House targets Federal workers ER benefits

[newellcr]

Did you folks see this?

"Eliminating retirement benefits for federal workers who retire before age 62 to save perhaps $267 million a year."

House members offer $23B list of spending cuts - Yahoo! News

First the market, now my pension...

Cheers,

Chris

 

[Sarah in SC]

Other suggestions included:

_$72 million a year in cuts to the Agriculture Department's Market Access Program that promotes the sale of brand name products overseas.


_Saving $833 million a year by eliminating federally funded transportation "enhancements" like landscaping, preservation of historic facilities, and pedestrian and bike facilities.

 

[ziggy29]

I do not support breaking promises already made to those who are already in the retirement system.

I do, on the other hand, feel very strongly that pension and early retiree health care benefits need to be curtailed significantly, if not eliminated, for new hires in all levels of government -- much as they are in the private sector. If that means the "total compensation" for new public employees becomes much lower than their private sector counterparts, I'd rather pay a higher salary now than add fuel to a ticking entitlement time bomb decades down the road.

 

[FUEGO]

What's the big deal? Other companies teetering on the brink of bankruptcy have to cut employee benefits. Why should a government be immune to cutbacks when they fall on hard times?

In the interests of fairness it should probably be phased out so that those close to vesting in the current system aren't given the shaft. But those with less than, say, 15 years - fair game?

 

[REWahoo]

In the interests of fairness it should probably be phased out so that those close to vesting in the current system aren't given the shaft. But those with less than, say, 15 years - fair game?

Sounds like a blueprint for the future of SS....

 

[FUEGO]

Sounds like a blueprint for the future of SS....

Yep. When I'm 49, I bet they will announce that everyone age 50 and over will continue receiving SS under "the old plan". And everyone under 50 will receive benefits calculated under a "new, streamlined plan" that results in near elimination of any real benefit.

 

[talltrees]

House Republicans

Any mention as to whether those scumbags, er, I mean our elected members of congress are going to phase out their own top of the line retirement packages??

 

[ziggy29]

What's the big deal? Other companies teetering on the brink of bankruptcy have to cut employee benefits. Why should a government be immune to cutbacks when they fall on hard times?

There's quite a difference between federal and state/local finances here.

At the state and local levels, pension obligations are one of the main reasons these governments are practically bankrupt. The feds, on the other hand, don't have an alarming "pension tsunami" looming, largely because of the shift from CSRS to FERS some 25 years ago. I think if the Feds still had CSRS they would be having serious problems with pensions today. And I also think that had state and local governments moved to something more like FERS (a true "three legged stool" approach, IMO), we wouldn't be seeing so many cities on the verge of bankruptcy and so many states needing to raise taxes and/or slash other spending to the bone in order to meet pension obligations.

Yes, you probably could shave some money off of the federal budget with more pension reform, but where this is really a critical issue is at the state and local levels (and with Medicare).

I'd love to see Congress lead by example and slash their own retirement benefits first. Yeah, right...

 

[W2R]

Did you folks see this?

"Eliminating retirement benefits for federal workers who retire before age 62 to save perhaps $267 million a year."

Granted, it would only require me to push my retirement back from November, 2009 to June, 2010. But now that I have already turned in my Form 3107 (application to retire), if I had to do that I would not be a happy camper.

Still, having worked in the federal government all these years, I know that NOTHING happens fast in government. So actually, I am certain that I am "home free". Also, I really doubt that many senators or congressmen would dare vote for it.

 

[militaryman]

The savings of only 267 million a year makes me think there is some information missing here. Wouldn't there be much more savings if the earliest retirement date was pushed to 62?

This must be a phased in thing that was proposed for folks born after a certain year like the last raise from 55 to 57 was.

 

[ziggy29]

Yep. When I'm 49, I bet they will announce that everyone age 50 and over will continue receiving SS under "the old plan". And everyone under 50 will receive benefits calculated under a "new, streamlined plan" that results in near elimination of any real benefit.

As long as that's at least seven years away....

 

[militaryman]

The last time the retirement age was raised was at the advent of FERS. Seems that they shouldn't/couldn't arbitrarily change the rules on the FERS retirement for existing employees unless they offered forth a new retirement system to convert to . (as they did when trying to lure CSRS folks to FERS) Otherwise it would be for new hires ?

 

[Khan]

Any mention as to whether those scumbags, er, I mean our elected members of congress are going to phase out their own top of the line retirement packages??

Congress critters are under FERS.

 

[Rambler]

Any mention as to whether those scumbags, er, I mean our elected members of congress are going to phase out their own top of the line retirement packages??

Enough with the name-calling. You do realize that we have a chance to replace them every two years. Granted, I don't agree with many things they do, but there is no need for name calling. Just vote for someone else next time...in this case, someone who feels he doesn't deserve a pension. Good luck with that one.

R

 

[harley]

I believe name calling is constitutionally protected. You aren't some kind of radical, are you?

And when you have a choice between multiple [-]scumbags[/-] upstanding servants of the people, after the election you still are left with one [-]scumbag[/-] upstanding servant of the people.

 

[Rambler]

I believe name calling is constitutionally protected. You aren't some kind of radical, are you?

And when you have a choice between multiple [-]scumbags[/-] upstanding servants of the people, after the election you still are left with one [-]scumbag[/-] upstanding servant of the people.

Constitutionally protected? Yup. Reasonable and acceptable adult behavior? Nope, not really.

I know, there's lots of scumbags out there. But there's gotta be a few who aren't. Are you telling me that only scumbags wanna be servants of the people? Or is it that we've elected scumbags for so long that we as a people have no idea how to do otherwise? hmmm...we're in trouble, either way.

R

 

[donheff]

The savings of only 267 million a year makes me think there is some information missing here. Wouldn't there be much more savings if the earliest retirement date was pushed to 62?

This must be a phased in thing that was proposed for folks born after a certain year like the last raise from 55 to 57 was.

It doesn't sound that out of line to me. A change in start date would primarily effect only one portion of the three legged FERS system - social security and the TSP savings components would be unaffected. Most Feds already wait until 62 or close to it to retire and those that would have left earlier will earn a larger pension under a delay program. Bottom line is the savings are not all that significant. This is a GOP proposal which would be opposed by the unions. Add to that the fact that elected reps are under a sweetened version of the same system and would be under pressure to whack themselves at least a bit and it is clear that this one is going nowhere.

 

[Janet H]

....The fact that elected reps are under a sweetened version of the same system and would be under pressure to whack themselves at least a bit and it is clear that this one is going nowhere.

Hope not. This proposal is causing some heartburn at my house. DH is a CSRS holdout and plans to retire in about 18 months at 56. He spent last night writing [-]rants[/-] firmly worded letters to various elected officials.

 

[freebird5825]

Congress critters are under FERS.

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.

 

[W2R]

Congressional retirement provisions under CSRS or FERS are detailed in this 1995 publication (though I suppose these may have changed since then):

http://www.gao.gov/archive/1995/gg95078.pdf

Basically, instead of 1% of the high-three average pay for each of the first 20 years under FERS, they get 1.7%.

After glancing through the publication, I think the age of retirement is the same for congress as it is for other FERS employees, but check the publication.

 

[Khan]

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.

 

[militaryman]

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??

 

[ziggy29]

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.

 

[W2R]

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).

 

[ziggy29]

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).