Escaping the golden handcuffs

When the Federal Employee Retirement System (FERS) was enacted in the 1980s, backers said it would save Uncle Sam money, make federal workers more self-reliant and give them job mobility when, as most did, they left government for the private sector.

FERS replaced the old Civil Service Retirement System (CSRS), which is outstanding — IF you spend a full career in government. It offered a defined benefit and a good pension fully-indexed to inflation — IF you stayed in government long enough. But for the two-thirds of feds who didn’t make a career of government, CSRS was almost lost time. Workers could get a refund of their retirement plan contributions. But they didn’t have anything — like a 401k plan or those all important Social Security credits — they could transfer to a private sector job. In some respects, their time in the federal government, rewarding though it may have been, was lost time.

CSRS was sometimes dubbed the “golden handcuff” program. It was designed to benefit lifers, not short-timers! After putting in X-number of years and when they started contemplating retirement, many people realized they had too much time invested to leave government. And they didn’t.

But that was then. And FERS changed that mindset forever.


Although most people who are retired are under the old CSRS program, most of the people working today in government are under the FERS program. They will retire under very different conditions than their CSRS counterparts.

For the few hundred thousand remaining CSRS employees, D-Day is getting closer. They’ve had a lot of birthdays, their kids (if any) are grown or nearly so, and rush hour traffic is not getting any better. Three years of a pay freeze and the political-media bashing of the federal workforce have also taken a lot of the fun (and value) out of working for Uncle Sam.

Earlier this week we warned people planning to retire to think again and to be sure they had a financial nest egg to carry them over until their full retirement annuity was approved and received. Lots of comment including this one from an HR official who says she sees first hand, every day, why people are leaving:

“I wanted to reply to your Wednesday article. I am a benefits manager/policy who gets to hear why people are leaving/retiring and who is handling their retirements. The CSRS who have reached their 80 percent maximum retirement are flying the coup. They see no increase in high three coming their way and they can retire, have steady income, and start a new career or go pursue their retirement dreams. The younger crowd are finding the government isn’t all they were hoping for and are leaving for the higher paying private industry jobs.

“The HR staff that are left behind are trying to process retirements. Every day I get a call from a human resource employee stating they are trying to process a retirement package and don’t know how to do the estimate for the package, don’t know anything about deposits or redeposit. Earlier this year I had a class on retirement processing and counseling which was taped for viewing at any time, and I still get calls going over the same thing that is stated on the video. HR employees have become more generalists over time, a jack of all trades and masters of none. This may be the new federal employee way, instead of doing your job well it will be do your job + one additional job to get by.

“On a side note, I have finished my Ph.D. classes and I am working on my dissertation; however, I love my job and can’t imagine not doing it. Once I reach my MRA in about 11 years, I would consider leaving for the private sector if the government can’t match my pay. Sequestration should be over by then!” — S

Email me at or comment on this article above.


By Michael O’Connell

How many holes does it take to fill the Albert Hall? According to the lyrics from The Beatles’ “A Day in the Life,” the answer is 4,000. But where did that number come from?

In the book “All We Are Saying” by David Sheff, John Lennon is quoted: “I was reading the paper one day and noticed two stories. One was about the Guinness heir who killed himself in a car. That was the main headline story. He died in London in a car crash. On the next page was a story about four thousand potholes in the streets of Blackburn, Lancashire, that needed to be filled.”

That information, according to Lennon’s “Anthology,” rattled around in his brain and resurfaced to become a lyric in the song. He also wrote the line “Now they know how many holes it takes …” to do something, the Albert Hall. But it took Terry Doran, a friend of Beatles manager Brian Epstein, to provide the verb “fill” to complete the line.



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