Credit Monitoring Encouraged by CFPB for Military & OPM Accepts Defeat on Retirement Cuts

September 20, 2018

[vc_row][vc_column width=”2/3″ el_class=”section section3″][vc_column_text]According to news reports, Jeff Pon, OPM Director tends to believe that a controversial proposal to cut federal employees’ retirement benefits does not stand much chance of becoming law.

On Monday the 10th September, Mr. Pon spoke at the annual conference of the National Active and Retired Federal Employees Association

As published in the Federal Times, Pon remarked that a proposal that he sent at the beginning of the year to House Speaker Paul Ryan to significantly cut several federal retirement programs was “highly unlikely to happen.”

Pon sent out a letter in May to Ryan proposing legislation to make a number of changes to federal employee retirement programs. The reforms were initially proposed last year as part of President Trump’s fiscal 2018 budget. The plan was to eliminate FERS supplements for employees who retire before Social Security kicks in at 62. The changes were meant to alter the basis of a retiree’s defined benefit annuity payments from their highest 3years of salary to their highest 5years. It also intends to increase the amount that the employees contribute to FERS by 1% annually until their share matches the government contribution.

Pon also suggests that cost-of-living adjustments for FERS retirees be eliminated and that Civil Service Retirement System COLAs be reduced by 0.5%

At the annual conference, Pon suggested that although he failed the first time, he still believes that changes need to be made to make federal retirement more affordable. The cost of federal health insurance notably increases each year by 67%.

“I want to make sure that for the next generation we’re taking a look at a different compensation plan,” Pon remarked, according to Federal Times. He felt that most of the federal employees do not see a 30-year career or a 20-year career, so the government needs to adapt to that.

Last week, the Consumer Financial Protection Bureau warned members of the military that they need to be attentive to monitoring their finances and credit score. “The Department of Defense will now continuously monitor the financial status of service members with security clearances,” CFPB wrote on its website.

CFPB said that at any time going forward, the federal employees, as well as the military members , could have their background reviewed to see if they have, in the past, failed to meet financial obligations. They will also check to see if there is an excessive accrual of debt or a high debt-to-income ratio. Any of these things could jeopardize someone’s security clearance.

The agency commented that it is really necessary for people to frequently check their credit report, and to set up fraud alerts as well as security freezes. In the event of any arising issues, one should file a complaint to CFPD.

Acting Director at CFPD, Mick Mulvaney, is considering quite a few changes to roll back enforcement of provisions of the Military Lending Act. Some of the proposed changes include stopping proactive monitoring of payday lenders to prevent them from violating the Military Lending Act and stopping auto lenders from adding overpriced gap insurance onto auto loans.[/vc_column_text][/vc_column][vc_column width=”1/3″][vc_single_image image=”34602″ img_size=”293×286″ style=”vc_box_shadow”][/vc_column][/vc_row]