to the high-5. This refers to the way that the OPM calculates your annuity payments when you retire. Right now, they take the average of your highest 3 consecutive years of pay to determine how much money you get. The proposal to change this to the high-5 average would have reduced monthly income for retirees – in some cases by a lot. As we assist folks applying for Federal Disability Retirement, we’ve gotten lots of questions from clients. They’re worried that this change might reduce their income, which is a valid concern. Luckily, this proposal has been dropped, and federal workers don’t need to worry about this reducing their monthly income.
- Another thing which might’ve affected federal workers negatively was the proposal to have federal workers pick between moving into an at will status at work or paying much more toward their retirement contributions. This would have created the impossible choice between losing employment protections and practically taking a pay cut. Federal workers can rest assured that this was dropped from the proposal and is not considered law.
- Also, employees filing MSPB claims for retirement will not be expected to pay a fee.
This is likely welcome news for federal workers who have had to endure lots of uncertainty and change in the last several months, but this doesn’t ensure that more changes aren’t on their way. For example, agencies have already begun reissuing RIF notices after the Supreme Court blocked them earlier this year, and a third round of the Deferred Resignation program is being offered to some federal workers.
Thinking about stepping away from the uncertainty?
If you’ve been considering leaving work, now might be a good time to investigate your options. If you’ve been struggling at work because of an injury or illness, Federal Disability Retirement might be the right option for you, allowing you to retire now, avoid the stress of the not knowing what’s next, while allowing you to keep getting paid and get the care you need. If that sounds like something that would help you and you’re ready to plan for your future, give our office a call. We’ll walk through your case specifics for free and help you figure out if Disability Retirement is right for you.
