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Old 06-05-2009, 03:25 PM   #21
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Are all of them currently under FERS, or would long timers, who were in service before 1984 (correct date?) and re-elected, have CSRS coverage? I couldn't find that answer at OPM. Hmmmmmm...

As you know, everything hinges on the SCD, or service computation date.
My guess about this proposed idea is they may go for a conversion like they did with the CSRS-to-FERS cutoff date.
The good news is government employee benefits are covered by public law and I believe "grandfathering" governs here. Plus there are enough powerful GE (govt employee) unions afoot to block the proposal at every step, like they did with the proposed universal "pay-for-performance" system.
The bad news is public law can be changed "from this day forward", and if the seated Representatives and Senators are duly grandfathered, they might go for changing to a new system. It all boils down to the SCD.
As far as I can tell, congress was under same rules as other feds: could stay with old system or switch, new hires/elects go under new system.

National Active And Retired Federal Employees

I imagine any new system would operate the same way.
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Old 06-06-2009, 06:32 AM   #22
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I do not see how the proposal can indicate a projected savings of 267million a year if the proposal was grandfathered in.

If grandfathered in then the savings would not be realized until years, nay decades, down the road right?

To have immediate savings the changes would need to effect retirees trying to retire TODAY??
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Old 06-06-2009, 09:58 PM   #23
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I do not see how the proposal can indicate a projected savings of 267million a year if the proposal was grandfathered in.

If grandfathered in then the savings would not be realized until years, nay decades, down the road right?

To have immediate savings the changes would need to effect retirees trying to retire TODAY??
I confess relative ignorance about federal retirement plans, but most state and local plans I know of have to put money aside in each paycheck for the DB pension plan. If FERS does the same thing, then I can see how shutting off the DB pension plan to new hires could "save" many millions. To some degree that might have to be offset with higher pay or more of a match into TSP, but at least you wouldn't be staring at a growing and unknown liability decades down the road.
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Old 06-06-2009, 10:04 PM   #24
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I confess relative ignorance about federal retirement plans, but most state and local plans I know of have to put money aside in each paycheck for the DB pension plan. If FERS does the same thing, then I can see how shutting off the DB pension plan to new hires could "save" many millions. To some degree that might have to be offset with higher pay or more of a match into TSP, but at least you wouldn't be staring at a growing and unknown liability decades down the road.
FERS employees contribute to FERS in each paycheck, as does the government for each paycheck. I would assume that both are used as the basis of the FERS annuity (pension).
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Old 06-06-2009, 10:09 PM   #25
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FERS employees contribute to FERS in each paycheck, as does the government for each paycheck. I would assume that both are used as the basis of the FERS annuity (pension).
That's what I figured. I looked at my wife's new employee handbook with the local school district, and under the Texas Teachers Retirement System (yes, she'll be an aide but covered under the same plan as the teachers), she'll contribute 6.4% of each paycheck and currently, her employer puts in 6.58% on her behalf. I figured that any reasonably solvent pension plan would have to have some current contributions to the pension fund, meaning that a change in how new hires are processed in could save that amount (minus whatever increased pay or 403b/TSP matching might take place).
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Old 06-07-2009, 12:17 AM   #26
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I confess relative ignorance about federal retirement plans, but most state and local plans I know of have to put money aside in each paycheck for the DB pension plan. If FERS does the same thing, then I can see how shutting off the DB pension plan to new hires could "save" many millions. To some degree that might have to be offset with higher pay or more of a match into TSP, but at least you wouldn't be staring at a growing and unknown liability decades down the road.
The way I read it, they were not "shutting off the DB pension plan to new hires", just eliminating the early retirement benefit so noone receives a check prior to age 62, so there's no change to the payments into the plan and the savings are due to reduced payout.
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Old 06-07-2009, 07:03 AM   #27
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Reduced pay out many years down the road, then there will be an increased pay out because of the workers working longer. It sounds like a smoke and mirrors decrease to me.
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Old 06-07-2009, 08:15 AM   #28
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I hope all the cuts are enacted, we need it, but I know it's highly unlikely. We will wait until the train is completely off the tracks and then start wondering what happened and asking our leaders why they didn't do anything!!! Gotta love it...
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Old 06-07-2009, 11:15 AM   #29
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The major problem with such a change is that there would be a large number of Federal employees retiring in advance of the effective date. Given that the government is already having problems due to a lack of adequately trained personnel, this would create the temporary (figure at least 5 years) hiring of even more contractor support (good for me, bad for the taxpayer). Plus, as mentioned, any savings would take quite a while to phase in. FERS employees retiring short of 62 already are penalized through lack of annual inflation adjustments, though they do get a small SS supplement as long as they don't work and earn more than X dollars (pretty low, but I can't remember what it is).

I know this won't be popular, but a better solution to save taxpayer dollars would be to allow retired feds to work as rehired annuitants with no retirement penalty. The company I work for gets three times what I would get if I were allowed back without penalty. And, for me, it would be a wash, except for the 401(k) I have now. Also, the government already covers my health insurance (with a very large co-pay on my part), so they would essentially save 2/3 of what they pay a contractor for my services.

But that would make sense, and the gummint is not known for accepting solutions that make sense (especially the unions).

Being a government consultant is never having to say you're sorry :-).
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Old 06-07-2009, 12:04 PM   #30
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The major problem with such a change is that there would be a large number of Federal employees retiring in advance of the effective date.
Excellent observation!

Picture a lot of things (taken for granted) coming to a screeching halt because federal employees did a mass exodus to beat a major change in retirement benefits cut-off date.
Things like border patrol and airport security lessened, defense contract awards slowed down, less and later mail delivery, interstate highway funding not arriving on time to the states, SS checks arriving late, delays in tax return processing and the resultant penalties, reduced food and livestock safety inspections, Federal Reserve banks cutting back hours...
I could go on and on.
The federal w*rker is often bashed, and maybe some of it is deserved on a case by case basis. But certainly not across the board.
Just remember the civil servant didn't make the rules. They try to make the rules w*rk.
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Old 06-07-2009, 02:28 PM   #31
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The major problem with such a change is that there would be a large number of Federal employees retiring in advance of the effective date.
I don't mean to be cute or mean with this, but that might be a good thing. With all our deficit spending, even before the meltdown, is there anyone who thinks our Fed government won't have to cut services? It's all starting to make sense...
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Old 06-07-2009, 04:51 PM   #32
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I don't mean to be cute or mean with this, but that might be a good thing. With all our deficit spending, even before the meltdown, is there anyone who thinks our Fed government won't have to cut services? It's all starting to make sense...
If they're like state and local governments facing cuts, they'd make it a point to target all the most popular services for the cuts -- until people demand a tax increase to restore it.
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Old 06-07-2009, 06:04 PM   #33
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Freebird--Border Patrol can retire at anytime after 25 years of service and have a mandatory retirement age of 57. It is due to the arduous nature of their position. Many federal law enforcement officers, fire fighters, and all nuclear materials couriers have the same retirement. These benefits are due to the jobs requiring a young and vigorous work force. The last thing you want is a 62 year old fire fighter or law enforcement officer going toe-to-toe with the physically nightmarish situation they sometimes find themselves in.
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Old 06-08-2009, 10:37 AM   #34
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Picture a lot of things (taken for granted) coming to a screeching halt because federal employees did a mass exodus to beat a major change in retirement benefits cut-off date.
Sooo, maybe some of the 9.x% of Americans who currently have no job can get off the government dole and find a suitable position working for ole Uncle Sam? Under the new retirement system, of course. Unemployment problem solved, legacy retirement costs solved. No offense to fed workers, but it ain't rocket science (excepting certain departments of NASA).
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Old 06-08-2009, 01:53 PM   #35
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Sooo, maybe some of the 9.x% of Americans who currently have no job can get off the government dole and find a suitable position working for ole Uncle Sam? Under the new retirement system, of course. Unemployment problem solved, legacy retirement costs solved. No offense to fed workers, but it ain't rocket science (excepting certain departments of NASA).
It may not be rocket science, and many federal jobs are blue collar and others are clerical, but those who tend to leave early are the folks who have readily transferable and valuable skills for the private marketplace. It takes years to learn procurement, intelligence work, environmental skills and many others. Lots of these people have advanced degrees and now even relatively low level entrance positions require college degrees.

It's great to bring people in and train them over a period of several years with a combination of on the job work and classroom training. That's how I came in - as a Marine Corps intern. Took 4 years to reach full journeyman level (GS-12). Maybe the mass exodus won't happen, but when you promote inexperienced people too quickly, things start to fall apart. And folks who only know how things are done in industry are not going to be able to just join the government and be able to fully function the next day.
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Old 06-08-2009, 02:12 PM   #36
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It may not be rocket science, and many federal jobs are blue collar and others are clerical, but those who tend to leave early are the folks who have readily transferable and valuable skills for the private marketplace. It takes years to learn procurement, intelligence work, environmental skills and many others. Lots of these people have advanced degrees and now even relatively low level entrance positions require college degrees.
But this begs another question: If in the general case retention is so critical, why wouldn't the private sector also continue to provide the "retention incentives" (mostly retirement benefits) that the public sector does?

I accept that there are some public sector areas where retention is very important, where there is a very high value to experience and where training new hires is costly and inefficient. But I don't think that applies to many of the jobs in the public sector any more than it should apply to their counterparts in the private sector. And private sector businesses are not in business to lose money. If they thought retention was that critical to their long-term success and profitability, they wouldn't all be dropping their pension plans.
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Old 06-08-2009, 02:41 PM   #37
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But this begs another question: If in the general case retention is so critical, why wouldn't the private sector also continue to provide the "retention incentives" (mostly retirement benefits) that the public sector does?

I accept that there are some public sector areas where retention is very important, where there is a very high value to experience and where training new hires is costly and inefficient. But I don't think that applies to many of the jobs in the public sector any more than it should apply to their counterparts in the private sector. And private sector businesses are not in business to lose money. If they thought retention was that critical to their long-term success and profitability, they wouldn't all be dropping their pension plans.
You are obviously correct in that the goal of the private sector is to make a profit. Which may explain why many non-profits have far better pension plans than both the private sector and the current FERS system. However, the private sector often acts irrationally and for the short term only. Big firms lay off skilled people and then find they can't do the job. Pension plans are ended with no real benefit to the company other than pleasing the stock market. And the purpose of government, at any level, is to provide services and protection to the general population, not make a profit.

The government slowed down its new employee hiring in the '90s and most of the 2000's and now finds it self with a lot of older worker, some mid-level and almost no younger workers in the pipeline. Poor planning is a big part of the problem. Things have changed, which is why CSRS gave way to FERS over 20 years ago. The number of CSRS employees continues to drop and there will eventually be none. And big business can do something that the government has little flexibility to do - they can offer much higher pay and they can pay large hiring and retention bonuses. Most of us old timers accepted jobs in public service because that's what we wanted to do, public service, not because of the retirement plan - it was compensation for the fact that many of us could have made significantly more in the private sector. Plus the fact that, after we were trained, industry definitely paid more than the government. The retirement plan was partial compensation for that lower salary. As was the knowledge that layoffs were very uncommon.

You pays your money and you takes your chances. Just like with the military - I doubt any able bodied person under 35 would be turned away. If jobs are so scare, how come the military has trouble meeting its recruitment quotas? Different times = different attitudes. I volunteered for service in 1969 and served 6 years on AD. Not so many do now.
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Old 06-10-2009, 12:57 PM   #38
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So when I read the description of the proposal it seems to indicate they are targeting the Social Security Supplement of the FERS system. (see below excerpt) Is that how you guys interpret it?

http://republicanleader.house.gov/Up..._President.pdf

The Federal government provides civilian employees with a benefit not normally offered to private sector employees, Federal employees who retire at age 55 or older with at least 30 years of service or at age 60 with at least 20 years of service receive until they reach 62 a benefit equal to the estimated Social Security benefit for which the worker will become eligible at age 62. This policy not only encourages Federal employees to retire early, but it comes at a significant cost to taxpayers. Preliminary estimates indicate that the early retirement benefit costs taxpayers $267 million a year.
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Old 06-10-2009, 01:07 PM   #39
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That's the way it reads to me. The SS supplement for those retiring under FERS under age 62 would be eliminated. Doesn't affect me, but, if Congress does this, there should be some sort of phase in period - i.e. doesn't apply to anyone over 50 or something like that.
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Old 06-10-2009, 01:35 PM   #40
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That's the way it reads to me. The SS supplement for those retiring under FERS under age 62 would be eliminated. Doesn't affect me, but, if Congress does this, there should be some sort of phase in period - i.e. doesn't apply to anyone over 50 or something like that.

That would really be a tough pill to swallow --- at 41years old now I have 23 years of Federal service. I've been promised that supplement from day one of FERS enrollment. To change that now for anyone who signed up under the current FERS plan seems like it would have to be a breach of contract. I mean the brochures I was given describing FERS annuity and SS Supplement did not have fine print at the bottom saying "this benefit may or may not materialize depending on the legislation implemented at the time."

If they are wanting to change the plan then change it for newbies and then honor it until it is changed again for incoming folks.
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