Estimates of Benefits Changes in 2012

By on December 14, 2011 in Current Events, Retirement with 6 Comments

An OPM official stated on November 23rd that there has been no discussion over any changes to employee benefits due to the recent cost-of-living-adjustment (COLA).  The items that would be affected by the COLA are the FERS basic death benefit and children’s survivor benefits. 

In the past, OPM has announced such changes via “Benefits Administration Letters” (BALs).  However, in recent memory, they have never issued a BAL until at least January (and then only in 2009).  In 2008, OPM waited until May 29th to issue the BAL.  By means of comparison, Social Security publicly announced how their 2012 benefits would be affected within one day of the COLA announcement.  Medicare quickly followed suit, and the IRS announced all of their changes over a month ago.

I followed up with OPM asking about 2012 figures and an official stated that at this time there were no changes in the numbers, but that did not rule out any changes in the future. 

Each year those of us who deliver pre-retirement seminars have to estimate what the OPM benefits will be when designing our training material.  2012 is no different.  So, for those who are interested, here is my estimate of how the benefits will change. 

   2011  2012
 FERS basic death benefit (annual amount)  $29,722.95  $30,792.97
 Children’s survivor benefit (one surviving parent) (monthly amount)  The lesser of:
60% of high-three;
$409 per child;
$1409 divided by number of eligible children

 The lesser of:
60% of high-three;
$423 per child;
$1459 divided by number of eligible children

 Children’s survivor benefit (no surviving parent) (monthly amount)  The lesser of:
75% of high-three;
$563 per child;
$1691 divided by number of eligible children

The lesser of:
75% of high-three;
$583 per child;
$1751 divided by number of eligible children
 

 

As I remind participants in my pre-retirement seminars, the last math class I successfully completed was as a sophomore in high-school, so my numbers may be a little off.  I guess we will see whenever OPM gets around to announcing the “official” numbers.

John Grobe’s latest book, The Answer Book on Your Federal Employee Benefits, has just been released by LRP Publications. The book is written in an easy to understand question and answer format and covers all areas of federal benefits from the perspective of an employee at various stages of their career. Order your copy at shoplrp.com.

© 2016 John Grobe. All rights reserved. This article may not be reproduced without express written consent from John Grobe.

About the Author

John Grobe is President of Federal Career Experts, a consulting firm that specializes in federal retirement and career transition issues. He is also affiliated with TSP Safety Net. John retired from federal service after 25 years of progressively more responsible human resources positions. He is the author of Understanding the Federal Retirement Systems and Career Transition: A Guide for Federal Employees, both published by the Federal Management Institute. Federal Career Experts provides pre-retirement seminars for a wide variety of federal agencies.

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