- The Washington Times - Tuesday, February 18, 2003

Reaching 50 years of age will have an added benefit for federal and military personnel this August when they will be able to stash an extra $2,000 into their tax-deferred Thrift Savings Plan.
The so-called catch-up contributions will rise $1,000 each year until they hit $5,000 in 2006. They will remain at that level, adjusted upward for inflation, each year thereafter, allowing federal employees to bolster their investment in the government's $100 billion 401(k) plan.
If the stock market cooperates, then feds who take advantage of the catch-up provision could have hundreds of thousands of extra dollars in their TSP accounts when they retire.
Beginning in July, federal and military investors who are (or who will be 50 anytime this year) can sign up to have an extra $2,000 (or any lesser amount they choose) taken from their paychecks for the TSP.
For all eligibles, it will mean they can have $2,000 more invested in the TSP this year. For the relatively small number of workers who make $150,000 or more, it will boost their maximum TSP contribution level to $14,000 this year.
To be eligible to make the catch-up contributions, employees must be making the maximum contribution possible and still be on active duty in a civilian or military position. Retirees can not make the catch-up contributions to TSP, which must be done via payroll deduction.

Thanks to the two T's teachers and television odds have improved for reforming or repealing two laws that hit the Social Security benefits of retired feds and their survivors.
For years, feds have led the fight for reform or repeal of Windfall Elimination Provision and the Government Pension Offset law.
Last year, they picked up a record number of congressional co-sponsors. This year they've got that plus more: angry schoolteachers and enlightened TV viewers.
Once schoolteachers (as in the American Federation of Teachers) got interested in Windfall and Offset, so did powerful members of Congress such as most of the California congressional delegation and Sen. Hillary Rodham Clinton, New York Democrat.
Windfall reduces monthly Social Security benefits by as much as $270 per month for retirees who didn't get paid into Social Security for a full (30-year) career, like most private-sector retirees.
The Government Pension Offset law, reduces and, in fact, usually eliminates the spousal or survivor benefit that people who get public pensions (from work not covered by Social Security) expect to receive based on their private-sector spouse's earnings record under Social Security.
Just two weeks ago, CBS ended one of its nightly news programs with a lengthy (for TV) report on Windfall and Offset, and its impact on public employees who worked briefly under Social Security but spent most of their careers paying into their civil service retirement funds.
While federal, postal and retiree groups deserve the lion's share of the credit for slowly, steadily building an anti-Windfall, anti-Offset base in Congress, the late appearance of the two T's (teachers and TV) may tip the scale.
Before even the most optimistic were hoping for "reform" of the Offset and Windfall rules. Now some are hoping for outright repeal. Although that's unlikely, its an important political step, and it could signal the beginning of the end for the two gotcha laws.

Medical Savings Accounts
Look for the Bush administration to push for "reforms" in the federal health program that would include Medical Savings Accounts.
MSAs are popular with many people because they allow them to bank money not used, and they get a tax break.
Congressional fans say that MSAs give people more control over their spending, and can reduce the costs of the federal health program. The government (that is, the taxpayers) pick up 72 percent of the average total premium for workers and retirees.
The downside, opponents say, is that MSAs discourage people from seeking preventive medical services. The National Association of Retired Federal Employees describes MSA as "plans that combine a high deductible catastrophic insurance policy with a tax-exempt savings account dedicated for health care expenses."
Healthier enrollees tend to gravitate to MSAs because low health care users are rewarded with unspent MSA balances at the end of each year. Less-healthy enrollees avoid MSAs because they are liable to pay out-of-pocket costs.
As a result, higher health care users congregate in traditional comprehensive plans and that raises premiums in those plans, according to NARFE

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