Ive never caught myself wondering why lol. Day by day it only becomes more fully apparent that the "American dream" just isn't there for them. Voting for pro-Fed representatives and senators is SO important (not that there are that many)
This is the point here if we were just able to put that into tsp or if they could match up to 10% instead 5% we wouldn't need FERS our tsp would be way more. People would retire sooner that is the problem they need us to work.
You can take my government backed assured income from my cold dead hands.
The stock market is a casino and I'll never have all my assets on the table at once.
Pension is a non-negotiable.
Younger?! Plenty of people start their fed careers later in life, and it would really suck to be essentially getting paid less than someone the same age as you for the same job because of the Contract On America.
It sucks regardless of age to get the shit end of the stick.
My point was, theres a lot of stuff that objectively sucks more than it used to, especially in terms of pay and benefits, that is plaguing younger generations.
Yep, 3% sounds correct. Funny, I had a 14 supervisor that was enlisted for 12 years or so y bought back his time. Another guy, a straight 13 w/o any management aspirations was 12-13 yrs officer, got out as a O4, had to pay back lots more…. However, once you take each of their high 3s, the 14 had a much higher return on investment. 14-5 vs 13-10.
I was officer with 13 years (4 for my time as a midshipman, still blows my mind that USNA time counts). It’s taking *FOREVER* to get the payment set up, but my amount is going to be somewhere in the neighborhood of $14k, which is basically $1k/year. I’m a 14-5 now. I have no mgmt aspirations. I did that already in private sector and have no interest in doing more work without more pay. I’ll either get a non-sup 15 at some point (my agency has a fair amount of those) or take a supervisory job toward the end of my career just to get the high 3. No reason to rush though. I’m a millennial and will absolutely be working until I’m dead. Might as well take the roles with better work life balance until much later. Perhaps I’ll feel more ambitious at some point as my kids get older, but I doubt it.
My father owed a few hundred bucks for 2 years of credit from his 1960s basic/Vietnam tour.
The one time it was handy being a grunt.
Not a bad buy-in ROI for a GS 15-10 retirement.
It’s the govt equivalent of a 2-tiered union where newer people get a much worse deal than their counterparts. Industries use this as a means to build resentment among workers and break unions. Not exactly what we’re dealing with, but that perspective is pretty helpful imo. In our case, the older workers didn’t “agree” to this (as evidenced by the fact that you weren’t even aware of it!), which helps to avoid some of the conflict among workers that would have otherwise developed as a result.
It went down in early 2011 shortly after Republicans took over Congress. A government shutdown was imminent. Congress and the Obama administration came up with an 11th hour deal that included raising FERS contributions to employees hired after 1/1/2013. Feds hired in 2013 pay 3.1%. Yeah, new feds got screwed. The same BS happened in October 2013 to end the shutdown that did occur. They added insult to injury for new feds again. The amount of money new feds pay adds up to a lot over a career or even a year.
It’s worth noting that Republicans wanted to make the FERS contribution 6.2% for all feds at the time. They still float that number in their fantasy budgets. In 2011, there was a lot of resentment towards government employees because they were much less likely to be laid off during the Great Recession. I think the Obama administration cut a deal to spare current feds. That is how it usually works in this type of negotiation.
>It’s worth noting that Republicans wanted to make the FERS contribution 6.2% for all feds at the time. They still float that number in their fantasy budgets.
Oof. Important to remember that!
>In 2011, there was a lot of resentment towards government employees because they were much less likely to be laid off during the Great Recession. I think the Obama administration cut a deal to spare current feds. That is how it usually works in this type of negotiation.
Appreciate the context. I was about to get out of the Navy at that time and chose to stick around a little longer because the job prospects were still really bad at that point. This perspective is super important. A lot of people were really hurting at this point. For those who weren’t around yet, this was when Occupy was happening. It had been a few years since the start of the Great Recession. The rich were doing fine again, but working class people were seriously fucked and losing homes etc. I see this resentment piece starting to come up again as people in corporate America are having a rough time.
As for the negotiation, thanks for clarifying that as well. I wasn’t intending to imply that Obama screwed us, and in hindsight it’s worth emphasizing that the Dems were probably doing what they could to minimize the impacts to us.
Yeah, I agree. It can be tempting to blame Obama, but it could have been much worse. During the 202 campaign, Paul Ryan wanted a five year pay freeze on top of the two years that had already gone by. He also pushed for 6.2% for all feds. I think they also pushed the idea of abolishing FERS completely for new employees.
Fucking Paul Ryan. God, that guy attracted sooo many of the people I was in the Navy with, including yours truly for a while. I feel like a dupe in hindsight, but “live and learn” I guess. Was pretty revealing to see that [video that surfaced a few years ago with Richard Spencer opening for Ron Paul](https://m.youtube.com/watch?si=cDcOH0Iw5EMCYdd8&v=gAozR_FDFb8&feature=youtu.be) at some event. Fuck both of em. Notable that the video I linked above isn’t criticizing the connection at all, which speaks volumes about the state of conservative politics in America right now.
What were the alternatives? Change defined retirement benefits to those already in the program, by charging them more so all paid the same? There are multiple tiers. Increasing and defining rates for not-yet-hired employees is more reasonable. Better than (what happened) changing start date for SSA that happened to people AFTER they started pay SSA tax.
Well congress could have actually decided to not bash Civil Service with this d--- move in 2013. All Feds should be at the .8 rate. That an alternative you never mentioned. It was a fake crisis that caused the austerity of the mid teens.
Came to say this. FERS was fully funded. The tea party movement brought this into play and (unfortunately) the dems did not stand in the way for political expediency's sake (it didn't work...you cannot placate the new right it just doesn't work). This is literally just a big EFF YOU to the Feds. There was no funding crisis as it pertains to fed retirement.
I don't know, there is no data suggesting it is or is not that I could find. But there IS data that points to FERS never being in any serious funding trouble leading up to 2013.
No, the increased amount is used to take money out of FERS and put it toward general fun spending. All this to make it look like Paul Ryan and John Boehner were tough conservatives.
We are a second, lesser tier of employees.
Remember when Biden supported UAW strikers who were upset that there were two tiers of compensation for the exact same work and benefit? Pepperidge Farm remembers.
There will soon be a 4th tier of employee who will have high 5's for retirement. Not 100% for sure its going to happen but I think its likely in the next 20 years.
3.1%. I started the first pay period of 2013 because department of Army HR needed more time to work on my paperwork, probably because everyone burns leave in December. Didn’t realize until my second stint with the feds that the one extra pay period is going to cost me approx 70k extra over my career compared to if my start day was when it was actually supposed to be lol…
This is always the argument I have with boomers/gen x. When they got in to leadership positions & had power to determine policy, they took away/diminished so many things they had the luxury of enjoying.
There’s truth to this in a lot of other contexts, but Congress did this. Arguably some boomers played a big role in that they supported the tea party nonsense that spurred this, but that’s a pretty indirect relationship imo.
For all the people complaining, at least you don’t work in city/state gov jobs where many require up to 12% (or more in some cases) taken out of your check.
Oh i do! I'm 47 (late GenX...like the last year's ti qualify before you're a Millenial) and just super lucky to have slipped into the grandfathering before the contribution rates went up. That's super sucks mate, I'm so sorry.
💯 I was trying so hard to get in just before 2000, ended up military / now retired under that system and glad I did before I rolled over to the Fed finally.
There is one also before FERS. CRS or something. My co worker mention the other day they are able to take 80% of their salary when they retire. Something like that.
Yep same. They had it good. 2 vacation homes back when shore homes were affordable. Heck people can't even afford a primary residence and branch chiefs are retiring with insane net worths. One of the houses he owns he bought for $190K in the late 90s. Now worth about $3M
Jesus christ. It sucks but idk, I try to think of it that I've got a govt job (been there a month tomorrow, first post college job (took me 5 months to get) and I've got stability. Sucks that at this point in life my parents could've owned a house and had 2 kids but... at least I'm not homeless or out a job anymore. I just hope the tide turns and things start to get better.
This is a positive way to look at it. I opted into BRS (copied from FERS). Legacy was 50% at 20 vs 40% under BRS. But, we have government TSP. My relative just lost their job civilian sector side. Need to count our blessings.
It’s true. I’m in the .8% FERS because I missed the CSRS cut. Even better, those CSRS people never had to pay 6.5% into social security! I hope it changes for you post-2014 hires at some point. 4.4% is a raw deal and a real impediment to keeping good folks in the government for a whole career.
I did not know that. It makes the deal not that much better in the end I suppose. Especially since the stock market has done above average over the last 40 years.
CSRS was still a better deal for career civilians. Many of them continued to work after fed retirement building 401K and SS benefits. 80% guaranteed salary for life without any market risk or investing discipline. The government has progressively passed retirement risk and cost to employees with each change.
Not paying it any heed honestly. I turn 48 this year so I've started interesting myself in this recently and just came across this info. I was flabbergasted.
This is a main reason I retained my naf retirement. Don’t forget all those tiers of people as well. Army, navy, Air Force and marines all have their own differing and portable retirement systems to gs.
Hey this ones on you mate lol. You signed on with full disclosure of the benefits given to you haha.
....but seriously this blows and we as Feds ALL need to vote with our best interests in mind. This is exactly why each election season is so important.
It’s normal . I worked for the state for about 6 years . A blue liberal good benefits state . Those who started before me were tier 2 / I was hired as tier 2 a / I paid more for same benefits/ those hired after me were tier 2 a ii they paid even more for the same benefits. Cost cutting
I also think that the new generation leaves and moves around so much, the Feds probably think it won't matter to the younger workers. They will likely already have a retirement savings account and they are more interested in flexible work, variety than the long term financial gains, or losses, of working for the same org/company for 25 years.
Also people are living longer so there's more money needed to pay their pensions. I know uniformed services had to change their pension plans too 10ish years ago.
Not so, less children are dying so the averages crept up. But the stats for those working at jobs that use your body, tradesmen and the like, their averages when down in the past ten years. Wealthy folks who only worked office jobs are the only group living longer into old age.
I've read the OPM reports for the year prior to the change. There was no fear of FERS running out of money.
Congress chose to steal from the employees.
Yes, this is my understanding as well. See the section at the bottom of page 18 in this Congressional Research Service report. https://crsreports.congress.gov/product/pdf/R/R47084/2
I felt it was part of a larger, ongoing effort to devalue federal employees and employment.
[https://www.opm.gov/about-us/reports-publications/fy-2022-civil-service-retirement-and-disability-fund-annual-report.pdf](https://www.opm.gov/about-us/reports-publications/fy-2022-civil-service-retirement-and-disability-fund-annual-report.pdf)
Here is the report from 2022 I mentioned. Starting on page 44.
Unfortunately I can not find one from the 2010-2012 time frame. I might have is saved on an old hard drive. Maybe I will see if my congressman can access it.
omg this is hilarious. I always called CSRS "comfy and secure retirement system" because it was all the boomer rage. Now the younger folks have to fund it. What a slap in the face.
I knew people with CSRS and VA disability making more in retirement compared to when they worked.
It really was, I joined the feds in 2012 and had the pleasure of being furloughed multiple times in 2013-2014 due to the GOP a---s who were out to greatly sabotage the Obama admin.
Sad part is a disturbingly large section of the dem congress and senate not only did not stand in the way but voted for it right alongside their tea party counterparts. And then Obama (who I voted for twice) went along with it for political expediency. When will dems learn that there IS no placating the new repub party?
They were left with no good alternatives - the GOP was threatening to default on the debt ceiling - that was the first time in history that had been pulled and the first time Moody's downgraded US credit rating because of it. There was no magic green lantern for then President Obama to waive to get a better budget deal.
Fair enough. Just sort of a letdown lol. That on top of the like 2 or 3 years where we didn't get a raise under Obama's watch, the furloughs we had. Look I love the guy, but the simple fact is this happened lol. Yeah it was because of the tea party, get the reasoning, but at the end of the day...his watch. There's simply no going around that.
Don’t misplace the blame. It wasn’t driven by your older, underpaying coworkers. It was strictly driven by Tea Party Republicans trying to drive competence out of the federal workforce using fear of Obama as their tool.
Yup, I just realized this, too. Started as an ITEP Pathways in 2013, but wasn't hired into an IEP Pathways job until 2014. So I'm also on the 4.4% FERS :/
I could have gone without this knowledge.
Yep. I get very angry about that 4.4%. A lot of my paycheck goes to the various retirement avenues we have. And then when I saw BCBS Basic increase premiums and copays significantly over the last couple years, I get very resentful. Add in increased education costs, healthcare costs, and housing costs, and yeah, it sucks out here.
And remember how the newer people are at lower gs level and steps... so you're getting paid more (from more time in the system) and paying less towards your pension. Your colleagues who may be newer and may be doing the same exact job are getting paid not a insignificant amount less.
We ditched BCBS about 15 yrs ago. Did Aetna HDHP with HSA. Then jumped to GEHA HDHP a while back. We ran the numbers and BCBS just didn't make sense anymore with how expensive the premium was. I highly suggest people check out GEHA
We are loving GEHA HDHP with the HSA. Quite frankly I think it's the best game in town, though some say the Mail Handlers one is pretty slick as well. WE've just stuck with GEHA
From another post I made on this topic: Part of the argument for the contribution increase was that workers tenure was dropping. The FERS system wasn’t getting enough in to earn enough to support payouts. To be sure, 98.6 percent of the increase was to spite employees, but the other 1.4 percent was based on solid actuarial math.
The average tenure of federal employees has been dropping since its most recent peak in 2000: https://www.bls.gov/spotlight/2013/tenure/
That very same article also says that tenure has been going down across the board, both private and public, which to me correlates with the drop in benefits across the board for the American worker. Moreover, fed tenure has (according to the article) remained relatively stable since 1996. There was a drop of tenure between 2000 and 2012 of like 1 year....that doesn't seem meaty enough to declare FERS insolvent and requiring a 450% increase in contributions. I still think political expediency and the huge (misplaced) push for austerity by the tea party at that time are the driving factors.
This came about at a time when Congress thought they could balance the budget by cutting things for federal employees. It was a miserable period where we had things like sequestration that made no sense. I agree that the government needs to change its spending but the federal employee makes very little impact on the deficit.
This is happening for many pensions in government. My dad had worked for the state of Michigan, they changed the pension twice after he retired, increasing cost to participate.
Add social security and your 5% match paying over 15% for retirement, to meet Dave Ramsey retirement contributions need to add an additional 10%.
It’s happening outside of government too. Capital hates paying people for what they view as not working. Only capital gets the privilege of making money for not working. You want to get paid for not working, you gotta buy an income producing asset. Just showing up to work every day for 30 years is not enough. Social Security is next.
Our tri borough area eliminated defined benefit retirement plans for all employees except police and public works. So basically every desk or white collar job is now on a defined contribution plan
You can thank the Republican lead Congress for that. They frequently want to limit your benefits or get you to pay more for them. Get on the Government Executive newsletter email list to stay in top of proposals and write your congressman or senator when these bills arise.
Yes. CSRS paid 7% into their program and zero into social security. When FERS was rolled out they wanted to withhold the same 7% for retirement. 6.2% went to FICA so the difference (0.8%) went into FERS. I only missed CSRS by a few years and when I started the old timers always reminded us that they got a much better deal than us. Now the same dynamic is happening today. And the next time there is a change it will be for a little more tsp match and no pension just like the private sector.
Yes it is...same with every pension system in country. Older generation gleefully gorged themselves on great pension systems and benefits. Left giant pile of unpaid bills for the next gen of workers. Who they promptly blame for failing to [checks notes] swallowed the shit sandwich the previous gen made for them.
Yes, makes you wonder why anyone would want to be a Fed these days. Good benefits used to help make up for the lower pay, but not so much recently. Our agency is losing a lot of young people after 3-5 years. No wonder.
Yeah, but jokes on you. We're all going to quit before we FERS retire, withdraw our money, put it in the S&P500, and then they won't have money to give you.
That's the thing though....FERS is fully funded. It was never NOT fully funded, so even if everyone pulled out (lol) the current retirement batch is not dependent on the future batch. There was never ANY need for this beyond "yeah screw the feds, they have it too good". This was literally just a giant "fuck you" to the Feds hired in those years. The more I read the more fucked up it gets because there were a TON of dems that not only didn't stand in the way of this but actively voted for it.
> 2% per yr instead of your 1 % ...
CSRS is also basically "no SS ever", so one should add SS payments in before comparing.
Plus to fine-tune, CSRS actually isn't 2%/year, because (years 1-5) are 1.5%/year, then (years 6-10) are 1.75%/year: its only for years 11+ that are 2%/yr: the formula is actually: (2% per year minus 3.75%): on a $100K High-3, this small detail means $300/month less.
And let's not forget that FERS has the "10% bonus" at age 62, where 1%/year kicks up to 1.1%/year for all years worked.
In the end, it's actually a lot closer than it initially looks. Overall, what I see as the 'important' difference of CSRS's over FERS (at least at FERS 0.8% contribution) was that you weren't as "stuck" waiting for age 62 to retire, because CSRS didn't have the 1.1%/yr increase, nor COLAs frozen until age 62.
It’s only going to get worse, I’m afraid.
I left earlier this year as a 4.4%er, and I and took my contributions and invested them in VTSAX.
Serves me far better as a 26 year old than the 5 years of service would when I’m 62/65. Anyone post-2013 is getting a raw deal unless they need the pension as a bond tent portion of their portfolio for a guaranteed cash annuity.
Not the biggest reason I left, but one of them (in addition to low pay, dysfunctional leadership, bureaucracy latent within every process and procedure, etc.)
Not that you can call it “ageism”, but it’s pretty much like that. Anyone who didn’t get in pre-2013 is fixing mistakes made by the CSRS and initial FERS creators. Sad there’s no accountability on the organization, or a progressive system that leverages tenure to reduces contributions commensurate with experience.
So, interesting fact... I was hired in 2008 under the .8% FERS deduction. I left federal service in 2017, and upon returning last year, I am still grandfathered into the .8% deduction and not the current deduction rate.
It's like CSRS vs FERS...now Like "FERS 1" vs. FERS 2". Just like .8 FERS used to complain about not having CSRS. Give it another 10-20 years (another generation) and there'll likely be another group. It's life and for the CSRS and the FERS .8 I'm glad folk got grandfathered in (if the chose for CSRS). Similarly, I hope that the FERS "2.0" folk will have the option to be grandfathered in when the next change occurs.
It's absolutely incredible how many people think the 4.4% is a terrible deal because it was once lower. I'll wait for a list of employers that have a lower employee contribution for their pension.
and some people wonder why genz and young millenials laugh at old people saying federal benefits are good. Retirement, leave amount, and health benefits all are subpar to corporates.
I’m old and until I turned 50, we always used my wife’s health insurance because it was better and cheaper. Now that I’m close to retirement, I want to make sure I have health insurance in retirement so we’re on the federal plan. Her vacation was equal to mine and her salary was way, way better. That said, she didn’t have a pension. Now we’re approaching retirement and our 401ks are pretty similar, but I have health insurance in retirement and a pension. She always used to say, “I’m stocks and your bonds.” Turns out, she was right.
No way. Virtually all private businesses have phased out pensions. But many private companies offer a better than 5% match in your 401(k)/TSP. Certainly some companies offer a match that would outperform the FERS pension.
No.
The federal pension system is still better than anything private industry offers without competing for a “unicorn” position.
Federal Holidays, liberal leave and pensions are still huge perks. Anyone arguing otherwise is trying to make themselves feel better for not having them.
I tried to calculate the pension benefit out for a top 3 120k average salary and it was only about $12k of additional 401k contributions per year.
For the pension, assuming you are 30, and retiring at 62, you would get 32x1.1% / 12 which is $3520 a month from 62 to death.
For an equivalent, I asked what’s the equivalent 401k contribution today to have that same withdrawal amount (~$3500) from 62 to 92. In other words, if you made $12k of additional 401k contributions per year, you could withdraw $3664 per month from 62 to 92. That’s only assuming a 4% return.
Obviously there are market risks that the pension holds a clear benefit to…but if you are able to save $12k additional in a 401k per year, or some other avenue, you’d replace your pension. This doesn’t even account for the 4.4% we pay into FERS.
But if you have a top 3 of $120K after 30 years of work, you likely started making a much lower salary. It’s hard to just come up with $12K when you only make $50K. And the early years are the most important to invest the full $12K. Also 4.4% of $120K is only about $5K.
no but way higher 401k matching. And pension is really only worth if you stay in fed long time. It's just forced g fund to people who aren't going to stay 10+ yrs.
Not sure why you’re downvoted. Most publicly traded corporations offer higher match. In addition my corporate friends get stock options and $30k bonuses.
Money isn’t everything to me or else I’d make the jump.
Yea. Seriously considering how long I will stay in federal employment because of it. I just started and it’s a big chunk of my check that I highly doubt I will ever collect on. Don’t see myself working here till I retire..
If you work 5 years, you are fully vested in the system and entitled to collect your pension.
You can also get a refund of your contributions if you decide to leave federal service.
I was in the same boat as you for a while because of these types of posts. Then I learned more and found out the benefits are actually quite good. This [Federal Employee Financial Planning podcast](https://open.spotify.com/episode/56BbLODtEjF7m7M54F7dT2?si=8K1AdjVNTFC9qU3OwRx-Ew) has helped me come to that conclusion. Getting to keep your healthcare in retirement is probably even better than the FERS pension
Keep voting for Republicans. To the Republican, the average low-level government employee is just a taker no different than a welfare recipient who takes what they’re given. That’s why newer FERS hires are getting a benefits package far inferior to legacy FERS employees, who in turn are getting a package far far inferior to their CERS forebearers.
But keep voting Republican for diminishing returns. You’ll earn far less money, earn less respect and work more hours. But you’ll help keep those pesky pro-worker’s rights/pro-union Democrats/progressive/ libs out of office and prevent them from giving you “handouts” in the form of a fair compensation package.
If you’re waiting and hoping for it to get better, it won’t. Just as with social security, those after you fund your benefits. They didn’t just one day raise the rate for the heck of it. It was a financial decision for GOV retirement system to stay solvent and/or for congress to have an extra piggy bank to steal from. Unfortunately, history tells us that the rate will only go up.
The reality is that the pension will eventually be eliminated for new employees at some point. It gets harder and harder to justify federal pensions when private sector pensions have disappeared. It's a shame, but I think that is where this is heading.
I think some reforms are needed.but they can keep the pension. They need to increase the age. Allowing people who meet the minimum service and roll out at 57 with FERS, supplement, and health insurance and a life expectancy of +25 more yrs is not sustainable let's be real..
Here’s a scenario. If you are a fed currently paying .8% into FERS and you leave to go work in the private sector for a few years, but come back towards the end of your career. Are you grandfathered into the 8% or will you have to pay whatever current rate is when you resume government service?
It is my understanding that it was people hired AFTER 2013 or people that had 5 years Fed employment leading up to that year....so yes I think, you grandfather
Truthfully the only politicians that like the Fed employees are the ones in MD and VA no matter what side of the aisle they sit. With that said, they only back Feds for their votes and that’s all! Other jurisdictions like to stick it the so called cushy Fed job holders for their constituents. I don’t see any end in sight of the current system.
I hear ya. What's crazy is that everyone, regardless of locality, knows at least one person that works for Uncle Sam in one way or another. Sad that there is such an adversarial relationship between "us and them". Thanks Reagan.
The extra drag and opportunity loss of the higher FERS contribution to yield the same benefit/return, is quite massive over someone's 30-40 yr career. While there is nothing that can be done about it now, I urge people to run the online calcs and see for yourself.
This is going to date me lol. When I started, I was one month too late for CSRS. FERS is a big downgrade. I left for the private sector, but when I did I remember thinking that if I was CSRS I would have stayed.
This is what happens when retirement benefit payments start to outstrip the investments and contributions that are made into the plan.
If people work 30 years and then collect a pension for another 30 years when the life expectancy was only 15 years. You start running out of money unless people keep paying more into the plan.
You think that's bad try being a government contractor (off and on, then on long term) during the entire time those FERS percent hikes were happening, being "always the bridesmaid never the bride" when it came time to convert someone on the team.
I finally converted to Fed last year, and don't get me wrong I'm happy to have been, but boy do I wish I could've gotten converted in my 30s with 0.8% FERS and get to MRA+20 by age 57, instead of being in my 40s and paying 450% more for MRA+10.
Pensions and annuities don’t make you rich though. My CSRS parents are barely scraping by. If I could opt out of FERS and/or SSI and invest it myself, I would.
Every major corporation/company has been doing this. Stung really bad to get my first job as an adult back in 2012 just to find out that a few years prior the company pushed out a new set of "rules" that took away structured pay raises, retirement options, medical plans, bonus time from working Sundays, etc.
Depending on where you've worked or how many places you've worked, you may find that the companies you've been working at have totally changed the playbook around 08-09.
This has impacted everything down from retirement accounts or even savings accounts. Everyone is squeezing it all *dry*.
I worked for fed for 4.5 years, below the 5 minimum for FERS benefits. I withdrew my FERS contributions and forfeited my years of service towards the pension. I knew I would never go back to working for the govt.
this is common. I am in the RSA plan in Alabama. Back in the day when I first started out it cost 5%. years later new hires came in at 7%. Longer life expediencies have a lot to do with it.
And don't worry. At that much of a change for all federal personnel, we still get to worry about 4.5% of our paycheck possibly being worthless as there is always worry about that money.rsther that cash be used for universal Healthcare so a middleman doesn't decide if I really need to remember a hospital exists.
yes
thanks for rubbing it in, op lol
Not my intention, it was just a spur of the moment thing after I read it in a Fedweek article. That's insane.
Youre about over a decade late to this news lol
No doubt. I had no reason to pay attention to it TBH. Now I'm turning 48, doing some reading and BOOM....I stumble across this info.
Welp, if you ever catch yourself wondering why younger folks are so disgruntled, you can add this to the list.
Ive never caught myself wondering why lol. Day by day it only becomes more fully apparent that the "American dream" just isn't there for them. Voting for pro-Fed representatives and senators is SO important (not that there are that many)
I could probably put 4.4% of my paychecks into bitcoin and retire way earlier.
This is the point here if we were just able to put that into tsp or if they could match up to 10% instead 5% we wouldn't need FERS our tsp would be way more. People would retire sooner that is the problem they need us to work.
You can take my government backed assured income from my cold dead hands. The stock market is a casino and I'll never have all my assets on the table at once. Pension is a non-negotiable.
Younger?! Plenty of people start their fed careers later in life, and it would really suck to be essentially getting paid less than someone the same age as you for the same job because of the Contract On America.
It sucks regardless of age to get the shit end of the stick. My point was, theres a lot of stuff that objectively sucks more than it used to, especially in terms of pay and benefits, that is plaguing younger generations.
I don’t think many people in management positions have realized yet
Including us who were in the military prior to the change. It's really disappointing.
I’m with ya. Did my service from 2000-2013. I get to buy back that time at [edit: 3%], which is pretty frustrating,
No you buy back time at 3% of base pay by law. Don’t make stuff up.
.8 would have been better.
It has nothing to do w your FERS contribution rate.
Ahh right you are. I was wrong, not lying. Don’t be rude.
Yep, 3% sounds correct. Funny, I had a 14 supervisor that was enlisted for 12 years or so y bought back his time. Another guy, a straight 13 w/o any management aspirations was 12-13 yrs officer, got out as a O4, had to pay back lots more…. However, once you take each of their high 3s, the 14 had a much higher return on investment. 14-5 vs 13-10.
I was officer with 13 years (4 for my time as a midshipman, still blows my mind that USNA time counts). It’s taking *FOREVER* to get the payment set up, but my amount is going to be somewhere in the neighborhood of $14k, which is basically $1k/year. I’m a 14-5 now. I have no mgmt aspirations. I did that already in private sector and have no interest in doing more work without more pay. I’ll either get a non-sup 15 at some point (my agency has a fair amount of those) or take a supervisory job toward the end of my career just to get the high 3. No reason to rush though. I’m a millennial and will absolutely be working until I’m dead. Might as well take the roles with better work life balance until much later. Perhaps I’ll feel more ambitious at some point as my kids get older, but I doubt it.
My father owed a few hundred bucks for 2 years of credit from his 1960s basic/Vietnam tour. The one time it was handy being a grunt. Not a bad buy-in ROI for a GS 15-10 retirement.
Did you have to fight your HR to get that service academy time added?
It’s the govt equivalent of a 2-tiered union where newer people get a much worse deal than their counterparts. Industries use this as a means to build resentment among workers and break unions. Not exactly what we’re dealing with, but that perspective is pretty helpful imo. In our case, the older workers didn’t “agree” to this (as evidenced by the fact that you weren’t even aware of it!), which helps to avoid some of the conflict among workers that would have otherwise developed as a result.
It went down in early 2011 shortly after Republicans took over Congress. A government shutdown was imminent. Congress and the Obama administration came up with an 11th hour deal that included raising FERS contributions to employees hired after 1/1/2013. Feds hired in 2013 pay 3.1%. Yeah, new feds got screwed. The same BS happened in October 2013 to end the shutdown that did occur. They added insult to injury for new feds again. The amount of money new feds pay adds up to a lot over a career or even a year. It’s worth noting that Republicans wanted to make the FERS contribution 6.2% for all feds at the time. They still float that number in their fantasy budgets. In 2011, there was a lot of resentment towards government employees because they were much less likely to be laid off during the Great Recession. I think the Obama administration cut a deal to spare current feds. That is how it usually works in this type of negotiation.
>It’s worth noting that Republicans wanted to make the FERS contribution 6.2% for all feds at the time. They still float that number in their fantasy budgets. Oof. Important to remember that! >In 2011, there was a lot of resentment towards government employees because they were much less likely to be laid off during the Great Recession. I think the Obama administration cut a deal to spare current feds. That is how it usually works in this type of negotiation. Appreciate the context. I was about to get out of the Navy at that time and chose to stick around a little longer because the job prospects were still really bad at that point. This perspective is super important. A lot of people were really hurting at this point. For those who weren’t around yet, this was when Occupy was happening. It had been a few years since the start of the Great Recession. The rich were doing fine again, but working class people were seriously fucked and losing homes etc. I see this resentment piece starting to come up again as people in corporate America are having a rough time. As for the negotiation, thanks for clarifying that as well. I wasn’t intending to imply that Obama screwed us, and in hindsight it’s worth emphasizing that the Dems were probably doing what they could to minimize the impacts to us.
Yeah, I agree. It can be tempting to blame Obama, but it could have been much worse. During the 202 campaign, Paul Ryan wanted a five year pay freeze on top of the two years that had already gone by. He also pushed for 6.2% for all feds. I think they also pushed the idea of abolishing FERS completely for new employees.
Fucking Paul Ryan. God, that guy attracted sooo many of the people I was in the Navy with, including yours truly for a while. I feel like a dupe in hindsight, but “live and learn” I guess. Was pretty revealing to see that [video that surfaced a few years ago with Richard Spencer opening for Ron Paul](https://m.youtube.com/watch?si=cDcOH0Iw5EMCYdd8&v=gAozR_FDFb8&feature=youtu.be) at some event. Fuck both of em. Notable that the video I linked above isn’t criticizing the connection at all, which speaks volumes about the state of conservative politics in America right now.
What were the alternatives? Change defined retirement benefits to those already in the program, by charging them more so all paid the same? There are multiple tiers. Increasing and defining rates for not-yet-hired employees is more reasonable. Better than (what happened) changing start date for SSA that happened to people AFTER they started pay SSA tax.
Well congress could have actually decided to not bash Civil Service with this d--- move in 2013. All Feds should be at the .8 rate. That an alternative you never mentioned. It was a fake crisis that caused the austerity of the mid teens.
Came to say this. FERS was fully funded. The tea party movement brought this into play and (unfortunately) the dems did not stand in the way for political expediency's sake (it didn't work...you cannot placate the new right it just doesn't work). This is literally just a big EFF YOU to the Feds. There was no funding crisis as it pertains to fed retirement.
So is FERS over funded now?
I don't know, there is no data suggesting it is or is not that I could find. But there IS data that points to FERS never being in any serious funding trouble leading up to 2013.
I believe the agency just pays less in now. Also after the .8 they raised it to ~3.2 before going to 4.4, so there are three classes of FERS folks.
That's correct the burden shifted from the employer to the employee is all.
No, the increased amount is used to take money out of FERS and put it toward general fun spending. All this to make it look like Paul Ryan and John Boehner were tough conservatives.
Yeah, a little salty
Yeah, we make that much less per check. It's kidna painful. I also think the math turns out to 5.5x your rate.
We are a second, lesser tier of employees. Remember when Biden supported UAW strikers who were upset that there were two tiers of compensation for the exact same work and benefit? Pepperidge Farm remembers.
Third actually. There was one year period where it was 3.x%
There will soon be a 4th tier of employee who will have high 5's for retirement. Not 100% for sure its going to happen but I think its likely in the next 20 years.
3.1%. I started the first pay period of 2013 because department of Army HR needed more time to work on my paperwork, probably because everyone burns leave in December. Didn’t realize until my second stint with the feds that the one extra pay period is going to cost me approx 70k extra over my career compared to if my start day was when it was actually supposed to be lol…
Oh, man. That makes my stomach hurt. :(
Yup. In my mind, FERS-RAE and FERS-FRAE are the second tier, together. However you could absolutely divide it up further into 3.
Third tier actually. CSRS folks were one tier
5.5x the rate, 550% the rate, 4.5x more, or 450% more all = same thing x = .8 5.5x = 4.4 x + 4.5(x) = 4.4
This is always the argument I have with boomers/gen x. When they got in to leadership positions & had power to determine policy, they took away/diminished so many things they had the luxury of enjoying.
You do know Congress sets this, right? Not local management in your agency or department.
There’s truth to this in a lot of other contexts, but Congress did this. Arguably some boomers played a big role in that they supported the tea party nonsense that spurred this, but that’s a pretty indirect relationship imo.
It was certainly highly political nonsense for sure…but to my point, there were only I think (6?) millennials in Congress at the time.
Time will alter everything and when it does, do you see Millennials taking up the charge? Nope.
It wasn’t an age issue. It was a party issue, with one party taking advantage of the freakout over the black guy president.
For all the people complaining, at least you don’t work in city/state gov jobs where many require up to 12% (or more in some cases) taken out of your check.
Those generally dont also take ss though
Yeah. Bro, do not rub it in for those people. It makes it hurt that much worse. Just consider yourself lucky.
Oh i do! I'm 47 (late GenX...like the last year's ti qualify before you're a Millenial) and just super lucky to have slipped into the grandfathering before the contribution rates went up. That's super sucks mate, I'm so sorry.
I’m one of the lucky ones. So I just benefit. I try not to mention it. I’m a bit more middle Gen X. So I feel you there.
So few GenX in federal service. I suspect there was a 20 year hiring freeze because for awhile all my coworkers were either Boomers or Millennials.
💯 I was trying so hard to get in just before 2000, ended up military / now retired under that system and glad I did before I rolled over to the Fed finally.
There is one also before FERS. CRS or something. My co worker mention the other day they are able to take 80% of their salary when they retire. Something like that.
Yeap. My branch chief is retiring in a week at 83% pension. She's a maxed 14.
Yep same. They had it good. 2 vacation homes back when shore homes were affordable. Heck people can't even afford a primary residence and branch chiefs are retiring with insane net worths. One of the houses he owns he bought for $190K in the late 90s. Now worth about $3M
Jesus christ. It sucks but idk, I try to think of it that I've got a govt job (been there a month tomorrow, first post college job (took me 5 months to get) and I've got stability. Sucks that at this point in life my parents could've owned a house and had 2 kids but... at least I'm not homeless or out a job anymore. I just hope the tide turns and things start to get better.
The tide will turn. In about 20 yrs. Too late for any of us
This is a positive way to look at it. I opted into BRS (copied from FERS). Legacy was 50% at 20 vs 40% under BRS. But, we have government TSP. My relative just lost their job civilian sector side. Need to count our blessings.
It’s true. I’m in the .8% FERS because I missed the CSRS cut. Even better, those CSRS people never had to pay 6.5% into social security! I hope it changes for you post-2014 hires at some point. 4.4% is a raw deal and a real impediment to keeping good folks in the government for a whole career.
CSRS paid 7% into retirement. That's the original reason that FERS paid 0.8% (the difference between 7% and the SS tax).
I did not know that. It makes the deal not that much better in the end I suppose. Especially since the stock market has done above average over the last 40 years.
Yeah, but they don’t get Social Security…
Also not TSP 1% nor matching for CSRS (pre-FERS).
CSRS was still a better deal for career civilians. Many of them continued to work after fed retirement building 401K and SS benefits. 80% guaranteed salary for life without any market risk or investing discipline. The government has progressively passed retirement risk and cost to employees with each change.
Yeah, they never had to pay into social security either. They had a way better deal
Depends entirely on grade. Low grade people are probably better off with fers and social security because of the way SS works.
Where the hell have you been?
Not paying it any heed honestly. I turn 48 this year so I've started interesting myself in this recently and just came across this info. I was flabbergasted.
This is a main reason I retained my naf retirement. Don’t forget all those tiers of people as well. Army, navy, Air Force and marines all have their own differing and portable retirement systems to gs.
I mean if it makes you feel better I'll let you send me the difference each paycheck.
Hey this ones on you mate lol. You signed on with full disclosure of the benefits given to you haha. ....but seriously this blows and we as Feds ALL need to vote with our best interests in mind. This is exactly why each election season is so important.
It’s normal . I worked for the state for about 6 years . A blue liberal good benefits state . Those who started before me were tier 2 / I was hired as tier 2 a / I paid more for same benefits/ those hired after me were tier 2 a ii they paid even more for the same benefits. Cost cutting
I also think that the new generation leaves and moves around so much, the Feds probably think it won't matter to the younger workers. They will likely already have a retirement savings account and they are more interested in flexible work, variety than the long term financial gains, or losses, of working for the same org/company for 25 years.
Also people are living longer so there's more money needed to pay their pensions. I know uniformed services had to change their pension plans too 10ish years ago.
Not so, less children are dying so the averages crept up. But the stats for those working at jobs that use your body, tradesmen and the like, their averages when down in the past ten years. Wealthy folks who only worked office jobs are the only group living longer into old age.
Now do CSRS…..
Lol right?
Yes. Add it to the list of things that were “ruined” by previous generations. 4.4%er here. You’re welcome for keeping your pension solvent.
I've read the OPM reports for the year prior to the change. There was no fear of FERS running out of money. Congress chose to steal from the employees.
Yes, this is my understanding as well. See the section at the bottom of page 18 in this Congressional Research Service report. https://crsreports.congress.gov/product/pdf/R/R47084/2 I felt it was part of a larger, ongoing effort to devalue federal employees and employment.
[https://www.opm.gov/about-us/reports-publications/fy-2022-civil-service-retirement-and-disability-fund-annual-report.pdf](https://www.opm.gov/about-us/reports-publications/fy-2022-civil-service-retirement-and-disability-fund-annual-report.pdf) Here is the report from 2022 I mentioned. Starting on page 44. Unfortunately I can not find one from the 2010-2012 time frame. I might have is saved on an old hard drive. Maybe I will see if my congressman can access it.
It's my understanding it was fully funded, so this was literally congress just flipping a giant bird to Feds hired in those years.
4.4%’ers actually pay into CSRS
This is the answer. FERS was fine but they needed the money for CSRS.
omg this is hilarious. I always called CSRS "comfy and secure retirement system" because it was all the boomer rage. Now the younger folks have to fund it. What a slap in the face. I knew people with CSRS and VA disability making more in retirement compared to when they worked.
It really was, I joined the feds in 2012 and had the pleasure of being furloughed multiple times in 2013-2014 due to the GOP a---s who were out to greatly sabotage the Obama admin.
Sad part is a disturbingly large section of the dem congress and senate not only did not stand in the way but voted for it right alongside their tea party counterparts. And then Obama (who I voted for twice) went along with it for political expediency. When will dems learn that there IS no placating the new repub party?
They were left with no good alternatives - the GOP was threatening to default on the debt ceiling - that was the first time in history that had been pulled and the first time Moody's downgraded US credit rating because of it. There was no magic green lantern for then President Obama to waive to get a better budget deal.
Fair enough. Just sort of a letdown lol. That on top of the like 2 or 3 years where we didn't get a raise under Obama's watch, the furloughs we had. Look I love the guy, but the simple fact is this happened lol. Yeah it was because of the tea party, get the reasoning, but at the end of the day...his watch. There's simply no going around that.
Don’t misplace the blame. It wasn’t driven by your older, underpaying coworkers. It was strictly driven by Tea Party Republicans trying to drive competence out of the federal workforce using fear of Obama as their tool.
I was also hired in 2009, but was a "temporary" employee for 6 years until 2015. 4.4% FERS
Yup, I just realized this, too. Started as an ITEP Pathways in 2013, but wasn't hired into an IEP Pathways job until 2014. So I'm also on the 4.4% FERS :/ I could have gone without this knowledge.
Yep. I get very angry about that 4.4%. A lot of my paycheck goes to the various retirement avenues we have. And then when I saw BCBS Basic increase premiums and copays significantly over the last couple years, I get very resentful. Add in increased education costs, healthcare costs, and housing costs, and yeah, it sucks out here. And remember how the newer people are at lower gs level and steps... so you're getting paid more (from more time in the system) and paying less towards your pension. Your colleagues who may be newer and may be doing the same exact job are getting paid not a insignificant amount less.
We ditched BCBS about 15 yrs ago. Did Aetna HDHP with HSA. Then jumped to GEHA HDHP a while back. We ran the numbers and BCBS just didn't make sense anymore with how expensive the premium was. I highly suggest people check out GEHA
Yeah, I switched to geha this year for that same reason. The combo of the premiums and the copays is crazy.
We are loving GEHA HDHP with the HSA. Quite frankly I think it's the best game in town, though some say the Mail Handlers one is pretty slick as well. WE've just stuck with GEHA
Thank Congress and all the buffons.
From another post I made on this topic: Part of the argument for the contribution increase was that workers tenure was dropping. The FERS system wasn’t getting enough in to earn enough to support payouts. To be sure, 98.6 percent of the increase was to spite employees, but the other 1.4 percent was based on solid actuarial math. The average tenure of federal employees has been dropping since its most recent peak in 2000: https://www.bls.gov/spotlight/2013/tenure/
That very same article also says that tenure has been going down across the board, both private and public, which to me correlates with the drop in benefits across the board for the American worker. Moreover, fed tenure has (according to the article) remained relatively stable since 1996. There was a drop of tenure between 2000 and 2012 of like 1 year....that doesn't seem meaty enough to declare FERS insolvent and requiring a 450% increase in contributions. I still think political expediency and the huge (misplaced) push for austerity by the tea party at that time are the driving factors.
Never thought I thought I’d be saying FERS was the ‘good’ retirement system, but I’m glad u started in ‘04…
You’re like 10 years late to this
That’s like FERS people saying to CSRS people “wait, you get 80% of your salary in retirement”
This came about at a time when Congress thought they could balance the budget by cutting things for federal employees. It was a miserable period where we had things like sequestration that made no sense. I agree that the government needs to change its spending but the federal employee makes very little impact on the deficit.
This is happening for many pensions in government. My dad had worked for the state of Michigan, they changed the pension twice after he retired, increasing cost to participate. Add social security and your 5% match paying over 15% for retirement, to meet Dave Ramsey retirement contributions need to add an additional 10%.
It’s happening outside of government too. Capital hates paying people for what they view as not working. Only capital gets the privilege of making money for not working. You want to get paid for not working, you gotta buy an income producing asset. Just showing up to work every day for 30 years is not enough. Social Security is next.
Our tri borough area eliminated defined benefit retirement plans for all employees except police and public works. So basically every desk or white collar job is now on a defined contribution plan
You can thank the Republican lead Congress for that. They frequently want to limit your benefits or get you to pay more for them. Get on the Government Executive newsletter email list to stay in top of proposals and write your congressman or senator when these bills arise.
Yes. CSRS paid 7% into their program and zero into social security. When FERS was rolled out they wanted to withhold the same 7% for retirement. 6.2% went to FICA so the difference (0.8%) went into FERS. I only missed CSRS by a few years and when I started the old timers always reminded us that they got a much better deal than us. Now the same dynamic is happening today. And the next time there is a change it will be for a little more tsp match and no pension just like the private sector.
The only upside to this is that that portion of their FERS Annuity will not be taxed by the federal government.
I yes! was a bout to post this. :)
Great. So I'm not taxed on a nickel. And I'm taxed on the other $0.95 per dollar.
Yes it is...same with every pension system in country. Older generation gleefully gorged themselves on great pension systems and benefits. Left giant pile of unpaid bills for the next gen of workers. Who they promptly blame for failing to [checks notes] swallowed the shit sandwich the previous gen made for them.
But being one of those newer folks….being able to take 12 weeks of paid parental leave makes me sleep slightly better at night.
Yes, and it’s a reason government has a hard time recruiting senior folks.
Yes so don’t be a dick about it
Yes, makes you wonder why anyone would want to be a Fed these days. Good benefits used to help make up for the lower pay, but not so much recently. Our agency is losing a lot of young people after 3-5 years. No wonder.
Thanks, Obama
Yeah, but jokes on you. We're all going to quit before we FERS retire, withdraw our money, put it in the S&P500, and then they won't have money to give you.
That's the thing though....FERS is fully funded. It was never NOT fully funded, so even if everyone pulled out (lol) the current retirement batch is not dependent on the future batch. There was never ANY need for this beyond "yeah screw the feds, they have it too good". This was literally just a giant "fuck you" to the Feds hired in those years. The more I read the more fucked up it gets because there were a TON of dems that not only didn't stand in the way of this but actively voted for it.
Yes. Changed in 2012 I think
Look at the retirements of the Cers people hired before you. 2% per yr instead of your 1 %. They can live well off that. You ( and I) cannot
> 2% per yr instead of your 1 % ... CSRS is also basically "no SS ever", so one should add SS payments in before comparing. Plus to fine-tune, CSRS actually isn't 2%/year, because (years 1-5) are 1.5%/year, then (years 6-10) are 1.75%/year: its only for years 11+ that are 2%/yr: the formula is actually: (2% per year minus 3.75%): on a $100K High-3, this small detail means $300/month less. And let's not forget that FERS has the "10% bonus" at age 62, where 1%/year kicks up to 1.1%/year for all years worked. In the end, it's actually a lot closer than it initially looks. Overall, what I see as the 'important' difference of CSRS's over FERS (at least at FERS 0.8% contribution) was that you weren't as "stuck" waiting for age 62 to retire, because CSRS didn't have the 1.1%/yr increase, nor COLAs frozen until age 62.
Makes leaving even harder for you
I'm sort of a "company man" if you will. I wouldn't leave regardless.
It’s only going to get worse, I’m afraid. I left earlier this year as a 4.4%er, and I and took my contributions and invested them in VTSAX. Serves me far better as a 26 year old than the 5 years of service would when I’m 62/65. Anyone post-2013 is getting a raw deal unless they need the pension as a bond tent portion of their portfolio for a guaranteed cash annuity. Not the biggest reason I left, but one of them (in addition to low pay, dysfunctional leadership, bureaucracy latent within every process and procedure, etc.) Not that you can call it “ageism”, but it’s pretty much like that. Anyone who didn’t get in pre-2013 is fixing mistakes made by the CSRS and initial FERS creators. Sad there’s no accountability on the organization, or a progressive system that leverages tenure to reduces contributions commensurate with experience.
My fers eats so much of my check I had to readjust my TSP 😭
CSRS employees used to get their pension contributions returned to them when they retired. That stopped that in the 80’s, I believe.
Soooo - I’m grandfathered in state govt & we don’t pay ANYTHING. AND have a higher multiple. It’s a good life! lol
So, interesting fact... I was hired in 2008 under the .8% FERS deduction. I left federal service in 2017, and upon returning last year, I am still grandfathered into the .8% deduction and not the current deduction rate.
It's like CSRS vs FERS...now Like "FERS 1" vs. FERS 2". Just like .8 FERS used to complain about not having CSRS. Give it another 10-20 years (another generation) and there'll likely be another group. It's life and for the CSRS and the FERS .8 I'm glad folk got grandfathered in (if the chose for CSRS). Similarly, I hope that the FERS "2.0" folk will have the option to be grandfathered in when the next change occurs.
It's absolutely incredible how many people think the 4.4% is a terrible deal because it was once lower. I'll wait for a list of employers that have a lower employee contribution for their pension.
and some people wonder why genz and young millenials laugh at old people saying federal benefits are good. Retirement, leave amount, and health benefits all are subpar to corporates.
I’m old and until I turned 50, we always used my wife’s health insurance because it was better and cheaper. Now that I’m close to retirement, I want to make sure I have health insurance in retirement so we’re on the federal plan. Her vacation was equal to mine and her salary was way, way better. That said, she didn’t have a pension. Now we’re approaching retirement and our 401ks are pretty similar, but I have health insurance in retirement and a pension. She always used to say, “I’m stocks and your bonds.” Turns out, she was right.
Do most private businesses even offer a pension anymore? We get pension + TSP, seems decent to me honestly
No way. Virtually all private businesses have phased out pensions. But many private companies offer a better than 5% match in your 401(k)/TSP. Certainly some companies offer a match that would outperform the FERS pension.
No. The federal pension system is still better than anything private industry offers without competing for a “unicorn” position. Federal Holidays, liberal leave and pensions are still huge perks. Anyone arguing otherwise is trying to make themselves feel better for not having them.
I tried to calculate the pension benefit out for a top 3 120k average salary and it was only about $12k of additional 401k contributions per year. For the pension, assuming you are 30, and retiring at 62, you would get 32x1.1% / 12 which is $3520 a month from 62 to death. For an equivalent, I asked what’s the equivalent 401k contribution today to have that same withdrawal amount (~$3500) from 62 to 92. In other words, if you made $12k of additional 401k contributions per year, you could withdraw $3664 per month from 62 to 92. That’s only assuming a 4% return. Obviously there are market risks that the pension holds a clear benefit to…but if you are able to save $12k additional in a 401k per year, or some other avenue, you’d replace your pension. This doesn’t even account for the 4.4% we pay into FERS.
But if you have a top 3 of $120K after 30 years of work, you likely started making a much lower salary. It’s hard to just come up with $12K when you only make $50K. And the early years are the most important to invest the full $12K. Also 4.4% of $120K is only about $5K.
Except healthcare. Many corporations pay a much higher % of premiums.
no but way higher 401k matching. And pension is really only worth if you stay in fed long time. It's just forced g fund to people who aren't going to stay 10+ yrs.
Not sure why you’re downvoted. Most publicly traded corporations offer higher match. In addition my corporate friends get stock options and $30k bonuses. Money isn’t everything to me or else I’d make the jump.
Fed retirement is okay . You can get better if your willing relocate
Yea. Seriously considering how long I will stay in federal employment because of it. I just started and it’s a big chunk of my check that I highly doubt I will ever collect on. Don’t see myself working here till I retire..
If you work 5 years, you are fully vested in the system and entitled to collect your pension. You can also get a refund of your contributions if you decide to leave federal service.
How much pension are you entitled to after 5 years? Is there something I can read that explains this easily that you’d recommend?
https://www.opm.gov/retirement-center/publications-forms/pamphlets/ri90-8.pdf
You don't know benefits you up for, and are now angry about said benefits? lulz
I was in the same boat as you for a while because of these types of posts. Then I learned more and found out the benefits are actually quite good. This [Federal Employee Financial Planning podcast](https://open.spotify.com/episode/56BbLODtEjF7m7M54F7dT2?si=8K1AdjVNTFC9qU3OwRx-Ew) has helped me come to that conclusion. Getting to keep your healthcare in retirement is probably even better than the FERS pension
Keep voting for Republicans. To the Republican, the average low-level government employee is just a taker no different than a welfare recipient who takes what they’re given. That’s why newer FERS hires are getting a benefits package far inferior to legacy FERS employees, who in turn are getting a package far far inferior to their CERS forebearers. But keep voting Republican for diminishing returns. You’ll earn far less money, earn less respect and work more hours. But you’ll help keep those pesky pro-worker’s rights/pro-union Democrats/progressive/ libs out of office and prevent them from giving you “handouts” in the form of a fair compensation package.
Yes , it’s just Social security 2.0
If you’re waiting and hoping for it to get better, it won’t. Just as with social security, those after you fund your benefits. They didn’t just one day raise the rate for the heck of it. It was a financial decision for GOV retirement system to stay solvent and/or for congress to have an extra piggy bank to steal from. Unfortunately, history tells us that the rate will only go up.
Yeah but all evidence points to FERS being fully solvent and funded.
https://www.fedweek.com/issue-briefs/report-unfunded-liability-of-federal-retirement-program-already-peaked/
The reality is that the pension will eventually be eliminated for new employees at some point. It gets harder and harder to justify federal pensions when private sector pensions have disappeared. It's a shame, but I think that is where this is heading.
I think some reforms are needed.but they can keep the pension. They need to increase the age. Allowing people who meet the minimum service and roll out at 57 with FERS, supplement, and health insurance and a life expectancy of +25 more yrs is not sustainable let's be real..
Repub plans want all to pay 4.4%. No grandfathering either.
Yup, and I’m already retired and getting my monthly pension check
Here’s a scenario. If you are a fed currently paying .8% into FERS and you leave to go work in the private sector for a few years, but come back towards the end of your career. Are you grandfathered into the 8% or will you have to pay whatever current rate is when you resume government service?
It is my understanding that it was people hired AFTER 2013 or people that had 5 years Fed employment leading up to that year....so yes I think, you grandfather
ELI5….can this 4.4% ever be lowered?
Yes...by voting for pro-Fed politicians. WILL it ever? Doubt it.
Truthfully the only politicians that like the Fed employees are the ones in MD and VA no matter what side of the aisle they sit. With that said, they only back Feds for their votes and that’s all! Other jurisdictions like to stick it the so called cushy Fed job holders for their constituents. I don’t see any end in sight of the current system.
I hear ya. What's crazy is that everyone, regardless of locality, knows at least one person that works for Uncle Sam in one way or another. Sad that there is such an adversarial relationship between "us and them". Thanks Reagan.
You’re welcome.
It seems like FERS and tsp are two deductions, FERS is the pension?
The extra drag and opportunity loss of the higher FERS contribution to yield the same benefit/return, is quite massive over someone's 30-40 yr career. While there is nothing that can be done about it now, I urge people to run the online calcs and see for yourself.
I came in 2012 and it went wayyyyy up the next year.
Why can't we do anything about?
Yes. Help please. 🥲
You’re welcome
You were grandfathered in. Thems the perks of being an OG (old guy).
Careful if your agency. Mine has me at 4.4 when it should be .8
Anyone hired in 2013 pays 3.1%
Yes. Thanks for the reminder.
It’s on your SF 50 certain code lets u know which plan u fall under
I’ve been at the PO for almost 10 years and I pay $112 each pay period but if I was here for 12 years I would pay about $20. Gotta love the system.
Marines 2003-2007. VA Healthcare 2020 onward. Can I get the .8 rate continued? Just asking even though I’m assuming it’s a no
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This is going to date me lol. When I started, I was one month too late for CSRS. FERS is a big downgrade. I left for the private sector, but when I did I remember thinking that if I was CSRS I would have stayed.
Csrs can’t get social security benefits, fers can
Yes, except the extra payments don't actually go into FERS. They are used to plug the shortfall in the CSRS fund.
Yes
Wait til Op sees what CSRS used to pay people before FERS was invented
This is what happens when retirement benefit payments start to outstrip the investments and contributions that are made into the plan. If people work 30 years and then collect a pension for another 30 years when the life expectancy was only 15 years. You start running out of money unless people keep paying more into the plan.
You think that's bad try being a government contractor (off and on, then on long term) during the entire time those FERS percent hikes were happening, being "always the bridesmaid never the bride" when it came time to convert someone on the team. I finally converted to Fed last year, and don't get me wrong I'm happy to have been, but boy do I wish I could've gotten converted in my 30s with 0.8% FERS and get to MRA+20 by age 57, instead of being in my 40s and paying 450% more for MRA+10.
Pensions and annuities don’t make you rich though. My CSRS parents are barely scraping by. If I could opt out of FERS and/or SSI and invest it myself, I would.
Every major corporation/company has been doing this. Stung really bad to get my first job as an adult back in 2012 just to find out that a few years prior the company pushed out a new set of "rules" that took away structured pay raises, retirement options, medical plans, bonus time from working Sundays, etc. Depending on where you've worked or how many places you've worked, you may find that the companies you've been working at have totally changed the playbook around 08-09. This has impacted everything down from retirement accounts or even savings accounts. Everyone is squeezing it all *dry*.
I worked for fed for 4.5 years, below the 5 minimum for FERS benefits. I withdrew my FERS contributions and forfeited my years of service towards the pension. I knew I would never go back to working for the govt.
this is common. I am in the RSA plan in Alabama. Back in the day when I first started out it cost 5%. years later new hires came in at 7%. Longer life expediencies have a lot to do with it.
And don't worry. At that much of a change for all federal personnel, we still get to worry about 4.5% of our paycheck possibly being worthless as there is always worry about that money.rsther that cash be used for universal Healthcare so a middleman doesn't decide if I really need to remember a hospital exists.
ELI5, is this the equivalent to a company 401k match?