Learn how the new federal hiring freeze may affect your retirement
President Trump has placed a hiring freeze on the federal workforce; however, he does not specify how long it is to stay in effect. The order was given late January after his inauguration. It is the first of many moves the president plans to make to reduce the size of the federal workforce. The reduction in the federal workforce will happen by a percentage over a period of time that hasn’t yet been defined.
The memo bars filling any vacancies in the executive branch as well as the creation of new positions “except in limited circumstances.” However what these circumstances might be has also not been specified.
How does this affect my current employment status?
If your hiring has been finalized, it will not be canceled. However, agencies may need to reassign current employees in order to meet the highest priority needs first such as national security. Politically appointive positions including active duty personnel and the USPS are not currently affected, however the VA is included in the hiring freeze.
David Shulkin, President Trump’s nominee to take over the role of secretary for the VA, has in the past stressed the urgent need to hire more caregivers saying, “We have 45,000 job openings. I need to fill every one of those openings in order to make sure we’re doing the best for our veterans.” Shulkin has yet to comment on whether or not he will continue to uphold this viewpoint after he joins the Trump administration.
How long will the hiring freeze last?
There is no word yet as to how long this hiring freeze will last. However, in the past when hiring freezes were ordered, the OPM and OMB were required to produce a long term plan to reduce the size of the federal government’s workforce through attrition within 90 days. One such proposal is to fill only one of three vacancies until the workforce is reduced by 10%. This is projected to take 4-5 years. President Trump’s memo states that the hiring freeze will stop once a plan has been implemented.
How will the federal workforce reduction affect my retirement?
It is possible that the changes the president makes to the federal workforce could affect your retirement. House Government Reform and Oversight Committee Chairman Jason Chaffetz is hoping to enact broader civil-service changes that could replace federal pensions with retirement plans often used in the private sector. This could mean less options for you, or possibly more. In either case, it is important to consult with a professional who knows these options back to front, and can help you navigate them.
Before deciding to make a change to your own plan, contact our federal retirement specialists to discuss what choices are available to you. We are here to help guide you through the decision making process and answer any questions you may have.
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