There are plenty of views on how the Trump administration will impact the federal workforce - most of them pointing to the negatives for current federal employees. A recent Washington Post headline declared “Trump has a plan for government workers. They’re not going to like it.”
When you look more closely, most of what President-elect Donald Trump is championing with regard to federal employees is very palatable and likely to be embraced by the individual employee.
Let’s look at some examples:
Firing Feds Faster
One of the first priorities targeted by top Republicans appears to be eliminating the restrictions when it comes to firing incompetent employees. If you’re one of those not-so-effective employees, this could be a bad sign, but the vast majority of feds are hard-working, dedicated public servants who will applaud the change that finally sends their inefficient co-workers packing.
The federal workforce has no more or less than its share of employees (compared to the private sector) who are simply not working out in their current roles. The ability to quickly remove these ineffective workers is actually encouraging for competent workers who stand to become more productive when they’re not being disillusioned by “slackers.”
Changing Retirement System Rules
There are various versions of plans to eliminate what is often referred to as a “generous” retirement system, replacing it with a defined contribution-style plan. The assumption is that current federal employees would find this change distasteful; however, it wouldn’t impact those currently working for the federal government - only new hires. Most employees recognize that if it doesn’t affect them - they don’t really care.
Considering that most new hires are younger generation millennials who do not see themselves working in a federal job (or any one job for that matter) for 30+ years, the transition to a more portable defined contribution plan probably isn’t a real issue. Of course, working in a job where you earn a pension at the end of a career is preferable to one without a pension, the reality is planning for retirement will change significantly for future generations.
Trump has promised he will freeze hiring by not replacing employees who leave as part of his first 100 days strategy. For anyone who has been paying attention, this has been going on for years with agencies and their employees being consistently asked to perform miracles by doing more with less. Most federal employees are deaf to this idea as anything new, because they’ve been living it for years.
FedWeek’s recently released report titled, “What’s Ahead for FEDs in a Trump Administration,” reiterates the possibility of reincarnating a past stated goal of reducing the workforce by 10% over four or five years through a combination of attrition and a hiring freeze.
According to the Office of Personnel Management, the federal agency responsible for human resources oversight of all agencies, roughly 25% of the federal workforce is eligible to retire today. Replacing two of every three workers who retire would leave us with nearly the 10% reduction that continues to be mentioned as the goal.
This does not resolve the need to address exactly what it is that we want the federal government to be responsible for. Rather than cutting the workforce with a wide scythe, it would be more realistic to look at the actual work that remains within the government’s purview.
With all of this to consider, it might seem like a good time to retire if you’re an eligible federal employee, but for those who have been around for an entire career, you’ve been through enough administration transitions to understand that this too shall pass.
Ann Vanderslice (www.annvanderslice.com), president and CEO of Retirement Planning Strategies, helps federal employees understand their benefits, maximize the value of their benefits, and plan for retirement, as well as organize income planning and IRA distributions. Vanderslice holds the Registered Financial Consultant designation from the International Association of Registered Financial Consultants and the Chartered Retirement Planning Counselor designation from the College for Financial Planning. She is author of “Fedtelligence 2.0 - The Ultimate Guide to Mastering Your Federal Benefits.”
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