Is the federal retirement system overdue for surgery?


For politicians seeking a long or lifetime career in Congress, Social Security has for some time been the third rail: Touch it and prepare for the shock of your life. It’s political suicide — too big and dangerous to even approach.

Unfortunately for career federal and postal workers, the Civil Service Retirement System and its successor Federal Employees Retirement System don’t have the same political juice. In fact, poking the CSRS and FERS plans year after year is believed to be a vote-getter in some places.

Some politicians, mostly but not exclusively Republicans, have been after FERS since it replaced the more generous CSRS program during the Reagan administration. CSRS covers most current government retiree and is a stand-alone defined benefit plan promising long-time employees a starting annuity equal to between 56 and 80 percent of final salary. And it’s fully indexed to inflation.

FERS covers most working feds and is more like a generous private sector retirement plan. It has a smaller federal annuity, Social Security and a 401K plan with an employer-match of up to 5 percent. FERS retirees are under a diet-cost of living adjustments system meaning they get smaller catch up with inflation than CSRS retirees.

When Republicans controlled the House up until 2018, plans to reduce or eliminate CSRS and FERS benefits came up every year. While very serious they fizzled partly because of a staunch defense mounted by a federal-postal-retiree coalition and partly because of the inability of Congress to get anything done. Can you say “shutdowns?”

This year Democrats control the House and many fed-friendly politicians are in key posts. They’ve pronounced the White House plan to trim back CSRS and FERS benefits as dead-on-arrival. We’ll see. Federal-postal-retiree groups say the five changes proposed by the White House would, if they become law, cost current and future retirees $177 billion over the next 10 years. That would come in the form of higher employee contributions and reduced inflation protection for CSRS retirees and no more COLAS — ever — for FERS retirees. So what next?

On today’s Your Turn radio show we have two expert guests to discuss the pros and cons of the proposed changes. Listen at 10 a.m. EDT on www.federalnewsnetwork.com or 1500 AM in the Washington, D.C. area.

Tom Burger, executive director of the Professional Managers Association, has been through this exercise before. He’ll run through the proposed changes and explain what each one would cost individual workers and retirees. And how the federal-postal-retiree coalition will play defense this year.

Later in the show we’ll talk with Jeff Neal. He’s a former federal executive who recently wrote a controversial column about the need for some prospective reforms in the retirement program to save money and also recognize ever-increasing job mobility in the federal government

Nearly Useless Factoid

By Amelia Brust

Overtoun Bridge in the village of Milton in Scotland is notoriously known as the “Dog Suicide Bridge” because of the nearly 50 dogs that have jumped off the structure to their deaths. Another 600 or so have jumped and survived, all on clear days and from the same spot on the bridge, and no one is sure why. The prevailing theory is the dogs get a whiff of a scent from minks which live below the bridge, and are attracted to it.

Source: VICE

Related Stories

Comments

Your Turn with Mike Causey

WEDNESDAYS at 10 A.M.

Learn about everything from pay, benefits and retirement, to buyouts, COLAs and pay freezes. Call the show live Wednesdays from 10-11 a.m. at 202-465-3080 with your questions. Dial 605-562-0264 to listen live from any phone. Follow Mike on Twitter and send him an email with your questions and comments. Subscribe on Apple Podcasts or Podcast One.

Sign up for breaking news alerts

THRIFT SAVINGS PLAN TICKER

Jun 18, 2021 Close Change YTD*
L Income 22.8950 -0.0718 2.88%
L 2025 11.7475 -0.0782 5.61%
L 2030 41.3301 -0.3582 7.07%
L 2035 12.3983 -0.1179 7.71%
L 2040 46.8639 -0.4865 8.36%
L 2045 12.8274 -0.1425 8.91%
L 2050 28.0756 -0.3333 9.49%
L 2055 13.7453 -0.2025 11.70%
L 2060 13.7453 -0.2024 11.70%
L 2065 13.7452 -0.2024 11.69%
G Fund 16.6073 0.0007 0.53%
F Fund 20.8808 0.0657 -2.22%
C Fund 62.4507 -0.8275 12.61%
S Fund 82.8816 -1.0758 11.60%
I Fund 38.5980 -0.6987 10.58%
Closing price updated at approx 6pm ET each business day. More at tsp.gov
* YTD data is updated on the last day of the month.