WEBVTT

NOTE
This file was generated by Descript 

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Lawrence: Welcome to The FED Weekly
for 23-29 November 2025, your essential

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weekly briefing on the policies
and proposals shaping your career,

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your benefits, and your retirement.

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Whether youâre a current federal employee
navigating changes in the civil service

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or a retiree keeping a close watch on your
hard-earned pension and healthcare, this

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is your source for the latest news from
Capitol Hill and the executive branch.

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Each week, we cut through the noise to
bring you the critical updates on budget

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negotiations, pay raises, workforce
policies, and the legislative battles that

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directly impact the federal community.

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Let's get you up to speed on
what happened this past week.

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Issues That Affect Current
and Retired Federal Workers

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The Critical Benefits Window:
Federal Benefits Open Season Update

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The period from November 23 to
November 29 occurs during the critical

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Federal Benefits Open Season, which
began on November 10, 2025, and

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continues through December 8, 2025.

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This enrollment period is uniquely
important this year, as the recent

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government shutdown severely complicated
agenciesâ ability to communicate essential

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information and resources to employees.

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Following the resolution of the
appropriations lapse, the Office of

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Personnel Management (OPM) issued
guidance encouraging agencies to

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prioritize communicating Open Season
information immediately, placing

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special emphasis on notifying
employees of plan changes detailed in

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Benefits Administration Letter 25-401.

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The 2026 Affordability Crisis

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For both active employees and federal
retirees, the dominant factor impacting

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Open Season decision-making is the
continuing escalation of healthcare costs.

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OPM announced that the average enrollee
share for premiums under the Federal

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Employees Health Benefits (FEHB)
program will rise sharply by 12.3%

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for the 2026 plan year.

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This increase continues a worrying trend
of steep premium hikes, following a 13.5%

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jump in 2025, and marks the
third consecutive year of

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significant rate acceleration.

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Participants in the newer Postal Service
Health Benefits (PSHB) program are

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also facing steep increases, with their
average enrollee share rising by 11.3%.

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OPM attributes these relentless
cost pressures to demographic

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realities, noting that the average
age of enrollees is highâaround

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47 for active employees, rising to
60 when retirees are includedâand

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to persistently high prescription
drug and overall medical costs.

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The reality of this dual-digit percentage
increase means that for many federal

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workers and retirees, the effective
value of their compensation package

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is being rapidly diminished by the
cost of maintaining health coverage.

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Hidden Cost Shifts and
Benefit Design Changes

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Beyond the immediate rise in premiums,
an equally consequential trend is the

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shifting of financial risk onto enrollees
through modifications to plan designs.

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Analyzing the benefit changes for 2026
reveals that for many plans, what an

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enrollee pays when services are utilized
is set to increase significantly.

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This complexity necessitates a careful
review of specific plan brochures

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beyond just premium comparisons.

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A clear example of this cost shifting
is the increase in the catastrophic

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limitâthe maximum out-of-pocket
amount an enrollee must pay for

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approved healthcare services annually.

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For 2026, twenty-nine out of
one hundred thirty-two FEHB

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plans are raising this limit.

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The magnitude of these increases is
striking: GEHA Standard, a popular

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nationwide plan, is increasing its
out-of-network catastrophic limit by a

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staggering 135%, raising the self-only
limit from $8,500 to $20,000, and

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the self-plus-one/self-and-family
coverage limit from $17,000 to $40,000.

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Other significant nationwide PPO plans
are also increasing utilization costs.

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For instance, BCBS Basic members
will face higher costs for durable

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medical equipment, emergency
room services, inpatient and

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outpatient hospital services, lab
tests, and ambulance services.

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GEHA High and Standard members will also
see increased costs for physician visits,

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emergency room visits, higher deductibles,
and higher coinsurance percentages.

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While utilization costs are rising, the
program is also introducing new mandates.

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All FEHB plans are now required to provide
coverage for at least one GLP-1 medication

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prescribed for weight loss, and more
options than ever before are available

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for In Vitro Fertilization (IVF) coverage.

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However, even these newly
mandated benefits may come with

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increased member responsibility.

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For example, some Kaiser plans
are increasing the cost share

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for GLP-1 medications prescribed
for weight loss to 50%.

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These concurrent changesârising premiums,
sharply increasing catastrophic limits,

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and new cost-sharing arrangements
for mandated benefitsâunderscore that

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the real cost of FEHB coverage is
accelerating at a rate far exceeding

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the official average premium increase.

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Congressional Legislative
Tracking: Healthcare Cost Drivers

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The rapid escalation of FEHB costs, which
directly affects the federal budget and

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the financial security of millions of
citizens, has driven active legislative

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interest in Congress during this period.

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The underlying structure of
health care pricing is under

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scrutiny, particularly related to
Pharmacy Benefit Managers (PBMs).

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The Senate Finance Committee
announced plans this week to

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reintroduce bipartisan PBM reform
legislation in the coming weeks.

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PBMs are the middlemen in the drug
supply chain, and reform legislation

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typically seeks to curb opaque practices,
such as spread pricing in Medicaid,

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and mandate that PBMs pass 100% of
manufacturer rebates to plan sponsors.

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These reforms are aimed directly at
reducing prescription drug costs,

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which OPM cited as a primary pressure
point driving FEHB premium inflation.

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In the broader healthcare arena,
legislative proposals introduced

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just before the reporting window
signal a potential shift toward

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consumer-driven healthcare models.

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Senator Rick Scott (R-FL)
introduced the More Affordable

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Care Act on November 20, 2025.

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This bill proposes creating
"Trump Health Freedom Accounts".

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Under this model, individuals would
receive the value of federal premium tax

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credits directly into these accounts,
which could then be used for out-of-pocket

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health care costs or, critically,
to pay health insurance premiums.

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The legislation is championed as a way to
"fix Obamacare" and instill transparency

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by providing patients with upfront
pricing for medical goods and services.

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While this bill targets the general
healthcare market, a governmental emphasis

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on consumer-driven, high-deductible models
creates a political and regulatory climate

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that could eventually pressure the FEHB
program, potentially shifting even greater

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financial responsibility onto federal
employees and retirees, particularly

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those requiring complex or chronic care.

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Post-Shutdown Recovery
and Pay Implementation

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Following the enactment of the Continuing
Appropriations Act of 2026 on November 12,

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2025, the government resumed operations,
funded through January 30, 2026.

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A major administrative priority
during this week was the immediate

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implementation of Section 116 of the
Act, which provides retroactive pay

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to all federal civilian employees
affected by the lapse in appropriations

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that began on October 1, 2025.

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This mandate covers both employees
who were furloughed and those

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who performed excepted work
activities during the shutdown.

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OPM directed agencies to prioritize the
timely provision of this retroactive pay.

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Furthermore, OPM recognized the potential
difficulty employees might face in

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immediately returning to work following
the lengthy lapse and advised agencies

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to consider the use of appropriate
flexibilities, such as adjusting

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work schedules or approving personal
leave, consistent with mission needs.

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This guidance aimed to ease the
transition back to full operational

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status for the entire workforce.

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Issues That Affect Retired Federal Workers

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The 2026 FERS Cost-of-Living Adjustment

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For federal retirees, the most significant
news this week regarding annuity income

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relates to the Cost-of-Living Adjustment
(COLA) for the 2026 calendar year.

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The 2026 FERS COLA adjustment
has been finalized at 2.0%,

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effective with annuity payments
beginning in January 2026.

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The adjustment for FERS retirees
is governed by specific legislative

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constraints based on the rise in the
Consumer Price Index for Urban Wage

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Earners and Clerical Workers (CPI-W).

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The 2026 COLA calculation utilized
the average CPI-W from the

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third quarter of 2025 relative
to the third quarter of 2024.

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Critically, FERS retirees are
subject to a formula that caps the

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increase when inflation is moderate:
if the calculated CPI-W quarterly

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average increase is between 2.0%

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and 3.0%,

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the actual FERS benefit
increase is capped at 2.0%.

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When comparing this modest 2.0%

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increase in retirement income
to the concurrent 12.3%

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average increase in FEHB premiums,
a stark fiscal reality emerges.

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For many FERS annuitants, who typically
rely on their annuity and Social Security

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benefits as primary income streams,
the benefit increase is mathematically

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insufficient to cover the escalating cost
of their federal health insurance alone.

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This disparity results in a net
effective reduction in the purchasing

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power of the retireeâs fixed income,
forcing difficult budgetary decisions

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during the ongoing Open Season.

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In related news concerning financial
flexibility for retirees, the Social

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Security Administration announced
updated earnings limits for 2026.

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For those workers younger than
full retirement age, the earnings

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limit will increase to $24,480.

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This is relevant for retirees who
choose to supplement their annuities

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through part-time employment,
offering them a higher threshold

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before their benefits are reduced.

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Thrift Savings Plan Updates and SECURE 2.0

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Implementation

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The Thrift Savings Plan (TSP) continues
to issue guidance concerning the

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implementation of the SECURE 2.0

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Act, with major changes set to
impact those nearing retirement.

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Mandatory Roth Catch-Up Contributions

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A provision set to take effect on January
1, 2026, dictates that participants

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eligible to make catch-up contributions
whose prior year Medicare wages (those

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earned in 2025) exceed the IRS threshold
for TSP-eligible positions must designate

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those contributions as Roth (after-tax).

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If an affected participant eligible
for catch-up contributions holds

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elections directed toward their
Traditional (pre-tax) TSP balance, those

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elections will automatically switch
to Roth TSP contributions once the

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annual elective deferral limit is met.

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This rule change requires urgent planning,
particularly for high-earning current

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employees intending to retire soon.

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The determination of whether this
rule applies in 2026 is based on wages

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earned during the 2025 calendar year.

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Participants who fail to proactively
adjust their tax strategy for 2026

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may find their savings shifted from
the Traditional balance, which defers

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taxes until retirement, to the Roth
balance, which requires taxes to be

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paid on the contribution immediately.

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This shift fundamentally alters the
tax profile of their near-term savings.

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Investment and Withdrawal Clarifications

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The TSP also provided clarity on
other matters relevant to retirees

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and those nearing retirement.

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As planned, the L 2025 Fund, having
reached its target date, has been

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rolled into the L Income Fund,
the most conservative allocation

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for the Lifecycle fund series.

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Furthermore, the TSP reiterated
the status of the 10% early

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withdrawal penalty exemption for
qualified public safety employees.

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This exemption remains in effect for tax
year 2023 and later, ensuring that if

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a public safety employee separates from
service with 25 years of service, their

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distributions will not be subject to the
10% early withdrawal penalty, even if

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they separate before reaching age 50.

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Issues That Affect Current Federal Workers

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The 2026 Pay Structure: Targeted
Increases and General Freeze

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The pay structure for General Schedule
(GS) employees in 2026, stemming from

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the President's Alternative Pay Plan
issued on August 28, 2025, contrasts

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sharply with the statutory formula.

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The Alternative Pay Plan announces
a decision to provide a 1.0%

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base increase for 2026, while otherwise
freezing locality rates at 2025 levels.

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This aggregate increase falls
substantially below the raise

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required under standard pay law.

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Based on the 3.8%

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increase in the Employment Cost
Index (ECI) observed in September

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2024, the statutory base increase
for 2026 would have been 3.3%.

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By providing a 1.0%

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base increase and freezing
locality pay, the administration is

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effectively implementing a pay raise
that falls significantly short of

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the increase required to maintain
parity with the private sector.

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Strategic Pay Prioritization
for Law Enforcement

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In a move that signals a significant
shift toward segmented compensation, the

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President directed OPM to use special
salary rate authority (under 5 U.S.C.

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5305) to provide an
additional approximate 2.8%

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pay increase for certain front-line
Law Enforcement Officials (LEOs).

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The goal of this targeted use of
special salary rates is to align

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the LEO pay increase with the 3.8%

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military pay increase planned for 2026.

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Special salary rates are typically
established by OPM to counter existing

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or anticipated recruitment and
retention challenges due to factors

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such as higher non-federal pay rates
or undesirable working conditions.

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OPM specifically cited that certain
front-line LEOs are "critical

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to implementing the President's
strategy to secure the border,"

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justifying this targeted increase.

00:15:08.785 --> 00:15:12.965
This approach demonstrates a deliberate
strategy of prioritizing compensation

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rewards for specific, mission-critical
groups, resulting in a fractured pay

00:15:17.666 --> 00:15:21.555
landscape where the vast majority
of the General Schedule workforce

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receives a low, non-competitive
increase, while select groups receive

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an increase aimed at competitive parity.

00:15:28.995 --> 00:15:33.945
This fragmentation risks exacerbating
retention challenges in agencies and

00:15:33.945 --> 00:15:36.506
job categories deemed non-priority.

00:15:37.121 --> 00:15:40.361
Workforce Restructuring and
Headcount Accountability

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The executive branch is now moving to
institutionalize long-term workforce

00:15:44.999 --> 00:15:49.609
reductions through administrative
guidance issued by OPM and the Office

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of Management and Budget (OMB).

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Following President Trump's Executive
Order 14356, the guidance was

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released to ensure accountability
and discipline in federal hiring.

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OPM Director Scott Kupor noted that the
purpose of the new executive order is

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to build on the administrationâs success
in meeting and exceeding the goal of

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four reductions for every one new hire.

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Official figures indicate that the
government hired approximately 68,000

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people this year, while approximately
317,000 employees left the government.

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The new guidance requires
all executive agency heads to

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submit Annual Staffing Plans and
quarterly updates to OPM and OMB.

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The stated goals are to ensure that
headcount resources focus on the most

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critical objectives, deliver maximum value
to the taxpayer, and eliminate wasteful

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expenses in areas that are inefficient
or contradict administration priorities.

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Politicization of Hiring Decisions

00:16:51.707 --> 00:16:55.887
A key element of this restructuring
is the mandate for agencies to

00:16:55.887 --> 00:16:58.417
establish Strategic Hiring Committees.

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This measure ensures that new
career appointments are consistent

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with the national interest
and administration priorities.

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By placing "Democratically accountable
agency leadership" at the table for

00:17:11.567 --> 00:17:15.588
hiring decisions, the administration
is shifting control over staffing

00:17:15.588 --> 00:17:20.278
away from traditional human resources
practices and toward political alignment,

00:17:20.377 --> 00:17:24.708
ensuring that the previously achieved
workforce reductions will endure.

00:17:25.303 --> 00:17:29.303
This policy is being implemented
while OPM publicly emphasizes

00:17:29.303 --> 00:17:32.983
the scale of the governmentâs
external contractor infrastructure.

00:17:33.614 --> 00:17:37.093
OPM estimates there are at least
two times the number of contractors

00:17:37.093 --> 00:17:41.154
employed as full-time employees
(FTEs), costing the government

00:17:41.154 --> 00:17:44.464
approximately $750 billion annually.

00:17:45.204 --> 00:17:48.903
The focus on aggressive reduction of
the civilian employee count, while

00:17:48.903 --> 00:17:53.473
acknowledging the massive cost and
reliance on contractors for specialized

00:17:53.473 --> 00:17:58.633
or temporary labor, suggests a policy
direction aimed at shrinking the permanent

00:17:58.633 --> 00:18:03.293
civil service core while maintaining
flexibility through external support.

00:18:03.915 --> 00:18:07.126
Legislative Battle over
Collective Bargaining Rights

00:18:07.703 --> 00:18:11.324
A critical legislative maneuver
just preceding this reporting week

00:18:11.594 --> 00:18:15.834
sets the stage for a potential
shift in federal labor relations.

00:18:16.453 --> 00:18:20.124
A bipartisan coalition of House
lawmakers successfully completed

00:18:20.124 --> 00:18:25.094
a discharge petition on November
18, 2025, securing the necessary

00:18:25.094 --> 00:18:29.774
signatures to force a floor vote on the
Protect Americaâs Workforce Act (H.R.

00:18:29.774 --> 00:18:30.903
2550).

00:18:31.627 --> 00:18:32.097
H.R.

00:18:32.097 --> 00:18:36.727
2550, introduced by Representatives
Jared Golden (D-Maine) and

00:18:36.727 --> 00:18:38.377
Brian Fitzpatrick (R-Pa.),

00:18:38.868 --> 00:18:43.388
aims to nullify a pair of executive orders
issued by President Trump that cited

00:18:43.388 --> 00:18:48.108
national security to strip collective
bargaining rights from an estimated

00:18:48.108 --> 00:18:50.178
two-thirds of the federal workforce.

00:18:50.907 --> 00:18:54.838
These executive orders impacted
numerous agencies, including NASA

00:18:54.907 --> 00:18:56.487
and federal weather agencies.

00:18:56.967 --> 00:19:00.417
Although the orders have been tied
up in litigation, with previous broad

00:19:00.417 --> 00:19:04.838
court relief subsequently stayed,
this successful discharge petition

00:19:05.018 --> 00:19:08.867
represents a high-stakes legislative
challenge to the administrationâs

00:19:08.867 --> 00:19:10.957
core workforce management strategy.

00:19:11.678 --> 00:19:16.288
The outcome of the forced House vote,
expected to occur within or immediately

00:19:16.288 --> 00:19:20.558
following this reporting period, will
determine the near-term legal status of

00:19:20.558 --> 00:19:25.227
collective bargaining rights for wide
segments of the current federal workforce.

00:19:26.042 --> 00:19:28.972
And thatâs a wrap on this weekâs
Federal Workforce Roundup.

00:19:29.501 --> 00:19:33.582
The landscape for federal employees
and retirees is constantly shifting,

00:19:33.941 --> 00:19:38.212
with major decisions being made about
everything from pay and job security

00:19:38.582 --> 00:19:42.772
to retirement benefits and the very
structure of the civil service.

00:19:43.301 --> 00:19:45.631
Staying informed is your best tool.

00:19:46.012 --> 00:19:50.631
Be sure to subscribe wherever you get your
podcasts, so you never miss an update.

00:19:51.289 --> 00:19:52.370
Thanks for tuning in.

00:19:52.689 --> 00:19:55.399
Weâll be back next week to
track the latest developments

00:19:55.529 --> 00:19:56.740
and what they mean for you.

00:19:57.060 --> 00:20:00.110
Until then, stay engaged and be well.