FERS Sick Leave Buyout Blocked

[XL-entLady]

The sick leave issue is just one of the things that makes FERS retirement suck swamp water.

FERS is great if you need a portable retirement account, or if you were lucky enough to be able to max out your TSP from day one and then made excellent TSP decisions every year since.

But if you intend to be federal government until you retire, and if you couldn't afford to max your TSP because life happens, and if your TSP crystal ball is broken, CSRS has it all over FERS from the employee's side and is cheaper by far for the employing agency as well. As I have often lamented on these posts, I missed being CSRS Offset by six miserable days. Anyone who was CSRS and switched to FERS got sold a rotten bill of goods.

Okay, rant over.

Lady

 

[CountryBoy]

My Father retired under CSRS and he has it made in the shade and anyone who says FERS is better is a total idiot.

CB

 

[XL-entLady]

My Father retired under CSRS and he has it made in the shade and anyone who says FERS is better is a total idiot.

CB

I have several family members who are retired under CSRS. The difference between their situations and those of friends who are starting to retire under FERS is astounding. And don't even get me started about the differences between disability retirements under the two systems.

Lady

 

[OBGibby]

and is cheaper by far for the employing agency as well.

XL-entLady -

I'm curious about your reference to CSRS being cheaper than FERS for the employing agency. If you have the time, I'd be interested in learning a little bit more of the details on that. Thanks.

 

[XL-entLady]

XL-entLady -

I'm curious about your reference to CSRS being cheaper than FERS for the employing agency. If you have the time, I'd be interested in learning a little bit more of the details on that. Thanks.

Sure. When we figured personal services costs in my DOI agency, we estimated CSRS personal services with benefits at 115% of pay and we figured FERS at 135% of pay. (Unless it was law enforcement and then it was a different higher figure that I can't remember for sure - 143% I think.)

Before FERS employees became more widespread, there was an unofficial policy of CSRS employee preference for equally qualified candidates because they were so much cheaper for the bottom line.

Lady

 

[Elgallo]

And add to this the fact that they are contemplating changing the formula for our annuities to high 5 from the current high 3. Aren't our politicians real works of art?

As the popular song went in the 60's while I was in the RVN "We got get outa this place, if its the last thing we ever do"!

Can't you just feel the love...............................

 

[OBGibby]

Sure. When we figured personal services costs in my DOI agency, we estimated CSRS personal services with benefits at 115% of pay and we figured FERS at 135% of pay. (Unless it was law enforcement and then it was a different higher figure that I can't remember for sure - 143% I think.)

Before FERS employees became more widespread, there was an unofficial policy of CSRS employee preference for equally qualified candidates because they were so much cheaper for the bottom line.

Lady

Okay - more questions. What do you mean by "personal services?"

 

[XL-entLady]

Okay - more questions. What do you mean by "personal services?"

"Personal services" costs are what my DOI agency called the employee pay costs in the line item budget. It's like "utility costs" or "postage and mailing fees" or "cleaning supplies." It's the buzzword for what it costs to pay folks when you add together the salary and all the benefits costs.

FERS employee benefits costs were more than double what the CSRS costs were.

Next question?

Lady

 

[nnuut]

Yeah, they want us to trim the shrubs around our building because the base won't fund it and we have no money for that kind of thing and want us to use our personal equipment . These are BIG over grown Holly hedges and Crape Myrtles Lots of them. Saw contractors cutting some on the other end of the base, but they want GS-12s and GS-13s (equivalent) to volunteer to do it on Government time, I've better things to do, like catch up on my projects and keep those AIRPLANES Flying. NO NO NOT ME!!:nuts:

 

[Pschiffdicpal]

Yeah, they want us to trim the shrubs around our building because the base won't fund it and we have no money for that kind of thing and want us to use our personal equipment . These are BIG over grown Holly hedges and Crape Myrtles Lots of them. Saw contractors cutting some on the other end of the base, but they want GS-12s and GS-13s (equivalent) to volunteer to do it on Government time, I've better things to do, like catch up on my projects and keep those AIRPLANES Flying. NO NO NOT ME!!:nuts:

GO AIR FORCE love the OIL price thanks.

 

[James48843]

oops- delete this

 

[James48843]

Okay - more questions. What do you mean by "personal services?"

"personel services" = Personnel Compensation and Benefits (PC&B). The Agency pays more than just your salary- they also make contributions towards your health care insurance, your pension, and , in the case of FERS employees, BOTH social security and a TSP Match.

The required contributions for CSRS and FERS employees:


CSRS:
Basic Retirement Benefit Contribution 7% Agency, 7% Employee
Social Security Tax (FICA) None None
TSP None None
Total: 7% Agency 7% Employee






FERS:

Basic Retirement Benefit Contribution: 10.7% Agency, /8/10th Employee
Social Security Tax (FICA) 6.2% Agency, / 6.2% Employee
TSP 5% Agency , / up to 10% employee

Total: 21.9% Agency , / Up to employee




Under FERS, with the full Agency match for TSP, the cost of the employee is 10.7 + 6.2%+ 5% TSP match above the salary for the retirement contribution. Total = 21.9%


Under CSRS, is only a simple 7% employer contribution.

That's the result of the 1983 compromise that did away with CSRS. At the time, the fund which was in crisis was Social Security. The deal they cut at the time was to get all 3 million federal employees contributing INTO social security, at a time when none of them was taking anything OUT of social security.

Smoke and mirrors, and BAM- you fix the Social Security System, which in 1983, was about to go broke.

You change the retirement age from Age 55 and 30 years, to Age 57 and 30 years, and drop the pension payout from about 50% of final year salary, to 30% of final three years salary (works out to about 27%), and you raise the full Social Security age from 65, to age 67, and you've balanced Social Security for another generation (more or less).

That's what they did to us Federal Employees in 1983.

Now, CSRS is less expensive, but Social Security is solvent through 2040 (or so).

And employer (Federal Gvoernment) pays MORE for FERS employees, than they pay for CSRS. Here are the Agency portion rates:

http://www.opm.gov/retire/pubs/bals/2002/02-312.pdf

The kicker is under CSRS, people end up living longer than the employee contributions paid in. Under FERS, they pay out less than they pay out under CSRS, as FERS also has smaller cost of living increases over time. Under CSRS, they got inflation. Under FERS, they get inflation LESS 1%.

Smoke.

Mirrors.

Balanced Social Security fund. *(until later, of course, when the people who did that are no longer in Congress. President Regan signed that one, by the way. It was Public Law 98-21, which reformed social security, and public law 99-335 in 1986, which laid out the FERS system, and authorized the creation of the TSP.

 

[OBGibby]

Thanks, James48843 and XL-entLady.