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contractor to federal government
05-28-2015, 11:19 AM
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#1
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Dryer sheet wannabe
Join Date: May 2015
Posts: 11
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contractor to federal government
I've been offered a temporary federal government position at a GS-13 Step 1 that's non-negotiable. It's well below my current salary of 105k as a government contractor. I'm 34 years old. I value stability and hope that it's a foot in the door to a career in the federal service, but I also don't like that I will have to work at least 7 years (assuming regular in-grade step increases) to reach my current salary. I'm also not very excited about a temporary position of 2 years. I also feel that I'm skilled enough to remain a contractor, but I'll probably have some nervous times and need to job hop quite a bit. My current job and potential government job are very similar, so comparing job satisfaction is not a factor. This is purely a financial payoff/stability/future of FERS retirement program/etc. decision. If given this situation, would you take the job? Why?
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05-28-2015, 11:26 AM
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#2
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Thinks s/he gets paid by the post
Join Date: Nov 2006
Posts: 2,288
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Every time we have a "pension" thread, people with government pension say that they've dealt with lower salaries during their career in return for a stable pension. Lots of people respond by saying they don't believe government salaries are lower than similar private sector jobs. Once again, I say they are wrong. In general, the government pays less, but in my opinion the pension and job security are worth it.
Most of my friends made more than I did for years and years. Now I'm retired at 50 and they will be working for who knows how much longer. So, yes, I would take the job.
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05-28-2015, 11:35 AM
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#3
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Dryer sheet wannabe
Join Date: May 2015
Posts: 11
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Quote:
Originally Posted by utrecht
Every time we have a "pension" thread, people with government pension say that they've dealt with lower salaries during their career in return for a stable pension. Lots of people respond by saying they don't believe government salaries are lower than similar private sector jobs. Once again, I say they are wrong. In general, the government pays less, but in my opinion the pension and job security are worth it.
Most of my friends made more than I did for years and years. Now I'm retired at 50 and they will be working for who knows how much longer. So, yes, I would take the job.
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That's what people have been telling me, too. I guess the main concern is that it's not a permanent position, and if I had to return as a contractor in a couple years, I have less bargaining power or leverage with the lower pay. The contracting company's HR could say "Oh, you are making 90k now, we can't give you more than 94k" when I was making 105k just a couple years prior. I know the difference is not as significant as it could be, but it's still a factor to consider.
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05-28-2015, 11:52 AM
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#4
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Thinks s/he gets paid by the post
Join Date: Jul 2002
Posts: 1,587
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I'm a federal retired employee, 29 years. We always considered the contractor workforce as temporary as they had to absorb most of the ups and downs of the work required to be done....and the contract was up for re-bid every 4-6 years so there was no guarantee the follow on company would hire the incumbents or offer the same pay/benefits.
That said, why go to a lower paying temp job? You'll need to assess the likelihood that, once in the door, you can find and move to a permanent GS13 position. In my years, promotions to 12, then 13, then 14 were mostly self-initiated.....applied for and competed for the promotions to an opening and needed to be willing to move for some of them (not for the last one). If that possiblility is limited at your location, then I'd pass on the govt job.
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05-28-2015, 12:46 PM
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#5
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2005
Posts: 17,237
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Quote:
Originally Posted by utrecht
Every time we have a "pension" thread, people with government pension say that they've dealt with lower salaries during their career in return for a stable pension. Lots of people respond by saying they don't believe government salaries are lower than similar private sector jobs. Once again, I say they are wrong. In general, the government pays less, but in my opinion the pension and job security are worth it.
Most of my friends made more than I did for years and years. Now I'm retired at 50 and they will be working for who knows how much longer. So, yes, I would take the job.
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My belief is that for upper level jobs the gvmt pays less.... for lower level jobs they pay much more.... it is not a one size fits all....
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05-28-2015, 01:15 PM
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#6
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2006
Location: Washington, DC
Posts: 11,327
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A temporary position doesn't provide the Federal retirement benefits discussed above. Is there any realistic expectation that this two year job would lead to a permanent position?
__________________
Idleness is fatal only to the mediocre -- Albert Camus
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05-28-2015, 01:58 PM
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#7
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Dryer sheet wannabe
Join Date: May 2015
Posts: 11
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Quote:
Originally Posted by donheff
A temporary position doesn't provide the Federal retirement benefits discussed above. Is there any realistic expectation that this two year job would lead to a permanent position?
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Please expound on this. I believe I am eligible to the same benefits as a permanent employee.
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contractor to federal government
05-28-2015, 02:29 PM
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#8
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Recycles dryer sheets
Join Date: Jan 2015
Posts: 81
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contractor to federal government
Temp vs term vs permanent. Term and permanent have benefits. Whereas temp is pay only, no FERS/health benefits. At least from how I understand it. Sorry I'm so brief. On lunch break from w*rk.
You may have meant temporary in not to exceed 2 yr-term sense? If so then yes to benefits. If simply a temp position, which I thought was NTE 1 yr max? Maybe we're talking about the same thing?
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05-28-2015, 02:58 PM
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#9
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Dryer sheet wannabe
Join Date: May 2015
Posts: 11
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Quote:
Originally Posted by nate2953
Temp vs term vs permanent. Term and permanent have benefits. Whereas temp is pay only, no FERS/health benefits. At least from how I understand it. Sorry I'm so brief. On lunch break from w*rk.
You may have meant temporary in not to exceed 2 yr-term sense? If so then yes to benefits. If simply a temp position, which I thought was NTE 1 yr max? Maybe we're talking about the same thing?
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Yes I'm term not to exceed 2 years. Thanks for helping me clarify.
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05-28-2015, 03:09 PM
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#10
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Recycles dryer sheets
Join Date: Aug 2012
Posts: 171
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What is the likelihood that you can turn this term position into a permanent one? If it increases your odds significantly of getting a permanent govt job, then go for it. There are govt jobs that are only advertised internally that you might be able to transition to.
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05-28-2015, 03:20 PM
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#11
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Recycles dryer sheets
Join Date: Sep 2006
Location: clearwater
Posts: 439
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i would take the job. If you are comparing a 1099 job to a w-2 job , to be even a 1099 would need to be paid at least 15% more due to the tax and benefit differences. ( probably more like 25%) You will likely be able to apply for and be hired for a permanent position once you get your foot in the door. Expect the starting pay to be lower, the benefits and tax differences make a huge difference.
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05-28-2015, 04:08 PM
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#12
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Dryer sheet wannabe
Join Date: May 2015
Posts: 11
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Quote:
Originally Posted by rothlev
i would take the job. If you are comparing a 1099 job to a w-2 job , to be even a 1099 would need to be paid at least 15% more due to the tax and benefit differences. ( probably more like 25%) You will likely be able to apply for and be hired for a permanent position once you get your foot in the door. Expect the starting pay to be lower, the benefits and tax differences make a huge difference.
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I should clarify further. I am a defense contractor and don't require a 1099 as I work for a large defense contracting company, I'm not an independent contractor. I do agree that federal jobs pay lower, at least in my field.
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05-28-2015, 04:15 PM
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#13
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2008
Posts: 12,654
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I would be leery of a "temporary" Govt position unless you're sure there's a darned good chance they'll make it permanent after a 2 years' probationary period.
Carefully compare the benefits (if you haven't already). Benefits = health insurance, leave, bonuses, and retirement contributions.
In my area, Defense, particularly in any STEM field, contracting companies' benefits are often very close in terms of leave (although they'll expect you to work more hours than Govt will), and better in terms of health insurance. Also, Govt. bonuses tend to be quite small, if they exist at all. Think hundreds, not thousands.
Amethyst
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'There is only one success – to be able to spend your life in your own way.’ Christopher Morley.
Even a blind clock finds an acorn twice a day.
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05-28-2015, 05:55 PM
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#14
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Dryer sheet wannabe
Join Date: May 2015
Posts: 11
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Yea I'm definitely not in a STEM field. I would imagine private sector does pay a lot more with comparable benefits. Thanks for the input.
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05-28-2015, 05:57 PM
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#15
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2004
Location: Portland, Oregon
Posts: 7,113
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Personally, if I needed a job I would take that that job until I found a better one.
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Duck bjorn.
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05-28-2015, 06:32 PM
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#16
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Thinks s/he gets paid by the post
Join Date: Jul 2009
Posts: 1,610
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Expand your potential as contractor, work hard ...max out your 401 ...your upside potential is much greater. Is it as certain ...no. Will you have to work harder as a contractor ...you KNOW the answer to that. Go for the growth, go for the flexibility to move, to expand into different areas of industry.
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05-28-2015, 07:58 PM
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#17
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Dryer sheet wannabe
Join Date: May 2015
Posts: 11
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Quote:
Originally Posted by stephenson
Expand your potential as contractor, work hard ...max out your 401 ...your upside potential is much greater. Is it as certain ...no. Will you have to work harder as a contractor ...you KNOW the answer to that. Go for the growth, go for the flexibility to move, to expand into different areas of industry.
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Darn. Not really what I wanted to hear but I appreciate the candor. I've been leaning toward accepting the position based on advice from others but still on the fence. Interesting to hear differing views here.
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05-28-2015, 10:33 PM
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#18
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Thinks s/he gets paid by the post
Join Date: Sep 2013
Location: Cincinnati, OH
Posts: 4,371
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I think almost all gov't hiring now starts as term and then you work into a permanent position. Also, the gov't pension is not nearly as good as used to be. Not sure of the exact rules now, but check this to know what you would get.
I assume the total salary for GS-13 you quote includes the locality increase? One thing is probably true, the gov't health ins benefits will cost less or be better than your contractor benefits. I know as a contractor emplyee myself I pay more than the fed employees do. Another assumption as a contractor employee you likely don't have any pension program. 401k match might be good or more generous than fed side.
As for the GS-13 step 1, the good part is you have 9 more steps of increase, before having to bid to a higher GS-14. Being step 1 you have better chance for raises than if you were maxed out or near the top of the steps - the way I understand it. I have worked with GS employees, so I am certainly not from personal experience.
Overall, either path can work. Stay higher paid and less job security contractor. Or switch to fed and have better security and bit lower pay. As fed you might save less in retirement savings but have that pension to offset the need for higher savings total.
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Retired Aug 2, 2017; age 53
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05-29-2015, 06:43 AM
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#19
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Thinks s/he gets paid by the post
Join Date: Aug 2005
Location: Crownsville
Posts: 3,745
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I had always heard that the pension plan for FERS employees sucked, but upon reading it, it looks like you get 1% of your high three years, multiplied by your years of service. And if you stay past 62, it bumps to 1.1%. So if you put in 40 years and are older than 62 when you retire, you'll get 44% of your high three years.
Maybe not as good as the old CSRS system, but not as bad as I thought it was. Under CSRS, you'd top out at 80%, but had to put in something like 42 years to get to it. And you didn't get SS, which you do under FERS.
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05-29-2015, 07:19 AM
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#20
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Dryer sheet wannabe
Join Date: May 2015
Posts: 11
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Quote:
Originally Posted by Andre1969
I had always heard that the pension plan for FERS employees sucked, but upon reading it, it looks like you get 1% of your high three years, multiplied by your years of service. And if you stay past 62, it bumps to 1.1%. So if you put in 40 years and are older than 62 when you retire, you'll get 44% of your high three years.
Maybe not as good as the old CSRS system, but not as bad as I thought it was. Under CSRS, you'd top out at 80%, but had to put in something like 42 years to get to it. And you didn't get SS, which you do under FERS.
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Unfortunately the mandatory contribution to the FERS pension fund is now at 4.4% for new employees. I believe it was originally 0.8% which has increased in recent years. 4.4% is quite a sum when you add it up over the years. The pension plan sounds like a good deal, but as others have said, the pension has decreasing value during your retirement since it doesn't adjust for inflation. In that 15th year of retirement, that monthly retirement check won't look so great as those first few years.
Still on the fence about the job offer. I don't have a doubt you can make a decent career as a defense contractor, but I'm pretty sure that would require a lot of job hopping and brief patches of unemployment or looking for other projects within the company in order to avoid a "lack of work" (LOW) notice from your employer. Of course, ymmv... I know some people who have stuck with the same company for years doing the same job. I'm afraid that's rare in my industry.
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