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CSRS vs. FERS: Somebody's Got it Made!

November 6, 2009 - 4:00am

If you are a federal worker under the old Civil Service Retirement System would you want your daughter to marry someone who is covered by FERS (as in the federal employee retirement system)? Could you handle it?

The news media is notorious (often rightly so) for inciting to riot and reporting with shock and indignation, on the horrors of, and/or the root causes of, riots and rioters. With that said (having hopefully covered by own personal backside) I would ask...

Is there tension in your office? Is there a generational divide that was maybe always there, but is all of a sudden getting worse?

Has the largess Congress has heaped upon the federal workforce, in the form of a whole lot of new and improved benefits, turned office mates against each other? Or at least caused people under the FERS retirement system to want what CSRS workers have. Or made older workers under the CSRS system envy the new improved benefits that have been given to their more numerous FERS coworkers.

When Congress set up the new FERS retirement system (to replace CSRS) it intended several things. One of them was to cut costs (like private sector employers) by requiring new entrants to the federal workforce to help finance their retirement. FERS provides a smaller civil service annuity which was to be offset by employees investing the maximum in the Thrift Savings Plan. To encourage FERS workers to invest their own money toward retirement they were given a match (worth up to 5 percent) from the government. They pay less toward their civil service retirement (than CSRS employees) but they contribute to Social Security (which CSRS employees don't.)

CSRS workers get a full cost of living adjustment each year regardless of their age. FERS employees get a COLA-minus 1 percent and that benefit doesn't start until they reach age 62. Next year nobody is getting a COLA but there may be a consolation prize.

And on and on.

FERS has some great features (the TSP and Social Security are portable and can be taken to another job outside government). CSRS employees make out only if they do a full career in government. Their TSP accounts can be transferred but their government time usually won't count in a new job with a nonfederal employer.

The CSRS benefit, fully indexed to inflation, is nearly twice as good as the FERS retirement annuity. But again, you gotta hang around for 20, 30, 40 years or more to get it.

Since the passage of the Defense Authorization Act we've been getting a lot of e-mails from FERS employees who say the new sick leave credit toward retirement is only half a loaf. They want what CSRS workers get, right now.

Some CSRS workers say it's unfair of the government to give FERS employees the matching 5 percent, tax-deferred contribution to their TSP accounts and deny it to CSRS folks.

Randy Erwin, the legislative director of the National Federation of Federal Employees, said on our Your Turn with Mike Causey radio show that it's all about the implementation costs. To read the full story, click here.

A few feds, from both systems, think Uncle Sam (that is Congress and the White House) are being unfair in the pay area. They are upset that Congress has okayed a 3.4 percent raise for members of the uniformed military, while it has apparently accepted a 2 percent raise (proposed by the administration) for white collar feds.

So are you hearing, or thinking, the same things?

Have the big improvements created a FERS vs. CSRS gulf in your office?

Or is this a tempest in a teapot?

Let us know: mcausey@federalnewsradio.com


Nearly Useless Factoid
by Suzanne Kubota

According to Smithsonian Magazine's "Top Ten Places Where Life Shouldn't Exist... But Does", Death Valley's Devil's Hole pupfish is "one of the rarest animals in the world. Fewer than a hundred were counted this year, and in 2006 its population was 38." So it sounds like things are improving... which is nice.


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