The average federal pay raise under the GS schedule in 2009 will be 3.9%. Some federal employees will get a much smaller increase–or none at all.
An argument that risk can and should be avoided with retirement funds by removing money from the private sector and investing in government bonds (similar to the G fund) may gain popularity in the next Congress.
The ideal time to transfer money from the G fund and back into the TSP stock funds is when the market reaches a bottom and is about to start heading back up. Have we reached that point with the current stock market?
You may know that the “average” rate increase for the Federal Employees Health Benefits Plan is going up 8%. That may not be relevant to your plan. Here is more information on how much of a change there may be in your health benefits costs next year.
Your TSP funds have probably taken a dramatic hit. Put the situation in perspective before hitting the panic button and making decisions you may regret later.
A temporary government spending bill will fund the federal government into March of next year. It also contains an average pay raise for federal employees of 3.9% that will be effective in January.
It seems no one is happy with the federal pay system. Many employees and federal unions argue that federal employees are significantly underpaid. But not everyone agrees. The average federal employee in 2007 received a pay and benefits package of $116,450–more than twice as much as the average private sector employee.
New legislation passed the House this week to protect public health by providing the Food and Drug Administration with authority to regulate tobacco products. The bill will cost about $300 million. An influential Congressman says not to worry–the money to fund this legislation will come from changing the federal Thrift Savings Plan. No doubt, these changes reassure TSP investors that Congress is looking out for their financial future.
A pending bill would quietly change the TSP’s investment philosophy. The result would be opening the door to more investment options, confusing many investors, applying more political pressure on the TSP and profiting financial interests with Congressional patrons. The likely losers: TSP investors who are benefiting from a simple, inexpensive retirement plan that is currently a model for private sector retirement plans.
What will your paycheck look like in 2009? It looks like the 3.9% average pay raise for federal GS employees may eventually be approved.