AND IMPACTS MANY OF THESE ARTICLES. they are correct at the time they are written. however, IT IS NOT POSSIBLE TO RE-WRITE EVERY SINGLE ARTICLE AS EACH LAW CHANGES. PLEASE MAKE SURE YOU RESEARCH THE LATEST RULES REGARDING YOUR INTENDED FINANCIAL DECISION. IT IS ALWAYS BEST TO CONSULT A PROFESSIONAL (CPA, CFP, ESTATE ATTORNEY, ETC.)
RETIREMENT IS TOO BIG AND TOO IMPORTANT TO SCREW UP
Guide to FERS Resources, Part One
If you’re like most federal employees, when you started your career in your 20’s, you weren’t thinking much about retirement. You might not have even known that you would get a pension one day. You almost definitely didn’t know enough to ask questions like, “Is there a COLA on the Supplement?” (You might not know enough to ask that question even today!)
But at some point in your career, generally after you have 15 years or so under your belt (hello 8 hours of leave!), you might have started wondering about long-term benefits. You probably started by casually talking to the one guy in your office who appeared to have a handle on all of this retirement stuff. Every office seems to have one. In another few years, maybe you attended a retirement seminar and started getting a little more serious about exact benefits, and other items unique to your specific circumstances. Around that point, something resembling a loose plan of action started to develop in your mind.
Anyone that has gone through this evolution has probably been more than a bit frustrated and perhaps even confused with the lack of resources available to them. Or maybe you got conflicting information on something? HR departments in most agencies don’t help a whole lot. And to be fair, they aren’t really designed to. They are there to process your retirement and benefit paperwork, not to give you retirement or benefit advice. People call me with more complaints about HR people than any other group. Just keep your expectations in check.
If any of this sounds familiar, this paper is for you. It’s the first in a series I plan on putting together that lists specific resources available to assist you in your FERS benefits education. Hopefully it provides the framework for you to not only understand your benefits, but to help you make the best decisions possible for your situation. And to prevent the dreaded phrase down the road: “I should have….”
FEDERAL LAW
Cost: FREE
Federal benefits are, not surprisingly, prescribed by federal law.
Most of these are covered in Title 5. For example, what regulation says that unused sick leave is carried forward indefinitely? 5 USC § 6307. Chapter 63 covers leave and §6307 covers sick leave. A simple Google search will get you the actual text, generally from a website like Cornell Law or another university site that publishes the US Code. Federal law will often delegate authority to other entities like OPM, which we’ll get to in a minute, but the law is the ultimate source for your research.
The problem with this? It’s extremely cumbersome, written in hard-to-understand language at times, and provides very little in the way of examples. It can also be terribly time-consuming. Yes, your answer is there. Somewhere. And it is authoritative. But what good is an answer if you can’t find it? Or even worse, you spend lots of time to locate it, but in the end can’t understand it?
It gets worse. For questions related to taxes, investments, and some TSP items, you can find answers in both Title 5 as well as Title 26. For example, 5 USC § 8440 says that for tax purposes, the TSP will be covered by 26 USC §401. Title 26 houses the Internal Revenue Code, and 401 is the section that gives us the well-known 401(k). Incidentally, this is why TSP rules look so similar to other employer-sponsored retirement plans.
What about the law that allows federal LEO’s and firefighters to have penalty-free access to TSP at age 50? That’s 26 USC §72(t)(10)(A).
Outside of the lawyers and CPA’s out there, I’m assuming reading federal law is not your preferred method of learning. So, let’s move up the ladder in user-friendliness…
OFFICE OF PERSONNEL MANAGEMENT
Cost: FREE
OPM is a little better. They attempt to provide you the answers in more or less plain language. And will often have examples and FAQ’s about particular subjects you may be researching. For example, if one goes to opm.gov, there is a tab at the top that reads, “Retirement”. Under that tab, you can choose “FERS Information”and then under that, “Computation”. This will show you how your annuity is calculated based on your High-3 and your credited years of service. You don’t have to wait a month or more for your HR office to get your retirement estimate back to you. You can simply go to the instructions listed above and calculate your own annuity.
Better than just reading the federal code straight, right? I think so. In fact, it’s one of the best places to get information. There are calculators, tons of forms, and updated notices in relatively plain English.
It’s also not just for retirement issues. Pay administration, leave questions, and things like the current life insurance rates are all available at opm.gov.
The downside? It’s still a little awkward. It’s not always easy to find exactly what you’re looking for. There is definitely a learning curve on getting used to the site. And it still leaves a lot of employees unsure of exactly what they read. And if you want to ask an actual human being your question, well, good luck. In other words, it often lacks the practical interpretation in the same way federal law does. Enter the private resources….
DAN JAMISON’S FERSGUIDE
Cost: $20/Year for full online access, $15 for the print-only annual guide
If you have followed me for awhile, the FERSGUIDE will certainly sound familiar. I’ve researched every resource I could find online and the FERSGUIDE is the best all-around site, by far. It is also one of the few places where you can find Special Category Employee-specific information. (SCE’s are federal LEO’s, Firefighters, Air Traffic Controllers). Dan Jamison is the author. He’s a retired FBI agent and a licensed CPA, so not only does he understand the financial stuff, he’s actually lived through all of this and can speak from personal experience.
Dan has only been retired for a few years, but he’s been writing the guide for over 20 years now. Much like the stuff I write, it circulated free as a service to coworkers for many years before he retired as a way to fill the void of a lack of retirement resources.
The FERSGUIDE is just an absolute treasure trove of information. Want to find an annuity calculator? It’s on there. How is Social Security calculated and what happens if you don’t have enough years? It’s on there. Need a list of financial planners that are familiar with government benefits? Ask Dan. The FERSGUIDE is updated routinely and comes with a monthly newsletter.
The one area where Dan outshines every other person I’m aware of is in the area of divorce support. There are unique divorce issues that arise when a federal employee’s marriage ends. Many divorce decrees issued by the states aren’t accepted by OPM or TSP. Separate legal documents have to be drawn up. Dan greatly assists attorneys in developing these. If you are going through a divorce, or have a divorce in your past where your spouse was awarded part of your TSP or your annuity, I highly recommend you contact Dan.
The other incredible benefit is direct access to Dan. If you are a subscriber, you can email Dan directly and ask him your question. And be confident of the response. That’s a lot of value for the price of a lunch or two. Don’t be cheap. Invest in yourself. You are your greatest asset.
I always want to be clear on this point: I have never received a dime from FERSGUIDE and have no business agreement with them whatsoever. It really is simply because they are the best thing out there. Once I find something better, I’ll be pushing that as well. Because of the quality of information, and because of Dan’s integrity, I have agreed to allow all of my writings to published on his site. But again, I receive nothing for this. All of my writings are available directly from me completely free of charge, but they are also all posted on the FERSGUIDE.
The downside to the FERSGUIDE? It’s not authoritative. Dan does a fantastic job of keeping everything current and I’ve never found an error, but remember that Title 5 and OPM regs are the ones that really matter if you find yourself in an adverse position against the government.
Cost: Articles are free. Paid services available at her website
Tammy has been explaining federal benefits for over 30 years. She has her own consulting firm where she can be contacted to provide individual or group services. Each Friday, Tammy writes a very informative article for Govexec.com. These articles are completely free and available to be sent directly to your email if you subscribe to Government Executive notices. Basically they work like this: Each week, Tammy takes one particular topic of FERS (and sometimes CSRS) and explains it in easy to understand terms. They are very informative as well as accurate (which is surprisingly rare in the FERS advisor world!)
There is also a link available on Government Executive for her past articles, so if you are researching a particular topic—say, survivor benefit options, you can go look for a past article on the subject. See the index link at the end of this paper.
By the way, there are several other similar sites where you can see articles and news referring to government benefits (fedsmith.com, federalsoup.com, fedweek.com, myfederalretirement.com, and others). Feel free to check them out. Personally, I think GovExec is the best and most professional. Sometimes the others get too bogged down in opinion, and sometimes just flat out erroneous guidance, but that’s for each one of you to decide for yourself. This past summer, I was contacted by one of these other sites and received an offer to write articles for them. I politely declined.
If you’re like me, you’ll love to read the comments section at the bottom of each of these articles as self-professed experts explain their particular position on a FERS benefit. What they lack in accuracy, they often make up for in humor. Don’t base a serious decision on anything you see in there, though. Reader beware.
The above are all good resources ABOUT retirement regulations, but what if you want a resource on TRANSITIONING into retirement. This is a more difficult area. And one where you’re not going to find much help from the federal government. So we have to turn to a private resource.
Alan Malinchak came very highly recommended to me by someone who recently used his services to create a resume that assisted him in obtaining a great job much faster than he expected. I did some cursory vetting and found people whose opinion I value. They spoke highly of Alan as well. At that point I contacted him personally to see what he can provide. Alan is also a retired FBI agent and has spent significant time in the private sector performing training and consulting services. After speaking with Alan, I thought it might be best if he just wrote some background on himself and some things to think about when transitioning from the public to private sector. As such, the rest of this newsletter will be his writing.
(Understand I have not personally used him. But I have heard nothing but good things about him. And I have found his writings to be helpful, particularly to those that are wanting to leave but not sure what they are wanting to leave to. As with anything out there, please do your homework.)
Not Quite as “Easy as Sunday Morning” – Preparing for a Transition from Public Service to Private Industry
Alan A. Malinchak is the CEO of Eclat Transitions LLC, a career transition services company with over 40 years of professional experience in government, industry, academics and is a U.S. Navy Veteran (DAV). Al can be reached at al@eclat-t.comor contact him through LinkedIn.
In 2002, just two years from FBI retirement eligibility I realized the need to continue employment beyond retirement with two daughters’ college bound. My two year path to prepare for a career in private industry was a sound plan, but as I look back I was woefully unprepared - I was simply lucky. I have been fortunate to work for two government contracting companies, a consultant to a global software company and presently as CEO of Eclat Transitions LLC.
I have learned the ins and outs of employment within private industry as well as government contracting. This article is a reflection and a guide related to the changes you will need to consider and begin your preparation as you approach your next successful career beyond your public service and your “reinvention” into private industry.
Change is both inevitable and controllable. The most difficult aspect of preparing for your transition is “not knowing - what you don’t know”.
Start preparing NOW – long before you intend to retire or complete your public service. There is a great deal you will need to do to prepare to land a GREAT job in private industry. Preparing over time will reduce the stress and put you several steps ahead of those you will be competing against in the private job market. You know hard work – being a public professional has prepared you to be successful in your post public career. You can do this; you simply need a plan - a roadmap of what to do. To make a plan, analyze the direction of your path and make logical decisions, and, you need to engage the following considerations.
Financial
Start by knowing your numbers. Determine your financial living plan. Determine how long you want/need to work beyond your public career and within the private sector. Calculate all the factors related to your income needs now and beyond the net value of your public pension?
Emotional
You will experience fear and anxiety of the unknown, conflict over financial considerations, and emotional ups and downs during the process of your professional reinvention. You will be leaving a profession where you have contributed and made a significant difference in the world. You will be leaving a comfort zone where you have experienced success and have an established identity - for the unknown. As you plan for this transition, you may not know what you want to do or what you are qualified to do or you may need new professional credentials/certifications beyond your current public knowledge, skills and abilities (KSAs). For the most part, you are going to be starting over – you will be the newbie once again. You will need to invest time, energy and finances into preparing for your next career as “Who You Are” may not be “Who You Will Be”.
Evaluating the Job Market
You will need to understand the areas of growth in the job market - by industry - by location. Learn what professional positions are in demand now and what/where are the trends. Evaluate whether you want to work for a corporation or a small business, publicly traded or privately held company. Are the companies you are interested in profitable, stable and do you believe they will survive the next economic downturn, fiscal cliff /sequestration?
Non-Profit, Public, Private or Entrepreneur?
Do you have the desire, finances and drive to start your own company, be your own boss? Do you understand marketing, customer base, and are you ready to work 24/7? Building a career path map that allows you to find a relatable position in a non-profit, public agency, private enterprise or as an entrepreneur should focus on your interests, qualifications and financial needs. Have you conducted an assessment of your competencies? Are there gaps in your competencies and the skill set necessary to be successful in your post public career? Which competencies translate well to business needs? What are you missing? How do you acquire what you need? How much time do you need and at what cost?
Business 101
Do you possess business acumen? Are you knowledgeable about business drivers, e.g., i.e. revenue, growth, profitability, and program execution?
Are you familiar with corporate hierarchy, titles, roles and responsibilities? In business, you are either overhead (cost the company money) or direct labor (generate income for the company). Knowing which position to target based on your qualifications, potential to add value to a company, and your comfort zone is essential. A company’s growth is dependent on business development and its pipeline of future contracts for goods and services. Learn the drivers of what enables a company to grow and succeed and how your capabilities are essential for their continued growth. Are you familiar with the world of government contracting? Do you “Know the Drivers and Timing for Corporate Hiring”?
Professional Certifications/Additional Education
Most likely you have been involved, supervised or led projects and programs throughout your public career, but do you have a Project Management Professional (PMP) certification? If you are involved in network or cyber security operations, do you have certifications in A+, Network+, Security + or are you a Computer Information Security System Professional (CISSP)? You may have the operational experience and skills but you will need a professional certification to be competitive in private industry. During your public career you may have been involved in acquisitions, contract review or personnel human resources. Did you acquire any public certificates that will enable you to get to the next level of an external professional certification? Are you familiar with the American Society of Industrial Security (ASIS) International, and the ASIS professional certifications for investigations, facility security and executive protection? Professional certifications are valued by performance-based businesses that direct bill to their clients and are the backbone of private industry. Have you acquired or do you need additional education that can be leveraged to be more competitive?
Security Clearances
Your security clearance has monetary value in private industry. If you have it - Maintain it. Ensure your reinvestigation is complete prior to leaving public service.
Networking
It’s important to maintain a network of your trusted friends within the public organizations who have entered private industry as well as expand your networking beyond those trusted friends. Join professional associations, establish a LinkedIn account that addresses your competences, attend professional networking functions/events, volunteer at non-profit associations, establish relationships with recruiters – simply make as many connections in as many industry spaces as you can. Making connections, professionally and socially is a key discriminator in people knowing you are looking for a position and having something to offer. You understand and know the benefits of building rapport – start now to strengthen your networking skills.
Job Boards, Job Fairs and Recruiters
Identify and attend job fairs, especially those that are searching for job candidates with security clearances. Learn from the hiring managers present what capabilities/credentials they are looking for? Review job boards, and learn how to use job board aggregators and the techniques to get job leads emailed to you directly. Establish relationships with recruiters who can contact you when opportunities arise.
Resume
Many of you may have not yet written a corporate or private industry resume and some of you may have been like me and tried to create a complete summary of my career accomplishments that spanned 20 pages. Your resume needs to address WHAT you did, HOW you did it, and the METRICS/RESULTS associated to the What and How. Human Resource staff and hiring managers that read resumes typically get hundreds of them and they only take 7 seconds to review one and determine if you have the skills for the positions they are hiring for. Writing a resume the right way and including the right information will be critically important. And usually, it must be no than 2 pages max!
Interview
Congratulations! If you are going on an interview it means you are generally qualified for the position! The interview process is how companies determine which candidate is the MOST qualified for the job. They are drilling down on the depth and breadth of your experience as compared to other candidates as well as determining your personality and cultural fit within their team and the company. This is a weeding out process and there are tricks to stay on the shortlist and make it to the finish line. There are typically 3 or more interviews before a decision and there are multiple interviewers. Some companies do personality or skills assessments as well to ensure there is an organizational and cultural fit.
Negotiations
In your public career, your salary, vacation and benefits are predetermined. Not negotiable. But in industry how well you negotiate your first compensation package can be a hallmark on how you are compensated going forward. In industry there can be many variables to negotiate including title, basic salary, bonus structure, vacation, stock options – the list goes on. Employers expect to negotiate salary and other benefits. Not everything is open to negotiation. It depends on the company, their compensation policies and the level of the role you are being considered for. The reality is that a company’s success is dependent on their controlling costs so they typically won’t offer a penny more than they think they have to - to make a hire. The first offer will typically be fair but not the highest they can go. The candidate must make a case to negotiate a better offer. Always remember the value of your security clearance and experiences, and, should an employer refer to your pension – never allow the monies you earned for your public service to be a pawn in the employer’s counter negotiations.
A Day In The Life
Your new career is going to be different. Different culture, mission, job responsibilities, cast of characters including boss (es) and now CLIENTS, commute, processes, etc. The leadership and teamwork traits that you have fine-tuned in your public career are desired, valuable and critical to private industry, especially how they affect performance within a company. Companies value good employees, especially those that contribute to either top line growth or bottom line savings.
Ask or Look for Assistance
There are others who have gone before you, some successful, some not. Seek out both and learn from their mistakes and successes. Yes, there are companies that can provide direction and assistance, but the most important step is recognizing you need to prepare and invest the time, energy and enthusiasm into your transitional career as you did when you transitioned from your former position before becoming part of your current organization.
Summary
Change is hard. You need to be resilient in your efforts to transition to your next career requires you to think “reinvention”. Expand your capabilities and your network, and remember, “It’s Only the Beginning…” of your next chapter. Good Luck and God Bless.
SUMMARY
As I mentioned earlier, this is meant to be Part One of a series on where to find information on FERS. My plan is to provide additional resources in the future. There are a lot of things out there to be evaluated. There are books, services, and even phone apps for FERS-related items. I’ll get to them.
One final word, and I’ll leave you guys to get back to enjoying your life. When it comes to investing in themselves, I find federal employees to be, for lack of a better word...cheap. Don’t skimp on yourself. Some things are worth paying a professional to at least taking a look. I see a crowd of feds every day at Starbucks, dropping $5 a drink, but then they balk at spending a couple of hundred bucks for a financial plan. Or to get some professional tax advice. Or for the FERSGUIDE. Or for some assistance to craft a great resume that lands you that six-figure job.
If I could stress anything in this area it would be to not be cheap when it comes to investing in yourself.
YOU are your greatest asset.
Find out what you make in a day and consider investing that amount into something that betters you each year. It may not be beneficial for you to drop a ton of money on a Master’s degree or something drastic like that at this stage of your career. But I don’t think it’s unreasonable to spend 1 day’s pay each year on something that provides future financial benefit.
I’m not trying to talk anyone into hiring me. I’m unhireable. And I don’t make a dime off of any of the resources listed here, so I’m not trying to generate a commission of some sort. I’m just encouraging you to realize you might be better off in the long run if you invest a little into yourself every now and then.
