Stability of Federal Pension/SS

[Bimmerbill]

However, after reading all the NSPS horror stories on Federal Soup & elsewhere, if they put our agency under that I'd assuredly pull the plug.

NSPS has the effect (?intended/unintended?) of slowly dragging the entire pay scale down overall - not to mention killing morale & fostering cronyism, nepotism, etc.

My first year in NSPS and I am about even (+$200/yr so far) with where I would have been under the GS system. But I got a really high rating. Don't expect to get that high of a rating every year.

Plus, my command splits the raise between salary and bonus. The system is designed to slow salary increases and save the gov't money.

 

[Independent]

I have two federal gov pensions. Mil and SS. For me those two pensions represent just about all of ours, and I suspect others benefit from SS.

So, what type of financial disaster would have to take place to put this type of retirement situation in jeopardy. Now I know you could say the gov could cancel these pensions, but the probability of this is extremely low, so if you choose to discuss this how about some idea of how likely you thing your scenario is likely.

Hyper inflation with the governments once a year catch up may be one. However, I think if this were to happen gov might step in with some sort of leveling device. However, I think it would still be after the fact and some standard of living would be lost.

Since SS has its own revenue from the payroll tax, I don't see it going to zero (barring a complete collapse of our government or economic system). However, the actuaries estimate is that the payroll tax can only support about 78% of currently scheduled benefits 30 years from now.

Like others, I think we'll see reductions via COLA adjustments or means testing, but if taxes aren't raised there will have do be direct reductions as well. This is one example of a way to balance SS through benefit reductions alone: http://www.ssa.gov/OACT/solvency/RBennett_20060316.pdf

Note that the 78% is really a change in the "replacement ratio". If real wages grow by 30% over the next 30 years, the actual purchasing power of the benefit wouldn't change at all.