- The Washington Times - Monday, August 4, 2003

The job security of federal employees is still much, much better than in most places. But it isn’t what it used to be, and it will probably get worse long before it gets better.

The Clinton administration, which was hailed as pro-civil servant, laid off 30,000 feds because it abolished their jobs and bought out five times that many people to cut the work force. And the administration liked government workers.

The Bush administration makes no bones about wanting to contract out many functions (turning them over, at least in theory, to contractors on a temporary basis) or of privatizing operations that would forever remove them from the government.

Either way, smart feds should take steps to prepare for a transfer (to follow a job or function that is being reorganized and relocated), or to ensure that when they leave government they are eligible for key benefits, such as health insurance for life.

Normally to be eligible for lifetime coverage (for you and your spouse) you must retire with an immediate annuity — at age 55 with 30 years, age 60 with 20 years or age 62 with five years of service. But during early outs, feds can retire as early as age 42 if they have 25 years federal service or if they are at least 50 with at least 20 years.

To be eligible to keep their federal health insurance for life, early retirees must generally meet the five-year rule. That says they must have been enrolled in any one of the Federal Employee Health Benefits Plan (FEHBP) plans for the five years prior to retirement.

Many feds lose lifetime health coverage while trying to save on FEHBP premiums. They use their private-sector spouse’s health plan until they get ready to retire — when that plan, or the spouse, may go away or become very, very expensive.

Those feds must observe the five-year rule to be eligible for lifetime coverage. Bottom line: If you don’t have FEHBP coverage, whatever the reason, get it during the next open season (November and December). Then hope and pray that your job, your spouse’s job and your spouse last long enough for you to get coverage.

Medicare is good. Medicare with FEHBP coverage is the best of both worlds. Don’t lose it by default.

Your changing job

Even if you manage to hang on to and prosper in your federal job, chances are it is going to change a whole lot during the next couple years, whether you like it or not, or whether you are there or not. For instance:

• The Defense Department, which employs nearly half the federal civilian work force, will undergo major changes if the House (and Pentagon) have their way. Or less-dramatic but still significant changes if the Senate version of the Defense “transformation” plan prevails. About one in four feds in the Washington area is with Army, Navy, Air Force or other Department of Defense components.

• The U.S. Postal Service is fighting competition from the private sector and the ever-growing use of e-mail to stay alive. The second-largest agency, with more than 600,000 workers, it has at least 16,000 too many people. Early-retirement offers might not save it enough money. A panel has recommended that some fringe benefits, not just wages, be on the bargaining table next time.

• The Internal Revenue Service plans to revamp a number of its operations and to consolidate scores of offices into a much-smaller group of service centers. That will mean layoffs (possibly buyouts and early retirement) for many workers who can’t move with their jobs or who aren’t asked to move.

• The Federal Aviation Administration is becoming more independent and looking at contractors to take over functions performed by highly skilled federal technicians. Unfortunately, their skills aren’t in great demand outside the federal service unless contractors who take over their functions take on feds, too.

In a growing number of agencies, employees are being primed to train contractors who, once they get the hang of it, will replace the feds. Contractors are generally not required to (and are sometimes barred from) hiring civil servants.

Many feds worry that pay — and benefits such as health insurance and pensions — will be greatly reduced (or nonexistent) if they become contract employees.

Feds in most other agencies would be affected by the plans that include calls to eliminate automatic 3 percent within-grade pay raises (they come due every one, two or three years in addition to regular pay raises). They would be replaced by performance-based raises. The plans also call for speeding up procedures for hiring, firing and appeals.

Mike Causey, senior editor at FederalNewsRadio.com, can be reached at 202/895-5132 or mcausey@federalnewsradio.com.

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