Fedweek

With the fiscal year 2020 budget cycle just having concluded weeks ago, the next cycle is set to start in only about one month, with new decision ahead on pay, benefit and other matters of importance to federal employees and retirees.

The next cycle is to start, as usual, with a proposal from the White House which is projected for February 10. The last two Trump administration budgets recommended a pay freeze for the following year, although ultimately raises were paid in each successive year—averaging 1.9 percent in 2019 and 3.1 percent in 2020, with variations in locality in both cases.

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The odds of the next budget seeking a raise may have been reduced by the administration’s acceptance of those raises, however; Trump even touted the 3.1 percent figure in a year-end message to federal employees. An early marker for a possible recommendation for 2021 is 2.5 percent, under the formula under federal pay law—a formula that however is commonly bypassed.

Trump’s budget proposals also have called for a stronger linkage between performance and pay, although Congress has shown little interest in that, even in his first two years when both chambers were under Republican control.

The administration is conducting a study of various pay-related issues but even the preliminary results are not expected until the spring and no formal proposal is projected to be made until the fall.

Trump’s budget proposals also have sought a series of changes to retirement benefits that would decrease their value while requiring most employees to pay more toward those benefits; and have sought to vary the government’s contribution toward FEHB plan premiums according to quality ratings of the plans. Apart from some interest among House Republicans, though, those ideas also have quickly gone dormant each year.

Also to be seen is the fallout from language in a measure that Trump signed on the administration’s plan to break up OPM.

That language ordered a study to be followed by analysis and then a potential proposal to Congress, potentially pushing it off the 2020 legislative calendar entirely. There have been reports that the administration will now abandon the idea but no formal announcement has been made.

FERS Retirement Planning Guide 2020