[vc_row][vc_column width=”2/3″ el_class=”section section1″][vc_column_text]The last two instances in which retroactive pay was given to federal employees were in 2003 and 2004. If these past instances were to teach us anything, it’s that not only does it affect the recipient’s income, but also their benefits too. Since no laws in these regards have changed since that 2004 date, that means for the future, when receiving retroactive pay, you should expect the following:
1. A holding of contributions to your retirement and your taxes paid from the retroactive amount, at the standard rate.
2. Additional money could be withheld to match the higher premiums that come with Federal Employees Group Life Insurance Basic and Option B if the retroactive pay bumps the employee into the next $1000 tax bracket.
- Also Read: 3 Reasons Certain Federal Employees Can Retire Years Earlier Than Their Peers Without Penalties
- Also Read: CSRS Retirement in 2024: Are You Making the Most of What This Classic Plan Has to Offer?
- Also Read: Roth IRA Basics for Beginners: What’s There to Learn?
4. Employees of FERS and those TSP investors who are receiving a percentage based salary on retroactively held investments will get their matching contributions where it can be applied. But note, it won’t be payable for any earnings that are lost because retroactive pay is not subject to lost earning restoration. For those who contribute a specific dollar amount per pay period, there would be no noticeable difference here.[/vc_column_text][/vc_column][vc_column width=”1/3″][vc_single_image image=”36440″ img_size=”292×285″ style=”vc_box_shadow”][/vc_column][/vc_row]
