FERS Flu In Your Future?

Had your flu shot this year? Are you exercising regularly, eating healthy? Well that’s great — but it may not help if you are in the majority Federal Retirement System and are even thinking about retiring.

Great minds who track socioligical trends, monitor possible epidemics, that sort of thing, are busy trying to connect the dots on what appears to be a growing problem.

Call it the FERS Flu.

The issue: Sick leave use among many previously disgustingly healthy civil servants appears to jump dramatically in the 12 month period before they retire.

There are a number of possible reasons for this. They include the natural aging process — new viruses in the workplace — a pre-retirement form of depression that lowers immunity. Some even think that once it is known someone is retiring that individual becomes a lame duck at the office. He or she is no longer in the loop. Or is not considered for promotion or training because they are self-proclaimed short-timers.

There is one other clue.

Most of the suddenly-sick employees are under the newer Federal Employees Retirement System. FERS covers virtually everybody hired after December 31st, 1983. FERS was designed to replace the old Civil Service Retirement System. CSRS is the best retirement plan in the nation for people who spend a full career (30 or more years) with the same employer — Uncle Sam.

But most people who come to work for the government (2/3rds) do not make it a full career. They spend time with a federal agency, then move to a job in the private sector. Or work in the private sector and join government later in their working life.

FERS was designed to be portable by giving employees a very generous 401(k) plan, with a 5 percent government match. Those who leave government can transfer their money out of the Thrift Savings Plan into a new company’s 401(k) plan if they like. And FERS employees get full Social Security coverage. Their civil service benefit (for which they pay less than CSRS employees) is not as generous as the CSRS formula.

There is one other significant difference between CSRS and FERS.

At the end of their careers, CSRS workers can apply the accumulated unused sick leave toward retirement. That can give them months, in some cases years, of “extra” service. That extra service time can boost their civil service annuity (which is fully indexed to inflation) for life. It’s a good deal and Congress did that to cut down on what investigators said was something similar to what is happening now. It appeared that many long-time, previously healthy employees were using their sick leave rather than losing it. So the system was changed.

While medical and scientific types pursue the possible biological or psychological causes of FERS Flu, pragmatists are looking at another cause and another potential cure. Coud it be, they wonder, that because they are under a use-it-or-lose it sick leave system, FERS employees decide to use it before they lose it? Could it be that simple? And if so, is there a cure?

Maybe.

There are a number of ideas being considered. Some think the solution would be for Congress to authorize some kind of compensation — a lump sum payment or credit toward retirement. Once the proposal is finalized (next year) it will then have to go through the regular legislaltive process.

Postal Buyout Rumor

Postal clerks in the Los Angeles area are being given the option to retire early. But the American Postal Workers Union says no financial incentives, such as a buyout or an enhanced retirement formula, go with the deal. This may be the source, at least this year, of the SuperBuyout Rumor in yesterday’s column. To check it out, click here.

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