Interview transcript

Terry Gerton Timely payments, rescinding stop work orders, and monitoring long-term impacts are top priorities as agencies restart operations. We’ll also look at key takeaways from PSC’s Vision Conference with CEO Jim Carroll. Jim, thanks for joining me.

Jim Carroll Terry, thank you so much for having me on.

Terry Gerton You are coming off two days of the PSC Vision Conference. Let’s start there. What were the biggest insights that you heard over those two days of discussions?

Jim Carroll Well, I’ll say three insights. One was it was a brutal way to start the Monday after Thanksgiving holiday … But, we had to accommodate the really great speakers on — including really some wonderful keynote speakers. Next year it will not be the Monday after Thanksgiving. So for all of our members, you know, for this event, we’re thankfully able to get a better date. But more importantly, as I mentioned, really was hearing from some of the leadership in the administration about, what is their projections for 2026 and how the money, as being appropriated by Congress, as the budget request and where they expect it to go. And so, one was just the amount of money, which is something worth talking about. The other thing and is really the use of AI and how the embrace of AI by the federal government is rapid, but it’s also a bit unknown. We’re moving forward in this space of the government using AI without everyone necessarily understanding all the implications. So I think so far those are the two big takeaways that we’ve been able to summarize. And, it’s a great event for our members and a few guests.

Terry Gerton What did you hear about this administration’s take on industry partnerships?

Jim Carroll You know, I think we have to sort of look back at DoD. I think DoD with Secretary Hegseth is a good example of that. As you recall, in November, Secretary of War Pete Hegseth met with our members and the folks that do defense contracting and said that they really do want to do a radical revolutionary overhaul of the FAR, and especially, in the sense of producing deliverables and measuring outcomes based on performance and getting this done right and how the military, how the branches within DoD have been tasked with coming up with orders … by mid-January, 60 days, in terms of how they think we can best streamline the process. And our hope is that this proposal really has legs. And we think it does. There’s support in Capitol Hill. There’s support in the administration. And of course, we — the leading trade association for companies that do business with the federal government — we’re completely supportive of most of these changes. There are things that we’ve been asking for for years that would really expedite the awards. Hopefully, with the grace of God, cut down on the number of appeals following an award, which seems to be a bit of an epidemic of companies now just expect there to be an appeal. And so we’re really very hopeful that this will stick and we’re optimistic that it will. And so that’s one of the major things, and then of course, as I mentioned, the amount of money in government services. And there was discussion about that … this week from the assistant secretary of war, that you know, there really is going to be an extraordinary amount of money, $850 billion at DOD with at least $180 billion toward services. And that’s what our very, and I’m proud to say, patriotic, companies that want to do the right thing for the war fighter and the taxpayer are eager to jump on board.

Terry Gerton Speaking with Jim Carroll, CEO of the Professional Services Council. Jim, tell us more about what you heard about the deployment of AI from the government agencies and within the contractor community.

Jim Carroll Yeah, so within the government we had speakers from across the government. As I said, Assistant Secretary of War, Michael Cadenazzi, who handles the industrial base policy, talked about an initial $180 billion, $200 billion in services, and how the use of AI and services can change and how there needs to be flexibility because of AI, that when some of these contracts call for a hundred seats to be filled, that there is enough flexibility that contractors can come back to the government and say, hey, we’re gonna use some, you know, AI, some other advanced technology. We can reduce the number of personnel from a hundred to eighty people. And in the past there’s been some resistance. Both the Department of War and some of the other departments, you know, really stressed that they want flexibility because of AI. I’ll say one thing that was interesting, and we’ve seen and heard this from members, is that there are a fair number of new companies who have never put in bids for government work that are using AI to not only write their proposals, but as I mentioned, also the use of AI to appeal. I mean, it just seems like it’s a press of the AI button, if you will, and an appeal is generated. And we need to get away from that, you know, for valid, justifiable awards, let’s move forward and deliver good results. And so we’re very optimistic. The recognition that AI has some limitations to it, but that it can deliver fast results is something that will be very interesting to see in 2026.

Terry Gerton Jim, one of the things that you and I have talked about, we’ve talked about it with a lot of contracting folks on the show is the uncertainty about the federal government workload for contractors. I’m wondering what you heard from your members over the course of this conference, especially as we’re sitting right now just post-shutdown and possibly pre-shutdown in January. What what are you hearing and what is PSC’s advice?

Jim Carroll Terry, don’t jinx us. No more government shutdowns. No, we’re tracking January 30th very closely. We had very senior meetings in the White House in the West Wing with a couple different meetings because of the shutdown to talk about the impact that it is having on results and the impact it is having on protecting the homeland. And so, what we told them in addition to the impacts is when the government gets up and running, because shutdowns end. This was a record-breaking one, but shutdowns do end. And as soon as they end, you know, it’s to tell the individuals in the departments, immediately start processing these invoices, get these payments out the door. You know, there are a fair number of companies, especially in the small to mid-size, that really did not have stable cash flow. They really were hurting. We saw some layoffs or at least, you know, sidelining of key employees, and it really presented a huge financial strain on the companies, which flows down to the employees, which flows down to the communities. And so that’s what we asked for. We asked, in addition, that the momentum on getting contracts, new contracts out the door, be, you know, jump-started as fast as possible. Historically, it takes quite a while after a shutdown for things to resume sort of a normalcy. And, we don’t have time for that. In addition to the financial impact, truly the impact on national security. The world is facing new and dangerous threats that seem to be magnifying every day. And our contractors are able to deliver world-class results and protection. And unless they get up and running immediately, you know, those threats are very real.

Terry Gerton Are you seeing that kind of activity coming out of the government agencies now a couple of weeks on from shutdown?

Jim Carroll You know, we’re actually pleasantly surprised. And I hate to say that word surprised, but in the past, it does seem to be a bit of a lag. Our message seems to be delivered. We’re getting payments out quickly. Maybe not all and not every department, but it seems to be beating historic records in in terms of getting payments out. Obviously, some companies are still hurting, you know, waiting to get paid for work that they performed. But we’re happy so far. But Terry, I can’t believe you brought up January 30th of next year. You know, is this a lull between shutdowns? I hope not. I hope that they’re able to resolve, you know, some of the significant issues, healthcare, things like that. But as we’ve talked about, there’s not a lot of workdays up on Capitol Hill, and we just cannot have another shutdown.

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Interview transcript:

 

Terry Gerton We’re sitting here after weeks of uncertainty and missed paychecks during the government shutdown and a lot of people are probably feeling kind of anxious about their finances. How does that stress from just day-to-day situations spill over into how people make decisions about investments?

Art Stein Well, stress and emotion make a big difference in how people make their investments. And with the TSP, it makes a big difference in how much people are putting in the stock funds, which are the C and the S and the I funds, and then how much they’re putting in, well, especially the G fund, which is a short-term bond fund, really, it’s more of a cash account. And you know, what I’ve seen time and again for 30 years is that when the stock market crashes, federal employees and retirees tend to get disgusted and move money into the G fund. And the problem with that is, there’s never a good time to take it out of the G fund and reinvest. Usually they’ve made that move after the market has declined and frequently don’t get back in until it’s gone back a lot. So really what we caution our clients to do is to set an investment plan. And part of the investment plan is to know what you’re going to do when the stock market does crash. Because inevitably it’s going to. We don’t know when. Stock market crashes average about one every four years or one every seven years, depending upon the time period, or somewhere in between. But they are a regular part of the market cycle. And what we mean by a stock market crash is that a particular stock market like the S&P 500, which is the basis for the C fund, goes down 20% or more from a previous high. And that’s also called a bear market. A bull market is when, let’s say, the S&P 500 increases more than 20% from a previous high. And people really avoid investing in stocks or putting too much money in stocks because they fear the bear markets, they fear the crashes, they don’t like the volatility. But we’re always having volatility in any market except a bank account or the G fund. Volatility is just a fluctuation in value. Now stocks are more volatile than bonds, that’s clear. But what investors should do is trying to determine appropriate allocation between stock investments and bond investments and bank accounts. And the TSP, that means what percentage of your investments do you want in the G and the F funds, which are bonds and cash accounts, and what percentage do you want in stocks, which are C, S and I? And once you choose that percent, stick with it unless there’s a good reason to change. And the stock market crash is not really a good reason to change. And if the stock market crashes, especially for employees, that’s an opportunity. They’re investing money every two weeks. And of course they’d rather buy shares in the C and the S and the I funds when those are down and cheap than when they’re high and expensive. So just being able to stick to it really makes a difference.

Terry Gerton It’s really hard to imagine that the market is going to crash anytime soon. It’s been on such a steady upward climb for so many months. And yet you talk about when that correction, which is impossible to predict exactly, but pretty possible to predict generally happens, people do the opposite of standard recommendation. They sell low and then try to buy again high instead of buying low and selling high. Talk to us again about what kind of planning can help people avoid the emotional response to that sort of occurrence.

Art Stein Well, I think it’s very important to one, know and admit to yourself and take into account that the market’s going to crash. I mean, it’s going to happen. And it’s not unusual. It’s typical. And two, especially for employees, don’t change your investment allocation if the stock markets crash, unless you’re increasing your percentage allocation of your biweekly investments into the TSP fund. If you’re increasing the percentage going into the stock funds, that would make sense. And, you know Terry, when we speak to TSP millionaires, one consistent theme is that they had most of their investments going to the stock funds. And they did not change that when the stock markets crashed. They just kept investing. They accepted that. It was a long-term investment. And they just stuck with it.

Terry Gerton I’m speaking with certified financial planner Art Stein of Arthur Stein Financial. Art, we’re talking about a disciplined, non-emotional approach to investment here, but we’ve just come out of the longest government shutdown in history. And the current continuing resolution only goes through the 30th of January, about two and a half months from now. So how should feds think not just about their investments, about building up or building back their emergency savings if they had to dip into it during the shutdown?

Art Stein Well, this shutdown was horrible, as we know. People were living on credit card debt in many cases. It shows how important it is to have an emergency fund, three to six months of expenses in a bank account, or maybe the G fund. And what we sometimes have to recommend to people, we don’t like doing it, is to reduce your contributions to the TSP to 5%. Because in many cases, Terry, we’re speaking to people who are maxing out their contributions. But no, if you don’t have an emergency fund, that’s a mistake. Reduce it to 5%. Don’t go below that because you want to get the full 5% match from the federal government. Take that extra money that you were investing and use it to build up a bank account, three to six months of expenses. And especially, you know, this is so crazy. We’ve gone through this long shutdown, and then they had this big victory. But when you look at the victory, it only funded the government for two and a half months. I mean, how short term is that? So now is a good time. Just get on the TSP website and reduce your contributions to 5% and build up some cash. I mean, I’m praying and hoping that they won’t do another shutdown on you know, January 30th, but as we all know, things are not good with these negotiations.

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The federal offices are back open and hundreds of thousands of federal workers have returned to work after the longest shutdown in history. But nothing is back to normal — federal workers say morale and trust in leadership are at an all-time low, tensions are high between furloughed staff and those who worked through the shutdown, schedules are slipping and projects are being pushed back, and more people are accelerating their retirement plans or leaving federal service altogether.

The recent shutdown, however, has just exacerbated the existing problems and added to what federal workers described as an already extremely trying year for the federal workforce. 

“As if morale wasn’t already non-existent, it sure is now. I expect a surge of people to (quiet) quit and I expect the remaining players to be bombarded with work with no support or guidance from leadership,” one employee told Federal News Network. 

“The mission is dead. Operations are barely running. Morale is toast,” another federal worker said. 

“Everything about being a federal employee in 2025 has destroyed workforce morale — from constant [reduction-in-force] threats, to losing colleagues to early/forced retirements and firings, to the loss of any telework to facilitate work/life balance for working parents or senior caregivers, this is the worst professional year I have experienced in nearly 20 years of service to my country. Nothing about the current [Office of Management and Budget] approach to leadership has moved our country forward,” another employee said.

A Federal News Network survey, conducted online between Nov. 17-30, asked federal workers what it has been like going back to work after the 43-day government shutdown. Survey respondents were self-selected, and they self-reported information to verify their status as current federal employees.

Federal workers described the experience as disorienting — returning to thousands of unanswered emails and scrambling to catch up with partners who kept work moving during the shutdown. There was little to no guidance from top management; they reported overwhelming backlogs and project schedules going completely awry.

Many said overloaded or outdated IT systems, lapsed system access and computer issues made even basic tasks difficult.

“IT issues as devices are set to expire and become inactive after 30 days of non-use, supervisory chain is still not back to work and others are catching up on leave. There are large gaps within the higher chain of command, tremendous amount of confusion, no clear description of how to verify back pay and related deductions are accurate, statutory deadlines did not stop during the shutdown, so crushing workload to return to,” one employee said on Nov. 24. 

“It is not so simple as flipping a switch. We are still waiting on funds to arrive and are unable to work on things until those funds arrive,” another federal worker said on Nov. 18. 

“I engage in very technical work. A 1.5-month shutdown has thoroughly derailed my train of thought. It will take a long time to refamiliarize myself with what issues were being sorted out, what solutions I had been pursuing, even how any of my own code works,” another employee said. 

Several federal workers said their agencies could face budget cuts due to not hitting mandatory spending benchmarks — goals that are “impossible to achieve” after a 40-plus day lapse in appropriations.

In addition, many employees now have to use their “use-or-lose” annual leave before the end of the year, which will further delay progress and extend timelines.

Nearly 1,500 people responded to the survey. Out of 739 federal workers who responded to this question, nearly 47% of respondents said it would take them more than two weeks to catch up on all the work missed during the shutdown.

“My program was halted immediately, but will take two months to ramp back up,” one worker said. 

“Can you really ever catch up? Some work will just be lost — deprioritized in the chaos,” another federal employee said. 

And the threat of another shutdown is looming — the bill President Donald Trump signed into law keeps the government open only through Jan. 30. The uncertainty, workers say, is making people reluctant to fully dive back into work. 

“With holidays coming, this will set projects back months,” one employee said. 

Federal employees who worked during the shutdown also expressed “apathy and annoyance” toward furloughed employees who did not work during the shutdown, saying the resentment has led to conflicts and made collaboration difficult. 

“Expect operations to be negatively affected as the furlough has driven a wedge between those furloughed employees and those who remained on the job,” one federal employee said.

Receiving back pay

Most of the federal workers worked without pay during the shutdown, missing more than four weeks of pay. 

When the government reopened on Nov. 13, the Office of Personnel Management said it would take several business days for workers to get their back pay.

Out of 728 individuals, 200 federal workers — about 27.5% — said they received their back pay within one-to-three days after returning to work. Another 200 said they were paid within four-to-seven days. For the remaining 323 individuals, it took more than a week to receive their back pay.

Many employees told Federal News Network that there was a lot of confusion about how to process timesheets and guidance changed a few times the first two days, which had contributed to the delay in issuing our pay.

“Smithsonian still has not managed to get us paid. They are wasting time making sure everyone has the correct time codes rather than getting people paid. It’s more important to them that they take a couple weeks to record we were furloughed. Can’t pay the mortgage, but at least they’ll have the correct time code,” one employee said on Nov. 22.

One Interior Department employee told Federal News Network on Dec. 1 the agency had only paid them for 72 hours worked during the shutdown and had promised the remainder by Nov. 25 — they are still waiting on that payment. They added that none of the 69 civilian employees at the U.S. Park Police have been fully paid. Sworn officers, however, received a flat 80 hours per pay period, and while overtime and night-differential corrections were made, it’s not clear if that pay had been issued. 

“We have not heard anything about when we will be paid beyond the deadline that passed a week ago, no reason has been provided to explain the delay,” the employee said. “I will be retiring early. While not the only reason, the recent hijinks played a role in my decision.”

One employee at INTERPOL Washington told Federal News Network on Dec. 1 that personnel there have received only partial back pay and some employees have only received pay for one pay period. The issue stems from the Justice Department’s decision to dismantle INTERPOL Washington and fold its remaining functions into the U.S. Marshals Service during the shutdown — while making changes in the pay system while payroll processing was underway.

The workers were initially told they would receive all of their back pay on Nov. 21, but instead received partial pay on Nov. 24. DOJ then promised the rest by Nov. 28, but only a handful of people were paid over that weekend. The agency now says it has finally identified the problem and that employees should be paid by Dec. 3.

“Every time that the DOJ claims to find a solution and puts another date out for when we should get paid, there is just another disappointment,” the INTERPOL Washington employee said.

Another Air Force civilian at Lackland Air Force Base, who was told they would be paid last week, is still waiting for their back pay now nearly three weeks after the shutdown ended. On Monday, they were told that “the comptroller squadron is working diligently to manually process over 3,000 timecards with an estimated completion date of Nov. 29.” 

For many of those who received back pay, determining whether the amount was correct was nearly impossible. 

Dozens of respondents said they were unsure if their payments were accurate because agencies did not issue accompanying paystubs for the affected pay periods. Several employees said since payroll providers such as the Defense Finance and Accounting Service do not provide leave and earnings statements for retroactive pay, meaning they will have to wait for the next pay period to verify whether the amount is correct.

“It seems to be off by a few hundred dollars, but I can’t determine where the discrepancy is,” one federal worker said on Nov. 26. 

“We don’t know since it was a partial payment with no documentation,” another respondent said on Nov. 24. 

“Many people at work say that their paychecks were less due to taxes on lump sum payouts,” another respondent said on Nov. 25.

More feds eyeing the exit

Federal workers were already overwhelmed, stretched thin and struggling with high levels of anxiety following the Trump administration’s push to reduce the size of the federal workforce. Now, the shutdown is pushing even more people out the door. 

Out of 758 federal workers, 329 respondents — about 43.4% — said that the shutdown made them reconsider staying in federal service.

Many said they are actively looking for an out, while for others the shutdown reinforced their decision to retire

“It is so untenable that I plan to quit in the next month or so. The situation has gotten even worse since returning,” one employee said.

“The shutdown did solidify that I will retire the first date I can,” a federal worker said.

“I have dedicated 20 years to serving my country, including service in the U.S. Army. It’s pretty thankless to be a federal civilian employee now. I used to encourage my children to pursue a similar career but now I am encouraging them to stay away from federal service,” another employee said. 

Financial, mental health toll

More than half of federal employees — 58% of respondents — reported experiencing financial challenges during the shutdown, and nearly a third said they struggled to pay bills. Over 51% of federal workers said they had to rely on credit cards, loans or emergency savings to pay their bills, while 14% reported missing rent, mortgage or other payments. About 10% of federal workers said they needed outside assistance, such as food banks and relief programs. But notably, nearly 62% said the shutdown impacted their mental health.

Several respondents said they dipped into retirement accounts or cleared out emergency savings to stay afloat, while others reported delaying Christmas shopping, postponing home repairs or borrowing from family members to cover basic needs. Younger workers and those in single-income households were hit especially hard.

And while some said they were fortunate enough to have savings or a second household income, many still described the experience as deeply destabilizing. 

“Fortunately, we are a two-income, no-child household and good savers. But I did give a monetary gift to a colleague who is in a much more tenuous situation,” a federal worker said.

“I requested a skip loan payment on my car since I could without fees. I have paid for things out of savings and since I’m a bit older I can do that, but I’m depleting savings still as I continue to not be paid,” one employee said.

“Outsiders calling it a ‘free vacation’ don’t understand the effects the shutdown has on furloughed staff,” another employee said. 

 Workers described experiencing “constant dread and worry,” “incredible stress and anxiety” and “the feeling of absolutely no protections.”

“It was very stressful. I had to take a part-time job,” one employee said. 

Ultimately, one worker said, the impacts were “cruel and petty and proved to be irrelevant to either side achieving their stated goals.”

If you would like to contact this reporter about recent changes in the federal government, please email anastasia.obis@federalnewsnetwork.com or reach out on Signal at (301) 830-2747.

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• Most funds in the Thrift Savings Plan saw minimal growth in November, with 15 of 16 coming in higher than where they finished in October. But no fund saw an increase greater than 0.64% for the past 30 days. And only the S fund saw a month over month decline, dropping 0.45%. The I Fund remains the biggest winner for the year with a total increase of 28.54%, while four L Funds also produced returns of greater than 20% in 2025.
  (TSP returns slow in November, but remain mostly positive - TSP)
• The Postal Service’s new delivery vehicles are rolling out on routes across the country. USPS said more than 35,000 of those vehicles are out on the road. That’s about a third of its new fleet. More than 100,000 vehicles will be deployed by 2028 and nearly half of them will be electric vehicles. Congress gave USPS $3 billion in 2022 to buy more electric vehicles than it could afford to buy on its own.
  (USPS is delivering its new fleet - USPS)
• The Trump administration is taking down yet another government program tailored toward early-career employees and talent development in the federal workforce. The Office of Personnel Management will soon sunset the Federal Academic Alliance. This is a governmentwide program that let federal employees access advanced degree opportunities at reduced tuition costs. The agency attributed its cancellation decision to a low participation rate, as well as more internal training options becoming available to employees over time. Employees currently in the program have until Jan. 19 to enroll into programs using the benefits through the end of their current academic term. OPM will shut the program website and other assets down by Jan. 30.
  (OPM sunsets ‘Academic Alliance’ - Office of Personnel Management)
• The Department of Health and Human Services faces a months-long backlog of reasonable accommodation requests from its employees. HHS said it will centralize the processing of reasonable accommodation requests on behalf of its component agencies. HHS said it’s taking on a backlog of more than 3,000 requests from the Centers for Disease Control and Prevention. It’s not clear how long it will take HHS to review each individual request. But the department said it will need about six to eight months to clear the backlog. A CDC memo said telework “should not be given as an interim accommodation,” while a reasonable accommodation request is under review.
  (HHS faces a months-long backlog of reasonable accommodation requests - Federal News Network)
• The Coast Guard is at risk of more cost overruns on one of its newest class of ships. That new warning comes from the Government Accountability Office, which said the service is pressing ahead with plans for its Offshore Patrol Cutter without a stable design. GAO said moving ahead with the second stage of the acquisition program too quickly could mean a repeat of some of the missteps the service suffered during the program’s first phase. In stage one, starting construction before designs were stabilized wound up leading to expensive rework.
  (Coast Guard risking cost overruns for Offshore Cutter - Government Accountability Office)
• The Defense Department is putting more than $400 million toward immediate barracks repairs. Defense Secretary Pete Hegseth said the department is also launching more than $800 million in critical barracks renovations. Hegseth recently stood up a “barracks task force,” which he said has completed wall-to-wall assessments of facilities across the Navy, Marine Corps, Air Force, Space Force and the 18th Airborne Corps, with Reserve and National Guard inspections expected to wrap up by the end of January. “In our first 30 days, we've purchased new furnishings and mattresses for 81 barracks, reaching more than 15,000 service members, and we've executed $101 million of quality of life improvements since October 27 that includes new door locks in 10 barracks, affecting over 6,000 war fighters, new security systems in 13 barracks, which is peace of mind for another 1,500 plus service members. I'm getting monthly reports to confirm the work is actually getting accomplished.”
  (DoD to invest $400 million in immediate barracks repairs - Defense Secretary Pete Hegseth on X)
• The Marine Corps is encouraging qualified Marines to move into counterintelligence and human intelligence roles. The Corps’ Manpower and Reserve Affairs has identified these positions as a critical specialty. The service said the demand for Marines in counterintelligence and human intelligence roles will remain high for the foreseeable future. Officials say Marines selected for these roles will receive extensive training and have opportunities to support Joint Forces and interagency partners. Marines who make the switch could earn over $100,000 in bonuses.
  (Marine Corps ramps up effort to fill counterintelligence, human intelligence roles - MARADMIN message)
• The Defense Department wants to shake up how it works with value-added resellers. The Pentagon is considering placing a 5% cap on most fees charged by resellers starting with a specific special item number, or SIN, for IT products. A draft memo obtained by Federal News Network said this cap would only apply to IT products bought through GSA's schedule contract. The initial focus of this reseller cap would focus on SIN 33411, which is for the purchasing of new electronic equipment, including desktops, laptops and servers. DoD said it spent about $2 billion in fiscal 2024 through the GSA schedule on these technology products.
  (Draft memo details DoD's plans to cap most reseller fees - Federal News Network)

 

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The Office of Personnel Management is anticipating a wave of retirement applications, stemming from the increasing number of federal employees who have opted into the Voluntary Early Retirement Authority (VERA) and the deferred resignation program (DRP). In a justification statement for a recent contract award to modernize its human resources systems, OPM referred to an “expected doubling of the retirement application backlog.”

With so many currently heading for the exit, it’s a good time for federal employees to improve their understanding of the retirement process, including separating facts from common misconceptions.

Misconception: Retirement pay begins right away

Fact: A retiree’s agency doesn’t send their retirement packet to OPM until the date of their retirement. At that point, OPM begins processing the retirement packet. OPM does have a processing backlog; it can take up to 90 days for them to begin.

Retirees can expect their first, estimated annuity payment within two to three months. OPM refers to this as “interim” pay: Usually, it’s about 60-80% of what your actual annuity will be.

Misconception: TSP is all you need after retirement

Fact: Federal employees will have three main sources of income in retirement: their pension, Social Security and their Thrift Savings Plan account.

When planning their budget for retirement, they can easily calculate how much the first two will provide each month. Their TSP will need to bridge the gap between that amount and the monthly cost of the lifestyle they intend to live during retirement. That’s why there’s no easy answer to how much feds should have in their TSP accounts when they retire. It differs for every person.

In addition, the TSP offers different ways to withdraw: partial, full, installment or annuity. It’s recommended that any federal employee within the retirement horizon transfer some or all of their TSP balance into an IRA or Roth IRA in the private sector. As long as they transfer the funds an IRA or Roth IRA, there are no taxes, penalties or fees.

Misconception: Federal Employee Health Benefits (FEHB) go away at retirement, or become more expensive.

Fact: Under certain eligibility requirements, federal employees can continue their FEHB coverage into retirement. These requirements include enrollment in FEHB for at least five consecutive years leading up to, and having coverage on, the retirement date. It is important to note that qualified spouses, dependent children, and children with disabilities can be covered without meeting this five-year rule. Employees become classified as annuitants upon retiring, at which point the government will continue to cover about 72% of the FEHB premium.

In addition, retirees can also enroll in Medicare parts A and B, offering nearly comprehensive coverage, with Medicare as the primary payer and FEHB as secondary. To reduce costs, some retirees opt for a basic FEHB plan.

Misconception: Federal Employee Group Life Insurance (FEGLI) will remain the same price after retirement

Fact: Basic FEGLI insurance costs between $10-$30 per pay period. It’s very inexpensive while employed, but the price increases dramatically in retirement. How much it increases in price depends on the plan; there are four FEGLI options, including Basic, Option A, Option B and Option C. Federal employees often don’t know what plan they have, or how much they’re paying for it. Understanding their plan can help prospective retirees maximize their FEGLI benefits in retirement.

Misconception: Survivor’s benefits are automatic and free

Fact: Federal employees will need to make some decisions about survivor’s benefits on their retirement application. The pension is the main place where retirees need to consider their options along with their potential beneficiaries — these will primarily be spouses, except in a few special circumstances. Each of these options comes with a cost, in the form of a monthly percentage deducted from the overall pension. The options and percentages vary between the Federal Employees Retirement System and the Civil Service Retirement System.

Misconception: Spouses will automatically continue to be covered by FEHB into retirement

Fact: This is the biggest caveat about survivor’s benefits: If survivors were on the federal retiree’s health insurance plan, that health insurance will cease if there is no survivor’s benefit. Any amount of survivor’s benefit will continue the health insurance plan, so prospective retirees and their spouses should speak with a federal retirement consultant, and consider the holistic picture of their assets, the spouse’s income, their needs and budget, life insurance, and whether they have any additional financial obligations, like debt or a child in college.

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Interview transcript:

 

Elizabeth Curda The disability exam process is an important component in the decisions that VA has to make about a veteran’s claim for disability. So for example, if a veteran was injured during their service in Iraq and they have ongoing hearing problems, but they don’t have medical records to substantiate that, they might be asked to do a medical disability exam to establish that they have that condition and it’s connected to their service.

Terry Gerton How much does the VA spend on this, and do they do it all in house?

Elizabeth Curda It’s a very costly program. It used to be done within the VHA hospital systems, Veterans Health Administration, but in recent years they have shifted most of the work to contractors. And VA spends about $5 billion, that was the expenditure in 2024, and the contractors do over 90% of all the disability exams.

Terry Gerton So as GAO got into this report, what motivated you to start it and what did you find?

Elizabeth Curda Well, we had a request from the chairman of the House VA Committee’s subcommittee on disability and memorial affairs, Chairman Luttrell, to look at the quality of these exams. When you have a contractor performing a function for the government, your toolbox in terms of keeping that contractor accountable — you have to be able to assure you have oversight over the quality of the work that they’re doing, in addition to things like timeliness. And so they wanted to know, what is VA doing to oversee the quality of these exams? We took a comprehensive look at all aspects of their oversight, and we found that overall they had a lot of processes in place for oversight in areas such as preventing errors, detecting errors that occur, and correcting them after the fact. So a lot going on, but we did find some areas for improvement and made recommendations.

Terry Gerton I can imagine that the distribution of contracted providers for this service is nationwide, so that oversight is especially critical in helping to ensure that a veteran in Indiana has a similar experience and quality as a veteran in Texas or California. What were the sorts of challenges that you discovered?

Elizabeth Curda Well, we made five recommendations that cut across three broad areas. And those broad areas were, as we found, breakdowns in some of their procedures for identifying and correcting the most frequent or complex issues with exams. We found issues with financial incentive payments that they make to the contractors. We found errors that resulted in overpayments. And we also saw a gap in an important source of feedback, which is the examiners themselves. VA gets feedback from all different parties: the contracting companies, the veterans, but they didn’t have any way to get direct feedback from examiners who are doing the day-to-day work.

Terry Gerton The part of VA that administers this is the Veterans Benefit Administration, not the health administration portion of VA, is that correct?

Elizabeth Curda Yes.

Terry Gerton And so VBA not only manages these exams but also the full disability determination requirement. They must be stretched pretty thin.

Elizabeth Curda That is correct. We have been reporting for years that they are in our high-risk list for managing their workloads. And that is basically the influx of claims and being able to handle those on a timely basis. So yes, they have been historically stretched pretty thin.

Terry Gerton I’m speaking with Elizabeth Curda. She’s a director in the education workforce and income security team at GAO. So Elizabeth, then tell us more about the recommendations that you made particularly.

Elizabeth Curda We made recommendations over two years. Our initial report on this was last September in a hearing, and we had a recommendation for a process that VBA conducts in which they feed to the contractors on a quarterly basis the most frequent errors. The contractors are required on a quarterly basis to write a report to VA on what they’re going to do to correct those errors. Now we found that VA did not have complete and effective practices for how to review these reports. So the quality review people would get these reports back from the contractors, and then everyone would write a little summary based on sort of what they thought they should be doing. But there wasn’t any procedure for, what should they be looking for in these reports? And the two things that we found that were missing were nobody checks to see if the contractors go back and actually do these actions. So there’s no checking to see if the contractors are fixing things. And there’s no effort to determine if those actions were effective or not. Are they seeing the errors go down? What’s the outcome of all this work? So that was one area.

Terry Gerton It sounds like that might be an opportunity to deploy AI. If you’re getting all of these reports in, maybe an AI reviewer could help streamline those and tell you about trends and where to follow up.

Elizabeth Curda Well that is another topic because that is very complex. And VA is really, I mean, we’ve discussed some of their efforts with AI and it’s really kind of at its very beginnings. But yes, potentially.

Terry Gerton And so what was the second recommendation?

Elizabeth Curda The second area also had to do with oversight of exams and it has to do with what they call “special focus reviews.” And these are three areas where they’re very complex and they tend to have a high error rate. It’s traumatic brain injury, military sexual trauma, and Gulf War illness. So they had a procedure to do these every two years. And they had done one round of the reviews, but they were late — over a year late — doing another round of reviews. And so we recommended that they basically do the second round of reviews on schedule. We subsequently, in the course of our work, learned that their staff have been cut by about 50% of the folks who were doing this particular function. And so they said in response to us that they will be switching to a three-year cycle, which in our view was, it’s better than no years. But we think the two-year cycle would be ultimately better because then you identify things that are working or not working and can take corrective action sooner. They also have begun negotiations on their new contracts for these contractors, which are long term, you know, they were multi-years, and things that they’re finding from these special focus reviews could be built into those contracts. But only if they’re done in a timely manner.

Terry Gerton Did you get any feedback from the providers themselves about how this process was working?

Elizabeth Curda We checked in with the people who do the disability exams, we call them the examiners, and we randomly selected examiners to talk to. And what we found is universally they felt they wanted opportunities to provide feedback about the exam process directly to VBA. Currently the process is, because they work for a contractor, all that feedback would go through the contractor up to VBA. And VBA basically told us, “we get all that feedback, the contractor gives us feedback.” But what we heard from the examiners is, you know, they don’t always feel they’re being listened to, they don’t always have their problems addressed, and they also sometimes get conflicting information if they work for more than one contractor. Different contractors will tell them to do things differently, and they don’t think that both can be right. But they have a hard time resolving these things themselves.

Terry Gerton So better communication, more checking. What else was on the list?

Elizabeth Curda The last area had to do with these financial incentive payments. The way VBA incentivizes good performance is they have these three areas: quality, timeliness, and customer satisfaction. And they measure, for each of the contractors, how well they do in those dimensions. And they feed that into a formula that will produce a bonus payment to contractors that score particularly well and penalties for those that are not meeting basic thresholds. And what we found was the way they calculate these is on a spreadsheet with a lot of manual data entry, and they were doing manual calculations as well. And there wasn’t a procedure in place to double-check the numbers, the data entry. They were doing some checking, but it wasn’t formalized. And so when we reviewed the numbers, we found that VBA had caught some of its errors on its own, but we found some that they hadn’t caught. And it was about $2.3 million worth of errors — bonuses that went out to contractors that did not earn them. And that really just sends … it’s the wrong message. You’re getting paid and you didn’t actually earn it.

Terry Gerton Exactly. How has VBA responded to your findings and recommendations?

Elizabeth Curda VBA agreed, or they use the term agree in principle when they sort of agreed, with all the recommendations. They actually have reported that they’re taking action on all of them, and some I think are very close to being implemented, such as the one on financial incentives. They told us there was a hearing on this last week, and they said that they actually have gotten the money back from the contractor and they are putting in place these new procedures. We just haven’t seen that documentation yet. But you know, when we do we’ll evaluate whether we can close that one or not. But all of them are sort of in the works, you know, in various stages of completion.

Terry Gerton So will you be following up with VBA to check how they’re doing?

Elizabeth Curda Oh, certainly. And we always follow up on our recommendations at least annually, but sometimes more than that, just depending on when they have updates for us.

The post The first step in a veteran’s disability claim can make or break the outcome first appeared on Federal News Network.

© Air Force/Senior Airman Karla Parra

Nearly two weeks after the record-long government shutdown ended, some Defense Department civilian employees say they have yet to receive the back pay they are owed. 

The federal government reopened on Nov. 13 after President Donald Trump signed a bill to fund the government through Jan. 30, ending the 43-day shutdown and allowing tens of thousands of DoD civilians to return to work.

At the time, the Office of Personnel Management said that checks for DoD civilians were slated to go out on Nov. 16. DoD civilians, however, were told to expect payment sometime between Nov. 17 and Nov. 20. 

But with Thanksgiving week now underway, many workers say they are still waiting for as much as four weeks of back pay.

One civilian employee at Laughlin Air Force Base in Texas, who was furloughed during the shutdown, told Federal News Network that more than 150 people in their unit of more than 400 civilians have not been paid.

“When everybody got back to work, we were told that the next week — or mid-week — we would get paid. And a lot of people did get paid, but a lot of us have not. They keep saying, ‘It’s going to take a few days,’” he said Wednesday. 

The Air Force employee said there has been no official guidance or clear communication, but their supervisor told them Wednesday to expect back pay on Nov. 29.

“There’s nothing in writing,” the employee said. “It’s all the leadership just walking around telling us, ‘Expect to get paid.’ There’s no email traffic — it’s just their own interpretation of when they think we’re going to get paid. But there’s been nothing official sent out.”

A DoD spokesperson told Federal News Network that all civilians whose updated time and attendance have been received have been paid.

“It is essential that civilian employees review their time and attendance reports, and their Leave and Earnings Statements (LES) for accuracy. Civilians with questions or civilian pay issues should contact their local Agency Customer Service Representative (CSR) or immediate supervisor. [The Defense Finance and Accounting Service] will continue to work with the military components to resolve any remaining payment issues,” the spokesperson said.

Another Air Force civilian in San Antonio, who worked through the shutdown, said many civilians in their unit of police officers are still waiting for back pay. 

“Nobody in leadership has put out any message other than when I inquired with my person who handles the payroll. She just said we should be getting paid on the 23rd or 24th, but that didn’t happen. Now, we are going into past Thanksgiving, who knows when it’s going to be,” the Air Force civilian told Federal News Network on Wednesday. 

He said he has been trying for weeks to get answers for himself and the employees he supervises. When he asked his own supervisor for help, he was told to consider filing a congressional complaint.

“That’s just laughable to me because we have a GS-13, we have a commander and active-duty commander. There’s a whole bunch of people between me and my congressman that could probably provide answers. But going to your supervisor hasn’t worked,” the Air Force employee said.

“I don’t understand why they can’t just put out a simple explanation, because communication really helps, whether it’s good or bad, but at least they could explain why or what the problem is, but they haven’t. It’s frustrating,” he added.

The bill that Congress passed to reopen the government reaffirmed that both furloughed and excepted federal employees would receive back pay. The Office of Personnel Management official guidance stated the agency “is committed to ensuring that retroactive pay is provided as soon as possible,” and that the retroactive pay for excepted employees “must be provided at the earliest date possible after the lapse ends.”

A defense official told Federal News Network last week that “DFAS is running continuous pay cycles to expeditiously pay civilians a one-time retroactive lump sum payment for pay periods missed during the government shutdown. Civilians and service members who have questions regarding their pay may contact their local finance office or chain of command.” 

The Department of the Air Force did not respond to questions about how many Air Force civilian employees are impacted, the cause of the delay or when civilians should expect back pay.

With pay stalled for weeks, many federal workers were forced to dip into savings, rely on credit cards, seek out no-interest loans or take on part-time work to make ends meet. Military families have been turning up at food banks in greater numbers — the Armed Services YMCA, for example, reported a 30% to 75% spike in demand at its food pantries near military installations since the shutdown began. 

“I’ve joked with my family and my kids that if I don’t get back pay, we might have to push Christmas til maybe January, but the impending loom of another shutdown at the end of January, it can’t get worse,” the Air Force employee from Laughlin Air Force Base said.

Defense Department civilians aren’t the only ones still waiting for their back pay. 

“Smithsonian still has not managed to get us paid. They are wasting time making sure everyone has the correct time codes rather than getting people paid. It’s more important to them that they take a couple weeks to record we were furloughed. Can’t pay the mortgage, but at least they’ll have the correct time code,” a federal employee told Federal News Network on Nov. 22.

At the Federal Aviation Administration, one air traffic control employee reported receiving only partial back pay through the end of November. 

Meanwhile, federal workers who have received back pay told Federal News Network they cannot verify whether the pay was accurate as they have not received an accompanying Leave and Earnings Statement.

“Not sure if it is accurate, as no LES are being created for the back pay,” one federal employee said.

“Without a LES, I have no idea. I just hope it’s right. It feels like it might be right, but I don’t know,” another employee told Federal News Network. 

Others reported major errors — an employee who received their back pay said it was “taxed so incorrectly that my first paycheck after returning was missing about $500 and only one of two missed health insurance payments were taken out.”

If you would like to contact this reporter about recent changes in the federal government, please email anastasia.obis@federalnewsnetwork.com or reach out on Signal at (301) 830-2747.

The post Some DoD civilians are still waiting for back pay weeks after shutdown’s end first appeared on Federal News Network.

© AP Photo/Charles Dharapak

D.C. National Guard members and their families lined up for free Thanksgiving meals at the D.C. Armory last week during an annual event hosted by Operation Homefront, a nonprofit that supports the military community. 

As part of their Holiday Meals for Military program, the organization provided families with all the fixings for a traditional Thanksgiving dinner — stuffing, cranberry sauce, mashed potatoes, pumpkin pie and more. Operation Homefront also distributed Harris Teeter gift cards so families could purchase their protein of choice, whether it’s turkey, ham or chicken. In total, the organization distributed 400 meal kits and grocery gift cards to pre-registered service members and military families. 

With grocery prices rising and many service members still feeling the financial strain of the recent shutdown, the organization says demand for assistance has surged — food requests alone are up 57% this year.

“Our case work is up — quadruple — what it was 30 days ago. Undoubtedly, the economic times are difficult for everyone in our country, I think that’s greater with the military,” Vivian Dietrich, Operation Homefront senior director, told Federal News Network. 

Operation Homefront, founded in 2002, serves military families nationwide by providing financial, emotional and social support through programs designed to keep households “strong, stable and secure,” Dietrich said. Financial assistance, however, is the backbone of the organization’s work, helping lower-ranking service members cover urgent expenses such as car repairs, rent and utility bills before these short-term problems spiral into long-term financial crises.

Through its Critical Financial Assistance program, Operation Homefront offers grants — not loans — and pays vendors on behalf of families. Caseworkers also review a family’s full financial situation to ensure they address the root of the problem.

“When we do our case work, often it’s somebody calling at the nth hour because the military is very proud. And generally, when they call, you’re at the point that you’re desperate, you need support, and our case workers are highly trained social workers. They spend time studying their finances. We work with them on how to manage their money and help them move forward,” Dietrich said. 

But food remains the organization’s top request for assistance, Dietrich said. 

Surveys conducted by organizations like Blue Star Families consistently find that food insecurity among active-duty families remains higher than the national average.

A number of factors contribute to military families’ financial vulnerability. Service members move dozens of times throughout their career, making it difficult for their spouses to find and maintain employment. Despite years of advocacy and policy efforts, the unemployment rate for active-duty military spouses has held stubbornly at around 22% for quite some time.  

Service members also face significant upfront costs when moving to a new base — military families spend an average of about $8,000 out of pocket during each move, which causes them to dip into their savings or accrue credit card debt.

During the recent government shutdown, military families were turning up at food banks in greater numbers — the Armed Services YMCA, for example, reported a 30% to 75% spike in demand at its food pantries near military installations. 

“Number one request for us is food — that has quadrupled right out of the top. But generally, it’s food, rent, maybe car payments, utilities — the day-to-day expenses that we all have. But it isn’t uncommon that there was some type of crisis that occurred that caused them to fall behind. A car would break down, or someone is sick and they had to miss work and they didn’t have pay. Or in the military, you can be deployed. You can be out on a training mission. And then if you have children, where’s the childcare?” Dietrich said.

“In general, it’s the basic expenses that we all live with, and if you don’t catch it at the very beginning, it really does become a crisis, and a crisis that can last for years. And our goal is to stay focused, get them strong, secure and stable,” she added.

Operation Homefront provides holiday meals for military families throughout the year, not just at Thanksgiving. 

The post Operation Homefront distributes holiday meals to Guard members as food requests surge first appeared on Federal News Network.

© U.S. Army National Guard photo by Sgt. Angelina Tran

Two lawmakers want to fully exempt military compensation from federal income tax — a move that would deliver a significant pay boost for service members and mark one of the most sweeping tax changes for the military community.

The legislation, dubbed the Service Members Tax Relief Act, seeks to eliminate federal income tax on all active-duty and reserve pay, including enlistment, retention and education bonuses and all special and incentive pays.

The measure would go well beyond previous tax-exemption proposals, which largely focus on bonuses or specialty pays.

In May, for example, a bipartisan group of lawmakers introduced the BONUS act, which would amend a section of the Internal Revenue Code of 1986 to explicitly exempt all military bonuses from federal income tax.

“The bill builds on existing tax exclusions for certain military benefits and responds to long-standing concerns raised by troops, families and advocates who believe those who serve should not be taxed on the bonuses they earn in service to our country,” Rep. Jen Kiggans (R-Va.), the sponsor of the BONUS act, said at the time.

Similarly, the No Tax on Bonuses Act, introduced in April, seeks to exclude service members’ enlistment and reenlistment bonuses from gross income.

Currently, service members deployed to combat zones receive tax-free income. In addition, most allowances that make up a significant portion of a service member’s total compensation, including basic allowance for housing and basic allowance for subsistence are tax-exempt.  Veterans’ disability compensation is also exempt from federal income taxes. Together, these exemptions amount to roughly $30 billion a year in foregone federal income tax revenue each year. 

Sen. Pete Ricketts (R-Neb.) and Rep. Abe Hamadeh (R-Ariz.), who introduced the Service Members Tax Relief act this week, are also sponsoring the Tax Cuts for Veterans Act of 2025, a measure that would amend Section 122 of the Internal Revenue Code to exclude all military retirement pay and veterans’ benefits from federal income taxes. This includes all retired and retainer pay under Titles 10 and 14, as well as all VA monthly benefits, including disability compensation and survivor payments covered under Titles 37 and 38. 

The two measures stand apart from prior proposals, as no recent bill has attempted a tax exemption of this scope.

“It is pretty sweeping… and it’s potentially a very expensive proposal. Now, there’s a reason why Congress has, on a bipartisan basis, provided these existing tax exclusions for military and veterans benefits — there’s a wide bipartisan appreciation for the fact that if you served our country, put your life and put your body on the line — you’re receiving benefits that you deserve for that service…I think any proposal that costs tens of billions of dollars per year, Congress is going to scrutinize,” Andrew Lautz, director of tax policy at the Bipartisan Policy Center, told Federal News Network.

It is unclear what strategy the sponsors plan to pursue — standalone bills often face political hurdles, and lawmakers frequently try to attach such proposals to larger legislative packages like the annual National Defense Authorization Act to increase their chances. 

“These bills are fiscally conservative in that they offer relief through the tax code instead of new spending. It is a win-win; the exemption instantly improves take-home pay, while helping with recruitment and retention, which in turn keeps our war fighters strong,” Hamadeh said.

Lautz pushed back on the idea that the bills are “fiscally conservative,” arguing that a dollar of a tax cut that isn’t offset adds to the deficit just as much as a dollar of new spending that isn’t paid for.

“If you’ve got $100 billion spending program or the $100 billion tax cut, and you’re not paying for that — that is not fiscally responsible. Now, Republican lawmakers have shown a preference for cutting taxes over increasing government spending, and Democrats vice versa, that is an unmistakable trend. But in terms of the fiscally responsible approach here, I think the message we’ve sent to both parties is that if you’re going to have a large tax cut or you’re going to have a large spending increase, you should pay for it with offsetting either spending cuts or tax increases,” Lautz said.

While the proposal would eliminate federal income taxes on military pay, active-duty and reserve personnel would still be paying payroll taxes on their income.

The post New bill seeks to exempt military pay from federal income tax first appeared on Federal News Network.

© The Associated Press

Interview transcript

Eric White We’re talking about the new [Online Retirement Application (ORA)] system, or I guess, is it “Or-uh” system? I’ll let you … Correct my pronunciation for federal retirees. Obviously, that system is going to get used a lot over the next coming months, if what has been happening recently is any sign of what’s to come. Tell me about what’s going on with this system and what feds are saying — of the ones that have been using it — about it.

Thiago Glieger Yeah, Eric, this new system — so we call it O-R-A; I think that’s how most people are calling it, as you said — this is a brand new system. And honestly, it’s been confusing a lot of people … it’s replacing the old paperwork that a lot federal employees had to fill out — really the SF-3107 — as they were going to retire from their agencies. But I think the big problem here, Eric, is they’re finding that a lot of the HR departments are just simply overwhelmed … We had a lot of people [who] were leaving, we have bottlenecking of a lot people that are leaving on [the] [deferred resignation program (DRP)] as well, and so they just can’t provide the kind of support that they used to before. So a lot of these questions start to pile up. It’s a brand new system and there’s not enough people in place to help answer those questions. Retirement is already a pretty stressful process for people, right? So then on top of that, not having a clear process or information about a new system only adds to the anxiety … When it was first launched everyone hoped that OPM was going to say, this is going to be faster, it’s going to be smoother, it’s going to require less people. And OPM actually said the opposite. They said, at first, it might actually take longer … They are very hopeful that over time this is gonna be a good system but right now there [are] a lot of moving parts that have to come together for all of that efficiency to really start showing up. And as you guys have seen, Eric, there’s tens of thousands of federal employees retiring. We just had the first wave here on 9/30. We’re gonna have another wave here 12/31. And so it’s really, really tough for people to get answers to the system.

Eric White Yeah, sort of a “ready, fire, aim” approach that we love here in the USA. Walk us through what a federal employee should expect when they decide to retire under this new system. What are some of the major changes from the old system? Not that anybody retires more than once, hopefully, but you know, what exactly are they looking at from a landscape perspective?

Thiago Glieger Yeah, so what it used to be is that a lot of agencies would run the [Government Retirement and Benefits (GRB)] platform retirement estimator for federal employees retiring. And the GRB platform was effectively a repository of your federal service, and it would give you information on what retirement could look like, estimates of your pension, things like that. So then we run into problem number one: a lot agencies cut GRB. So now federal employees are saying, well, what does my retirement estimate look like? How many credible years do I have? That system is no longer there. So then agencies are not even able to provide that information. But presuming you’re still gonna move forward with the actual retirement process, [the] first step is you have to notify your HR office that you’re ready to retire. You can send them an email, generally, and say, I believe I’m eligible; I’d like to start the retirement process. And this is because the HR group has to initiate the ORA system in most cases. Every agency has a little bit of a different process, but this is what the majority of the groups are doing … You have to remember what’s different here is now HR is swamped. There’s tons of people retiring. There’s less of them around to be able to do this, which is causing some of the bottleneck. Once HR begins the ORA process, you’re given access to it. And again, this is gonna replace the SF-3107, which is the retirement form. And so now it’s actually easier because instead of filling out a government form, you’re just going through a system online and it’s asking you questions one by one. Everyone has filled out those kinds of forms before. So it’s actually pretty easy, as we’ve seen with some of our clients. And what it does is it takes your answers and pre-fills the form for you, which is a nice service. Once you submit that part, it’s really important that a federal employee stay alert because a lot of times, HR — they may kick it back if they need additional information — there’s something that’s missing, so you have to check to make sure you don’t need to do additional work on the ORA system for that. That’s when it moves to payroll. Once it moves to payroll, they finalize all of your hours, which can take a month to a month and a half just at payroll itself, before it goes to OPM. So if you think about it, we’re talking a month at payroll, [that] could be a month before HR actually gets around to being able to initiate the system for you. We’re At 2 months so far. Once it hits OPM, that’s when the official clock starts, as OPM likes to describe it. And there’s some uncharted waters here because OPM has not really handled, A, this new system before, and B, this many federal employees retiring all at the same time. So they release information — there is some congressional report that gets put out there that talks about how many applications are coming into the system and what is the average processing time month over month. We’ve been seeing that go up and up and up over the last three months. I expect it’s going to continue to get worse, right? So we’re talking three months at the agency level plus … whatever time OPM is going to need for themselves.

Eric White We’re talking with financial planner Thiago Glieger. So, other than those long timelines — well, we can call them unknown timelines, as you say — what are some of the other issues that federal employees are seeing so far with the system? It sounds like it is going through some growing pains, but are there any fundamental flaws with it that people are just not liking?

Thiago Glieger I think some of the challenging questions that the system asks them are things like, how much withholding do you want to do on your taxes? Or, what do you wanna do about life insurance? And before there was some guidance in the forms [about] how to be thinking about some of these things. The system is a little bit more streamlined and it just asks you the question. Well, if you haven’t gone through the process of creating a financial plan, how do you know how much insurance do you need? What kind of tax liability are you expected to have? So federal retirees are called upon to make these decisions in real time as they’re filling out the form and they don’t really have the information to be able to answer those questions. Okay, the other issue that we are running into, and this one hasn’t been too much, is that sometimes people don’t get the notification of additional action that they need. Sometimes it gets stuck in their spam email. So this is something that, again, it’s those bumps that they’re trying to pull together. There are a lot of systems in the background that have to coordinate with each other and, as any brand new system that gets launched, there’s always stuff that’s going to break. So I’m sure some of that’s gonna be a problem too.

Eric White Gotcha. All right. And so what can folks do if they are looking to retire? You’re a financial planner. I guess we’re talking to the right person. How can they financially prepare for any delays that might occur because … some of those dates don’t line up and you don’t want to be caught in-between paychecks, as they say, and without anything coming in? What sort of precautions can those looking to retire take?

Thiago Glieger Yeah, that’s a really good point, Eric. I think the first thing that federal retirees should remember is that you will get your annual leave lump sum. Okay, so that comes pretty quickly in our experience with clients, right after you leave. So you get your final paycheck and then shortly thereafter you get your lump sum, so depending on how many hours you have, you’re gonna get a big check that’s gonna help you to meet your expenses between when you leave and no longer have an income and when the pension actually fully starts. There [is] also, in most cases, an interim payment, where it’s a portion of your final pension; not the exact amount. But again, we don’t wanna count on that because there’s cases where people don’t get it. So the biggest thing is that, let’s say you’re planning to retire December 31st, now is the time to start boosting your cash reserves. So what do I mean by that? Cash in the bank is gonna be really important here. So … This might mean, and it sounds a little counterintuitive, but might mean maybe don’t put as much in the Thrift Savings Plan for the rest of the year, if you know you’re gonna retire, okay? Yes, you have access to the TSP if you are retiring within a certain age, the age is 55 for most people, but cash in the bank is that much easier to access … it’s already been taxed in most cases. So if you reduce your TSP contribution, that means your take-home pay goes up and you get to start accumulating that cash. I would also think about what kind of expenses maybe you have coming up, right? The general guide for people is we like around six months-worth of your monthly expenses in cash in the bank at all times. And because we might be looking at delays on your pension starting, you might wanna increase that a little bit more. So if you’ve got big renovations you were planning to do on the home, maybe postpone that for a little but until you get greater clarity around OPM’s timeline for the stuff. And the last one — and this one’s a little bit controversial as well, but it depends on how old you are — if you leave prior to the age of 55, which a lot of people have done this year, you technically don’t have access to the TSP funds un-penalized, unless you are law enforcement or special provisions, 1811s, things like that. So what you can look at is a potential TSP loan. You can get up to $50,000 and that comes without that 10% early withdrawal penalty, which is kind of nice because you can put that in your bank account, use it or don’t use it, but at least it creates extra cashflow for you. Of course, check with your financial professionals, make sure that this is something that is feasible within your plan, but that’s been a really solid one to help bridge people over.

Eric White Uncertainty is the word of the day for a lot of federal employees, particularly those that are retiring, even so. Any advice on handling that aspect of things? You’re already going through the anguish of entering into a new stage of your life, having all of this in the background of shutdowns and potential furloughs and things of that nature. What can you tell people that are going through this right now?

Thiago Glieger I would say for folks to rely on your planning. This is something that creates great peace of mind, just knowing what you’re gonna do in which scenario. So if this happens, if it takes longer, if the markets crash in the middle of your waiting for your pension, all of these things, if you can think ahead of what those potential problems may be and what you are gonna do if those things happen or what you gonna do in preparation to hedge some of those risks, that gives you great peace mind. We have to be careful about watching the economy and the news around the markets. The markets are very volatile and you always have different opinions and people talking about what the markets are gonna do next. We have to careful cause that creates a lot of anxiety for retirement. And I think too, the more information you have, the better. OPM has a really, really helpful retirement quick guide, which we can give you guys the link [to] … You can put it in the show notes. The OPM retirement quick guide is super helpful, [it] walks you through the process so you know what to expect. And in fact, there is one additional resource that is actually your benefits officer directory. This is something that OPM maintains pretty regularly and it’s the HR person in charge at your office. In case the process is just stuck and if you can’t get answers, you can get anywhere, this is a place you can look for to find out who’s in charge of your agency to get the answers you need.

The post When paychecks stop and tax season looms, what moves should federal employees make? first appeared on Federal News Network.

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• Federal employees will be able to contribute more to their Thrift Savings Plan accounts next year. The IRS increased the maximum annual contribution limit to $24,500, which is a $1,000 increase over 2025. Additionally, employees aged 50 or older can save more money through their catch-up contributions. And if employees are aged 60 to 63, they can save even more with a higher catch up contribution of $11,250.
  (IRS increases annual TSP savings limit for 2026 - IRS)
• A new bill would put a hold on some 8(a) contract awards. Sen. Joni Ernst (R-Iowa) wants to stop all no-bid awards under the 8(a) Small Business Program until the Small Business Administration completes a detailed audit. The chairwoman of the Committee on Small Business and Entrepreneurship's Stop 8(a) Contracting Fraud Act would put any new sole source 8(a) contracts on hold until the report is submitted to the committee in 2026. Ernst said the 8(a) program is broken and needs to be reformed. The bill comes after two high-profile examples of 8(a) contractors allegedly committing fraud. Agencies make more than 5,700 8(a) sole source awards a year.
  (Sen. Ernst wants to put freeze on 8(a) sole source awards - Sen. Joni Ernst (R-Iowa))
• Veterans Affairs said service members forced out of the military for refusing a COVID vaccine are once again eligible for GI Bill education benefits. More than 8,000 service members refused to comply with the Biden-era vaccine mandate and separated from the military. More than half of them received a less-than-honorable discharge. That may have made them ineligible for GI Bill benefits. The VA said nearly 900 veterans are once again eligible for those benefits under the Trump administration, and that thousands more could regain eligibility.
  (Trump EO reinstates GI Bill benefits to Veterans discharged for refusing COVID vaccine - Department of Veterans Affairs)
• A majority of House lawmakers want a vote on a bill to end the Trump administration’s rollback of collective bargaining for federal employees. A bipartisan bloc of 218 House lawmakers signed onto a discharge petition forcing the House to vote on the Protect America’s Workforce Act. The bill would restore collective bargaining rights for tens of thousands of federal employees, if approved by Congress. Rep. Mike Lawler (R-N.Y.) was the most recent lawmaker to back the bill. President Donald Trump signed an executive order in March that barred unions from bargaining on behalf of federal employees at many agencies, on the grounds that those agencies work primarily in national security.
  (House majority forces vote on bill to restore collective bargaining for most federal employees - Federal News Network)
• The acting chief of the Federal Emergency Management Agency resigned on Monday. David Richardson stepped down from performing the duties of the FEMA administrator after six months on the job. Richardson’s tenure was marked by major staff departures and program cuts. He also faced criticism over FEMA’s response to deadly floods in Texas over the summer. FEMA Chief of Staff Karen Evans will take on the duties of FEMA administrator starting December 1st.
  (FEMA acting chief David Richardson departs after six months on the job - Associated Press)
• The Federal Communications Commission is moving to reverse some recently issued cybersecurity requirements. The FCC will vote on Thursday to rescind cybersecurity rules for telecommunications providers. Those rules were put in place late in the Biden administration in response to the sweeping Salt Typhoon hacks that infiltrated telecom networks across the world. U.S. officials have attributed that campaign to Chinese government-backed hackers. But the current FCC leaders said the rules were unlawful and ineffective from a cyber standpoint. They point to cyber improvements that telecom providers say they have made on a voluntary basis.
  (FCC to vote on reversing cyber rules adopted after Salt Typhoon hack - Federal News Network)
• The Defense Department is failing to address the security risks created by the massive amount of publicly accessible digital information about its personnel and operations. The Government Accountability Office found that digital activity from personal and government devices, online communications and defense platforms generate traceable data, which puts DoD personnel, their families, operations and national security at risk. GAO said the department needs to conduct a comprehensive review of its security policies and guidance to identify gaps in how it manages risks in the digital environment.
  (Massive digital footprints put troops, missions at risk, watchdog finds - Government Accountability Office)
• The Defense Department has released a new list of critical technology areas. Undersecretary of Defense for Research and Engineering Emil Michael has reduced the number of research-and-development priorities to six areas of focus. The list includes artificial intelligence, contested logistics technologies and scaled hypersonics. “When I stepped into this role, our office had identified 14 critical technology areas; while each of these areas holds value, such a broad list dilutes focus and fails to highlight the most urgent needs of the war fighter. Fourteen priorities in truth means no priorities at all,” Emil Michael said.
  (DoD narrows down list of critical technology areas - LinkedIn)

The post IRS increases annual TSP maximum contribution first appeared on Federal News Network.

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The longest partial shutdown in U.S. history has officially ended after President Donald Trump signed a bill last week to fund most of the government through Jan. 30 and give other agencies full-year funding. Federal agencies are starting to reopen, but many federal workers — who haven’t been paid in over a month — are still waiting for their back pay. It is also unclear how quickly operations will return to normal or what the long-term impacts will be on missions and agency readiness. And another partial shutdown threat is already looming.

If you are dealing with challenges related to this shutdown — financial, personal or work-related — we want to hear from you. Please take a few minutes to fill out our survey. All answers will be kept anonymous. The survey results will be used for an upcoming story.

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If you would like to contact this reporter about recent changes in the federal government, please email anastasia.obis@federalnewsnetwork.com or reach out on Signal at (301) 830-2747.

The post Survey: What has it been like going back to work after the shutdown? first appeared on Federal News Network.

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• A federal union is suing the Trump administration for not handing over a list of employees that agencies might be targeting to remove their job protections. The new lawsuit from the National Treasury Employees Union alleges that the Office of Personnel Management violated the Freedom of Information Act by not providing those details. The union’s legal action comes after the Trump administration earlier this year revived an effort to make large portions of the federal workforce at-will and easier to fire.
  (Lawsuit alleging FOIA violation by OPM - National Treasury Employees Union)
• The Department of Homeland Security is giving bonuses to Transportation Security Administration employees who worked through the partial shutdown. More than 270 Transportation Security Officers at Logan airport in Boston are among the first TSA employees to receive a bonus from DHS for working without pay during the 43-day shutdown. DHS Secretary Kristi Noem awarded these TSOs a $10,000 bonus on Saturday in appreciation for their dedication and commitment over the last seven weeks. DHS said it is paying for these bonuses using carryover funds from fiscal 2025. Noem announced the administration's plan to give these bonuses on Friday.
  (270 TSOs receive $10,000 bonus for working during shutdown - Department of Homeland Security)
• About 4,000 federal employees who were previously told they were going to be laid off should be receiving a cancellation notice by the end of the day. The spending agreement Congress passed last week gave agencies five days to rescind all reductions-in-force that were announced during the shutdown. OPM said the cancellation notices to employees need to include how much back pay the workers will receive. The employees are owed payments equal to what they would have been paid, had they not been laid off in the first place.
  (RIF actions affected by continuing appropriations - Office of Personnel Management)
• Defense Secretary Pete Hegseth’s acquisition system reforms could meaningfully reshape how the Pentagon does business, only if the department can avoid the mistakes of the past. Acquisition experts say the reforms could help to break down entrenched silos across the department’s acquisition enterprise and drive greater coordination and integration. But the success of Hegseth’s reforms will hinge on whether the department can change its culture and equip the workforce with the skills needed to operate differently. Otherwise, the system can quickly revert to its old ways. And whether the department has the workforce to support such a sweeping overhaul is unclear. DoD has already lost 5% to 8% of its civilian workforce since the start of the Trump administration.
  (DoD acquisition reform: What will it take to make it last? - Federal News Network)
• SAIC continues its bloodletting, just three weeks after moving on from its CEO. The federal contractor parted ways with three more executives and consolidated business groups. The company said Josh Jackson, its executive vice president for the Army, David Ray, its space and intelligence EVP, and chief innovation officer Lauren Knausenberger will pursue other opportunities outside of the company. Additionally, SAIC will merge its Army and Navy business groups into one and bring its Air Force and Combatant Commands, and the Space and Intelligence business groups together to become the Air Force, Space and Intelligence Business Group.
  (3 more SAIC executives to leave the company - SAIC)
• Agencies are being reminded to patch unsecure devices that are being targeted by hackers. The Cybersecurity and Infrastructure Security Agency said some federal agencies haven’t fully patched vulnerable Cisco devices. CISA directed agencies to update that software back in a September emergency directive. But in new guidance last week, CISA said it’s aware of multiple organizations that haven’t updated to the minimum software version. The cyber agency warned that the vulnerable Cisco device software poses a significant risk to all organizations.
  (Updated implementation guidance for emergency directive on Cisco - Cybersecurity and Infrastructure Security Agency)
• The Department of Homeland Security is facing calls to release an unclassified report on security flaws in U.S. telecommunications networks. Sens. Ron Wyden (D-Ore.) and Mark Warner (D-Va.) wrote Homeland Security Secretary Kristi Noem and Director of National Intelligence Tulsi Gabbard, urging them to publish the report from 2022. They say not publishing it undermines the public debate over how to best secure U.S. telecom networks. The lawmakers point to the recent "Salt Typhoon" campaign, in which suspected China-backed hackers successfully broke into American telecom systems and devices.
  (Wyden, Warner telecoms security letter - Sen. Ron Wyden (D-Ore.) )
• The Department of the Navy’s new Innovation Adoption Kit lays out a unified framework for evaluating, implementing and scaling innovative technologies across the naval enterprise. The memo is designed to help commanders and program managers bridge the gap between emerging commercial solutions and mission-ready capabilities. It offers practical methods to accelerate the transition from pilot to program of record and tailor agile approaches to fit within the Navy’s operational and acquisition constraints. Officials say these tactics can be applied across a wide range of missions.
  (Navy unveils toolkit to speed adoption of emerging technologies - DON CIO)

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Interview transcript:

Terry Gerton: You’ve seen many shutdowns in your long career. Here we are a couple of days into restart. Let’s start with some of the impacts on people as agencies get up and running. Some people got maybe their first back paychecks over the weekend. Others will be seeing them promised early this week, but they’re not going to be complete. What should agencies and people be thinking about as we go through the logistics of making folks whole in back pay?

Bill Hoagland: Well, I think it’s important for the HR departments of the various agencies, they’re going to have a lot of work on their hands to make sure that they get the pay back, get everybody back up to where they were. And as you say, Terry, I think hopefully most of them had received the pay that they were due over the weekend because the law that was adopted said as quickly and as soon as this has become law, you’re to get the back pay. So all I can say is that the HR departments will be working very hard to make sure that happens. And then, of course, they’re going to be faced with the next payday. So there’s going to be a lot of work for the HR departments here. And when they come back, get fully staffed too.

Terry Gerton: And it’s really kind of complicated to compute that back pay, so folks who were affected need to make sure that they’re checking their own paychecks, right?

Bill Hoagland: Absolutely. I think that’s a very important point, Terry. I think that absolutely they need to check to make sure that because there could be some glitches in this, given the way this has to go fast. HR departments are supposed to move fast to get the payback. So you’re right, there could be some mistakes and so the federal worker needs to make sure and check what their previous paychecks were against what they’re getting to make sure they are getting what they have been promised.

Terry Gerton: When you talk about workload for the HR teams, many of them are much smaller than they were because a lot of HR folks have been downsized or took the DRP, but there’s a piece in this law that’s really important. It says reverse the RIFs that happened during shutdown. How is that going to play out?

Bill Hoagland: Well, since we’ve never had this happen before in a shutdown, this is going to be new. And therefore, again, we’re going to have some new complications here for the HR departments to figure this out. My hope is that it’s a simple flipping of the switch, so to speak. I hope that the HR department, they know who they RIFed. They simply have to turn that off and, of course, notify the people that they are still fully employed.

Terry Gerton: And one more thing in the HR space is the processing of a retirement backlog. Sept. 30, the day before the shutdown, was the deadline for the deferred resignation program. HR teams could come back to find stacks of retirement processing on their desks.

Bill Hoagland: Absolutely, as you’ve outlined it here and we discussed, there is going to be a lot of activity for the HR departments and how they prioritize what to address first. I think they will have to address quickly the pay issue. They will have quickly address the RIFs issue. And then I would assume that in terms of the retirement programs and people that have put in for retirement or were going to retire. That may take a backseat a little bit to those other priorities the HR department will be facing during that period of time.

Terry Gerton: Well, I started with people because they are the foundation of everything that’s going to happen in the federal government. But now put yourself in the position of one of the department or agency leaders. You’ve just got your organization started back up. What are your operational priorities? What do you think about getting back up to speed first?

Bill Hoagland: Well, I think if I was running an agency, first of all, it would depend upon the agency. Let’s be clear. Some of the agencies, such as Department of Agriculture, the Military Construction Accounts, those are full-year funded now. They will be basically going back to their full-year plans in terms of implementation. It’s for those other agencies, those other nine appropriation bills that are just operational now until the end of January, they’re going to have to look very carefully. They have received, as I understand on the day before the shutdown, there was a memorandum that was put out by Russ Vought at OMB that laid out the appropriation apportionment process. And so those agencies are going to look very carefully at that directive, that OMB memo, in terms of the implementation of their accounts and moving forward. But in terms of agency priorities, I think the first most important thing again is to make sure that those individuals that had been RIFed are put back onto the payroll quickly and working with individual programs. The problem here is for the agencies that are only receiving a continuing resolution to the end of January is planning. If they had planned new programs, new activities, technically, they’re on hold again. And so they’ll have to go back to, just as the term implies, just a continuation of their activities that were in place at the end of the last fiscal year.

Terry Gerton: I’m speaking with Bill Hoagland. He’s a senior vice president at the Bipartisan Policy Center. Well, Bill, speaking of continuing, what about the impact on contracts and contractors? I mean, there was so much disruption leading up to the end of the fiscal year, and then they went into a shutdown. If you’re still under a CR, how do you get your contracts and contractors back up and running?

Bill Hoagland: Terry, that’s a question I probably had better avoid trying to answer exactly because I think there’s some legal questions here. Technically, first of all, the contractors, many of them did not get paid, and the question whether they will get paid. They’re not federal workers, they’re on contract. And so I think as you’ve outlined it here, there’s going to be some issues associated without those contractors. Reestablish their relationship with the agency, the agency heads, do they have to enter into new contracts? That would be terrible. I would assume that a continuing resolution would allow those contractors. I hope the contracts were written in such a way that they automatically come back into play. But again, that will depend upon the way the contracts were entered into prior to the shutdown.

Terry Gerton: Does a continuing resolution provide that agencies can make penalty payments if they’re overdue in settling some of these invoices?

Bill Hoagland: I think the answer there again, Terry, is dependent upon the way the contracts were written at the time that the agency entered into it. I think it will depend. That’s the best answer I could give to that question.

Terry Gerton: Thank you. Well, we’ve been talking here about federal agencies, but Congress has got to get back to work, too. The House, at least, has been away for a while. What’s the backlog looking like as Congress tries to get itself restarted?

Bill Hoagland: Well, this is going to be a difficult period between now and through the end of January with the holiday season coming up, a Thanksgiving recess, the traditional recesses around the first of the year with the holiday season there. There’s not a lot of time. Congress does have, at least the Appropriation Committee chairwomen in the Senate, plan very strongly to try to get as many of the regular appropriation bills done as possible. And so we can expect another packaging of some of the many appropriation packages in terms of putting maybe Defense and Health and Human Services into one package and try to get that through. I do know that the hope is next week that the Senate does want to put a package together that includes Defense, Homeland Security, I think, as well as Health and Human Services. So those are big bills and so the pressure will be mounting here. But to your point, it’s not a lot of time here. And the bigger the bill, the more controversy the bill.

Terry Gerton: The more ornaments on that Christmas tree.

Bill Hoagland: That’s true. And so as a consequence, I’m gloom and doom are a little bit on this. I’m sorry to it. I don’t want to just coming off this the longest shutdown in our history. There’s a real chance a real probability that we’ll have another have to have another continuing resolution come the end of January, simply because of the backlog. And of course, there are other things defense reauthorization bill is up, trying to get that done. So Congress has got, because of the first of all, because the House has been out, we also have the Jeffrey Epstein issue coming up, which is going to cause some problems in terms of delays further. It’s going to be a full agenda between now and the end of January, which, as I say, has, unfortunately, likely a probability of another continuing resolution.

Terry Gerton: Bill, you’ve given us a hard reality pill there, but if you could make some recommendations about reforms that might help us avoid shutdowns in the future or maybe get appropriations out on time, what would you say is at the top of that list?

Bill Hoagland: Well, as a former Senate Budget Committee staff director for many years, the first thing is just to pass a budget and pass it on time. As you know, we really didn’t get a budget from the president for the fiscal year that we’re in. We had a mini kind of budget around for the Appropriation Committee, but we never got a budget. And so Congress has not adopted a budget. In fact, over the 50-year history of the Budget Act, I think about 13 or 14 times, we’ve not got budget resolutions put in place in time. So the first thing is, just basics, is get a budget put together and meet that time frame early. If you’re following the schedule, you would have your budget put in place by April the 15th, tax filing day, before the beginning of the upcoming fiscal year. That would give time for the appropriators to move and get their individual appropriation bills done. So that’s just basic. No. 2, while you’re not always going to make it. Even with a budget resolution on time, as we know. And therefore, I would also argue that maybe an automatic continuing resolution, something that I’ve argued for many years. Nobody wins in shutdowns, I’m sorry. It’s not Republican, it’s not Democrat, not the president, the American public lose. And so my argument would be, have an automatic CR. Don’t go through the shutdown aspect, but just automatically continuation of appropriations and if you want to put pressure on maybe you, after so many days on that continuing resolution, automatic continuing resolution, knock down the appropriations by a percentage point or two to keep the pressure on them to get it done. And then finally longer term, I’m a strong believer in biannual budgeting as opposed to annual budgeting, which would be another approach, would you end up after two years also end up with, maybe, but at least you’d have more time to work out your budget and your appropriations over a two-year period.

The post What is the impact of a shutdown and what does it really take to reopen the federal government? first appeared on Federal News Network.

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IRS employees are getting mixed signals on when they should expect to receive their back pay, now that the longest government shutdown is over.

About 34,000 previously furloughed IRS employees were told earlier Friday that they would have to wait until early December to receive all of the back pay they are owed. But they’re now being told that they will receive the “majority of their back pay” by Nov. 19, which is the latest that federal employees will receive back pay.

“After ongoing conversations with the National Finance Center, the IRS now anticipates the majority of back pay will be paid on 11/19/2025,” the IRS told employees in an email obtained by Federal News Network.

In an earlier memo, IRS employees were told they would receive back pay covering two full pay periods on Nov. 24, and would receive back pay for a partial pay period on Dec. 8. That’s a later timeline than what the Trump administration provided earlier this week. The IRS, however, says these internal communications are no longer accurate.

Nearly all other federal employees will receive their back pay no later than Nov. 19. A senior administration official told Federal News Network on Thursday that all employees at the Treasury Department, as well as several other agencies, would receive their back pay on Nov. 19.

Employees at some agencies will receive their back pay as soon as this weekend, while others will get their back pay next week.

Doreen Greenwald, president of the National Treasury Employees Union, told reporters in a call Friday that the IRS “was able to get people paid much faster” after the January 2019 shutdown, which lasted for 35 days, and called the delayed timeline “entirely unacceptable.”

“To find out that there isn’t an urgency to get these employees paid is really just outrageous,” Greenwald said.

“They’re showing up to work, but they’re still not getting paid. And they are still waiting a long time to see when they’re going to get paid,” she added.

The IRS told Federal News Network, following NTEU’s call with reporters, that it had tested its systems, and expects that all employees will receive their full back pay by Nov. 24.

The IRS isn’t the only agency updating its back pay schedule. According to Greenwald, the Interior Department told its employees that they will receive 50% of their back pay on Nov. 17 and the rest on Nov. 25.

A senior administration official previously told Federal News Network that Interior Department employees would receive a “supercheck” on Nov. 17 that would cover all days between Oct. 1 and Nov. 1. Federal News Network has reached out to the Interior Department for comment.

“We’re really asking the federal government to live up to the November 19th deadline and really respect employees and the urgency of their needs and to get this pay issued as soon as possible, but no later than Nov. 19,” Greenwald said.

The Office of Personnel Management, in its latest guidance, said it “is committed to ensuring that retroactive pay is provided as soon as possible.”

The spending deal passed by Congress on Wednesday evening ensures back pay for furloughed and excepted federal employees.

A 2019 law previously called for retroactive compensation for all federal employees impacted by a shutdown. But during the shutdown, White House’s Office of Management and Budget floated the idea that back pay wasn’t guaranteed for furloughed employees.

Mike Radock, the acting director of the IRS Office of Human Resources Operations, told staff in an email obtained by Federal News Network that the agency’s payroll and employee services divisions “are working collaboratively to ensure employees receive pay and backpay.”

“Periods like this can bring challenges and uncertainty, and I want to thank you for staying connected and supporting one another. The work you do is essential, and I’m eager to move forward together as we resume normal operations,” Radock wrote.

Greenwald said the back pay schedule puts a strain on furloughed IRS employees, who missed two full paychecks and received one partial paycheck. Meanwhile, IRS staff are dealing with a significant backlog of work that has piled up during the 43-day shutdown.

“They’re coming back to their workplaces with inventory that has backed up, with messages on their phones, with emails they couldn’t answer, all the things that they weren’t allowed to do during a furlough. So they’re already set behind because the work has piled up during this time,” she said. “Let’s respect them enough to get them their back pay, so they can start to get their lives back on track and get moving forward.”

The post After mixed messages on back pay, IRS says staff will get ‘majority’ by Nov. 19 first appeared on Federal News Network.

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It’s commonly cited that just about 5% of participants in the Federal Employees Health Benefits program change their plan during Open Season each year — so it may not be surprising to learn that many FEHB participants who take advantage of Open Season also tend to wait until the last minute to do so.

But during Federal News Network’s 2026 Open Season Exchange, Holly Schumann, principal deputy associate director for health care and insurance at the Office of Personnel Management, urged participants to get started on their research sooner rather than later.

“We do typically see a big surge of traffic on the last few days of Open Season, but I really encourage folks to take action earlier,” Schumann said. “Take the time to study all of the information. And that’s much easier to do if you’re not waiting until the last minute and feeling pressure to make a decision.”

Tips on how to research federal health insurance options

Schumann also gave some advice for where participants can get started on their studying. She recommended going first to OPM’s website. There, participants can find a plan comparison tool, as well as deeply detailed plan information across all health insurance carriers.

The plan brochures from FEHB carriers — as well as those in the Postal Service Health Benefits program — cover benefits changes for 2026, details on Medicare for each plan option, what the premium rates will look like beginning in January and much more.

“We don’t want anybody to be caught surprised by a change in their plan that they weren’t aware of,” Schumann said. “If you have a specific health care need, I really encourage you to take the time find the link on our website, download the brochure and take a few minutes to leaf through it.”

Beyond FEHB and PSHB information, enrollees can also see more details on OPM’s website about the Federal Employees Dental and Vision Insurance Program, as well as FSAFEDS — the government’s program for flexible spending accounts. FSAFEDS allows current federal employees each year to set aside pre-tax dollars to go toward eligible out-of-pocket medical expenses.

Schumann strongly encouraged participants to consider enrolling in an FSA, to help save on out-of-pocket costs.

“It allows you to save essentially 20% or 30% on what you would pay for those things, when you consider the tax savings,” Schumann explained. “There is a ‘use or lose’ rule with a flexible spending account generally, but there are mechanisms where, on the health care side for example, you can roll over any excess funds up to a certain limit — assuming you enroll in a flexible spending account the next year.”

While benefits inevitably change year-to-year in FEHB and PSHB, there are also a handful of coverage updates coming from carriers in FEDVIP as well, Schumann said. That makes it all the more prudent for participants to take a look at what’s out there this Open Season.

“Among dental plans, there are some who are offering additional enhanced benefits for additional cleanings during pregnancy, for example,” she said. “On the vision side, there are some plans that are offering additional benefits for folks with diabetes, since we know that they require some enhanced vision services. Folks who might be interested in those benefits should take the time to look at OPM’s website and find out more information about those.”

OPM’s year-round work on health insurance

Although Open Season is the most public-facing time of year for OPM’s health insurance office, the work for the agency truly takes place year-round when it comes to the government’s various insurance programs.

Throughout the year, OPM issues call letters to collaborate with carriers on any changes to benefits or coverage for the following plan year, as well as to discuss priorities on premium rates and costs within the insurance programs.

The premiums are, in part, driven by costs of care from prior years, while also incorporating predictions of what health care costs will look like in the year ahead, Schumann explained. Based on the estimations, OPM’s actuarial team then negotiates the rates with carriers to reach the final values.

“Really what we’re seeking to do is to find the right balance of comprehensive medical coverage with affordability — we’re always trying to strike that balance,” she said.

In the weeks leading up to Open Season’s start date, OPM works to update all information on its website — including the plan comparison tool, as well as all carriers’ health plan brochures for the following plan year.

“We can add information, if needed, to make sure that people get what they need to make informed decisions,” Schumann said. “We also monitor the web traffic to our site to see where people are coming from and what information sources they are most interested in, so that we can adapt during Open Season.”

Then once Open Season ends, OPM works closely with FEHB and PSHB carriers to make sure any participants who changed plans during the open enrollment period are able to get their new insurance cards and all the information they need, ahead of the actual start of the new plan year in January.

Medicare Part D — and the final word

During Open Season, Schumann also stressed the importance of considering some key differences within Medicare Part D and how that will operate for participants depending on whether they are in the FEHB or the PSHB program.

“Many FEHB plans, though not all, provide a Part D prescription drug plan that works in conjunction with their plan. And if you’re eligible and Medicare-enrolled, you’ll be opted into that plan,” Schumann said. “But you can opt out, and you will still have coverage under the underlying FEHB plan, if you choose not to enroll in Part D.”

But for Medicare-eligible PSHB participants, there is an important caveat: PSHB enrollees can only access prescription drug coverage through the program if they have Medicare Part D.

All Medicare-eligible participants will be automatically enrolled, but there is no underlying prescription drug coverage for PSHB participants if they choose to opt out of Part D.

“Every PSHB plan offers a Part D plan that works in conjunction with the PSHB plan,” Schumann said. “Enrollees still have the option to go out on the retail market, if they prefer to choose a different plan than the one offered by their carrier, and purchase a Part D plan. But they just need to know that they have to have Part D if they want to have any sort of prescription drug coverage at all” through PSHB.

Ultimately, Schumann doubled down on her recommendation for studying up and getting an early start on Open Season to ensure participants find the best plan option for them.

“I know it can be daunting to make your way through all of this information about all of the benefit choices available to you, but it’s really time well spent to make sure that you get the coverage that’s right for you and for your family,” she said. “We welcome the opportunity to serve you, and we always welcome feedback on how we can make things better in the future. So take the time, make those decisions carefully, and we’ll look forward to a successful Open Season.”

Discover more articles and videos now on our 2026 Open Season Exchange event page.

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By comparison, the average premium increase across all FEHB plans for 2026 is 12.3%, when taking into account the 47 carriers offering a total of 132 total plan options for next year. Not all plan options are available to all FEHB enrollees, as some are specific to certain agencies or geographic regions.

Premium costs, however, are far from the only factor that enrollees should be considering when making a plan selection, according to federal health plan experts.

“FEHB enrollees losing their NALC health plan should carefully consider which health plan will be the best fit for them,” said Kevin Moss, director of marketing and fundraising at Consumers’ Checkbook. “Besides reviewing the plan premium and out-of-pocket costs for benefits, make sure to check the website of the new plan you’re considering to see if your current providers will be in-network, and how any prescription drugs you may take will be covered.”

Notably, the lowest-cost nationwide plan, GEHA Elevate, has lower premiums, but also much lower coverage than GEHA High. NALC High — which the vast majority of those impacted by OPM’s decision are coming from — is more similar to GEHA High than it is to GEHA Elevate, but still with some differences in benefits.

For instance, an enrollee in NALC High who had a $300 deductible for a “self only” plan in 2025 would move to a $500 deductible in 2026 under GEHA High. By comparison, the enrollee’s deductible would increase to $750 under GEHA Elevate.

As another example, an enrollee in NALC High with a catastrophic out-of-pocket maximum of $3,500 for a “self only” plan would see that limit increase to $7,500 under GEHA High. The out-of-pocket maximum for GEHA Elevate, in contrast, is $10,600.

John Hatton, senior vice president of policy and programs at the National Active and Retired Federal Employees Association (NARFE), said a higher-premium plan with more coverage may be the best plan for some enrollees, but not necessarily others.

“Maybe the high premium plan with more coverage is the right choice for you, but you may want to look at some other alternative plans that might be cheaper. Because there are options, even with really low deductible plans, that have lower premiums than the main big dogs in the program,” Hatton said in a recent interview on The Federal Drive. “So it’s really critical that you look and choose what’s best for you.”

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As federal employees and annuitants consider making changes to their health insurance options during this fall’s Open Season, it’s also a prudent time to consider the bigger picture too — by looking at options across the entire insurance landscape.

Although Open Season is an important opportunity for feds in any year, M. Shane Canfield, CEO of WAEPA, said the unpredictability of this year for many federal employees makes it all that much more critical for plan year 2026.

“With the uncertainty with federal jobs — the layoffs, the forks in the road — we highly encourage you now, as you’re looking at your whole budget and considering whether your health plan is appropriate for you, to loop in other insurance — and that would include life insurance,” Canfield said during Federal News Network’s 2026 Open Season Exchange.

Take stock across your financial landscape during Open Season

Since many federal insurance enrollees do use Open Season as an opportunity to take a broader look at their overall financial health options, it becomes a busy time of year for WAEPA, Canfield said. But unlike the sharply rising premium rates enrollees will face in 2026 for their health insurance costs, the price tag for life insurance is much smaller in comparison.

And beyond that, WAEPA also provides a return of 10% of insurance premiums back to the individuals who are enrolled in the program.

“We take that very seriously,” Canfield said. “The implications flow all through our business. We take a long-term view. We invest in the organization. We do earn revenue to run the program, but all of it inures back to the members.”

And looking beyond a federal career, Canfield emphasized that participants can take their insurance coverage with them, even if they ultimately exit the government’s rolls due to all the workforce changes from the last several months. Canfield said that’s relatively uncommon in the life insurance marketplace — and that it may be more important of a factor this year than ever before.

“If you leave federal service for any reason — retirement, RIFs, layoffs, or it’s just time for you to leave because you’ve had 30-plus years of service and you’re ready to do something new — you can take WAEPA with you,” Canfield said.

Added opportunities through WAEPA

Federal insurance participants also have the alternative option of enrolling in the federal government’s life insurance program, called the Federal Employees’ Group Life Insurance. But Canfield noted that there are some key differences between WAEPA and FEGLI to keep in mind this Open Season.

Through WAEPA, for instance, Canfield said that on top of the costs being generally lower, there are also some riders added onto the benefits. That includes an automatic benefit increase rider, as well as a chronic illness rider. The rider gives an early death benefit payout — of up to $125,000 per year — to people whose medical conditions would also trigger long-term care insurance benefits.

“This is what prudent financial management is all about with an insurance plan,” Canfield said. “We exist for one reason, and that is to provide life insurance for civilian federal employees.”

Additionally, federal enrollees can get access to a scholarship program through WAEPA, as well as a financial wellness program. The financial wellness program lets individuals establish a confidential relationship with a certified financial planner, at no additional cost.

“We encourage people, even if you don’t want to buy the life insurance, join WAEPA,” Canfield said. “You don’t have to buy the life insurance to join and take advantage of this. And now is a great time, with all the uncertainty in the markets and the work environment.”

Discover more articles and videos now on our 2026 Open Season Exchange event page.

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The Department of Homeland Security is giving $10,000 bonuses to transportation security officers who demonstrated “exemplary service” through the government shutdown.

Homeland Security Secretary Kristi Noem announced the bonuses during a press conference in Houston, Texas, today. She highlighted the “tens of thousands of individuals who stepped up and continued to serve” at the Transportation Security Administration despite receiving no pay through the 43-day shutdown.

Asked whether she was referring to those who did not call out sick or stay home, Noem said, “that’s not necessarily the parameters.”

“We’re going to look at every individual that did exceptional service during this period of time when there were so many hardships,” Noem said.

DHS did not immediately respond to questions about who qualifies for the bonuses. TSA employs approximately 50,000 transportation security officers, meaning a bonus for every officer would cost roughly $500 million.

In a press release, DHS said it’s paying for the bonuses using carryover funds from fiscal 2025.

Disruptions to air travel began to grow in the final weeks of the shutdown. Security lines began to grow longer as some TSA officers called out. Meanwhile, flight delays and cancellations grew as air traffic controllers at the Federal Aviation Administration began calling out of work amid multiple missed paychecks.

Noem’s announcement comes after a Truth Social post by President Donald Trump earlier this week, in which he raged at air traffic controllers who took time off during the shutdown. Trump also announced $10,000 bonuses for controllers who “didn’t take any time off for the ‘Democrat Shutdown Hoax.’”

Transportation Secretary Sean Duffy said he agreed with Trump’s idea for a $10,000 bonus for air traffic controllers who had no missed days of work. But Duffy also offered a reprieve for some employees who missed days during the shutdown.

“We have some controllers who were put in a very difficult position,” Duffy told a Wisconsin TV station on Tuesday. “They’re young. They don’t make a lot of money when they first start out. They can make some good money later in their careers, but when they start out, they’re not making a lot. They may be the sole source of income, and they were confronted with a real problem.

However, Duffy also vowed to target “continual bad actors” during the shutdown.

“If they started to take time off because the shutdown was an excuse for them, we’ll take a look at those people, and we’ll work with the union and see what an appropriate response from the FAA will be,” he said.

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Following the longest shutdown in U.S. history, the federal workforce is now trying to get back to at least some sense of normalcy.

While federal employees who have been furloughed for the last 43 days return to work Thursday, the Office of Personnel Management is setting expectations for agencies as they begin to update pay, leave and benefits for those impacted by the lapse in appropriations.

In new guidance, OPM said it is “is committed to ensuring that retroactive pay is provided as soon as possible.” Compensation will be provided for both furloughed and excepted federal employees, as the spending agreement that was enacted Wednesday evening reaffirmed. A 2019 law previously called for retroactive compensation for all federal employees impacted by a shutdown.

A senior Trump administration official said the White House “has urged agencies to get employee paychecks out expeditiously and accurately to not leave anyone waiting longer than necessary.”

But the timing of employees receiving their back pay varies, depending on what payroll provider an agency uses, and the different pay schedules across the federal workforce.

Sending out retroactive payments to employees involves working across agency HR offices, federal payroll providers and shared service centers. Agency HR offices, for instance, have to submit timecards for federal employees, which are then processed by the government’s various payroll providers.

According to the senior administration official, employees from the General Services Administration and OPM will be among the first to receive their retroactive paychecks, with an expected deposit date set for Saturday.

Employees at the departments of Veterans Affairs, Energy, and Health and Human Services, as well as civilian employees from the Defense Department, will receive their deposits shortly after that — this Sunday.

On Monday, affected employees from the departments of Education, State, Interior and Transportation, as well as the Environmental Protection Agency, National Science Foundation, Nuclear Regulatory Commission, Social Security Administration and NASA, are all expected to receive their back pay.

Then on Wednesday, employees from the departments of Agriculture, Commerce, Treasury, Labor and Justice, along with the Department of Homeland Security, the Department of Housing and Urban Development and the Small Business Administration, are projected to get their paychecks. The timing of the retroactive payments for feds was first reported by Semafor.

The National Finance Center, a payroll provider housed under the Agriculture Department, confirmed that employees at agencies using NFC’s services should expect a payroll deposit by the middle of next week.

“In order to provide backpay for employees as quickly as possible, the National Finance Center will be expediting pay processing for pay period 22 and backpay for pay periods 19 (October 1-4), 20 (October 5-18), and 21 (October 19-November 1),” USDA wrote in an all-staff email Wednesday evening, obtained by Federal News Network.

Federal News Network has reached out to several other federal payroll providers requesting details on the timeline for processing retroactive payments.

The National Treasury Employees Union urged immediate back pay for all federal employees who have been going without compensation for the last six weeks.

“This is an emergency for federal employees across the country, and they should not have to wait another minute longer for the paychecks they lost during the longest government shutdown in history,” NTEU National President Doreen Greenwald said. “We call on all federal agencies to process the back pay immediately.”

In its new guidance, OPM also noted that to make payments as quickly as possible, payroll providers may need to “make some adjustments.” That could mean, for instance, that the initial retroactive payments employees receive might not reflect the exact calculations of their pay and leave hours.

“Payroll providers will work with agencies to make any necessary adjustments as soon as practicable,” OPM said.

Who receives back pay, and how much?

Furloughed employees will receive their “standard rate of pay” for the hours they would have worked if the government shutdown hadn’t occurred, OPM said in its guidance Wednesday evening.

But there are some exceptions to that. If a furloughed employee, for example, had been scheduled for overtime hours that would have occurred during the shutdown, OPM said they should be paid their premium rate for those hours.

Additionally, OPM said that allowances, differentials and other types of payments, like administratively uncontrollable overtime pay or law enforcement availability pay, should be paid as if the furloughed employee continued to work.

Although most employees impacted by the shutdown are ensured back pay, there are some smaller exceptions carved out where employees may not receive retroactive pay, OPM added.

If a furloughed employee was in a non-pay status before the shutdown began, for instance, then they are not entitled to receive back pay.

Excepted employees who were considered “absent without leave” (AWOL) — or in other words, took unapproved time off — will also not receive back pay for that time.

Guidance on leave, post-shutdown

Although excepted employees are not required to use paid leave for taking time off during the shutdown — and can instead enter a “furlough” period — there may still have been some instances where excepted employees took leave during the funding lapse, OPM wrote in its guidance.

In those cases, excepted employees who were approved to take paid leave during the shutdown will be charged for the hours from their leave bank, OPM said.

Agencies are also expected to begin adjusting leave accrual for furloughed employees. Now that the shutdown is over, furloughed employees should be placed in a “pay status” for the time they would have otherwise spent working during the funding lapse. That means accrual of annual and sick leave will be retroactively adjusted as if the employees were in a pay status, OPM said.

Excepted employees continued to accrue leave during the shutdown, which should be reflected in their leave banks, OPM said.

What happens to RIFs of federal employees?

On top of reaffirming back pay, the spending bill that was enacted Wednesday evening also rescinds the roughly 4,000 reductions in force that have occurred since Oct. 1. Federal employees will be temporarily protected from additional RIFs, at least until the end of January.

Agencies have five days to inform federal employees who received RIF notices in October that those actions are rescinded.

“Agencies should issue those notices and confirm to OPM the rescissions have been issued,” OPM’s guidance states.

At least 670,000 federal employees have been furloughed, and 730,000 employees have been working without pay during the shutdown. Agencies have been putting plans in the works to return all furloughed federal employees to their duties as of Thursday.

OPM also said agencies “may consider” providing flexibility for employees who might not be able to return to work immediately, such as by approving personal leave or adjusting individual work schedules.

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