Six Percent Pay Cut is Halfway Home [FERS and CSRS]

[Silverbird]

http://www.federalnewsradio.com/?sid=2380400&nid=20
Pay more for the pension (this is NOT TSP, this is FERS or CSRS, the Pension plan), watch your paycheck shrink...

Plus - Shrink the number of Federal workers, but don't count the ones from this FY, and we just lost 1/4 in our office.

 

[k0nkuzh0n]

Has there been any more updates on the topic of increasing employee contributions to FERS??

 

[alevin]

not on that, but there is proposal in the House to freeze cost of living bump in 2012. Read that in Federal Daily today.

 

[James48843]

Has there been any more updates on the topic of increasing employee contributions to FERS??

It's part of the discussion going on for raising the debt ceiling. We'll have to wait until they have a deal on raising the debt ceiling to see if it is included.

 

[k0nkuzh0n]

While pay freezes suck, I don't see them as anything close to as serious as a 5-6% pay cut plus lowering retirement pension payout.

And does anyone know, was it talks about changing it for everyone, or just new hires after a certain date? Big difference between giving something to someone and taking it away then never giving it to them in the first place.

 

[James48843]

And does anyone know, was it talks about changing it for everyone, or just new hires after a certain date? Big difference between giving something to someone and taking it away then never giving it to them in the first place.

The republican proposal is to change it for everyone.

See Mike Causey's column here: http://www.federalnewsradio.com/?nid=20&sid=2407532

 

[Boghie]

FERS Folks,

You are paying 0.8% of your pension. Anyone think that will last. Money talks, BS walks. And your FERS pension is simply a line on the budget - it is not an entitlement. If you have been counting on the FERS pension than you have been counting on politicians. Not a very good idea.

Here is a deal I would make to the Gubmint.

I do not want to pay into FERS. Never did - anyone thinking that contributing 0.8% of ones salary is 'paying into' the system. So, cut my pension and pay me the additional 6%. I will put as much of that as I can in TSP and be very, very happy. Do not offer to take an additional 5% out of my paycheck to invest in FERS (which invests in 'G Fund' financial instraments). Give me the option of dumping it and investing the employer contribution in a retirement account that cannot be gimmiced by politicians - whether they be Ted Kennedy or Ted Stevens. Maybe put it in a TSP Roth when you get around to it.

 

[alevin]

yep, sux to be one of us late-bloomer FERS boomers. Not counting on the pension OR SS by the time I retire. TSP by itself won't cut it, no matter how well I do with it between now and then. they designed the system to be 1/3 1/3 1/3-and that's about how it'd balance out on income for me-if things went the way my annual statement always told me it would likely turn out.

potentially losing 2/3 of what I thought I'd have-gone baby gone. I'm already putting my extra 5-6% into outside Roth (and some into taxable account when I have a little additional slack). got to have some savings to tide me over while I wait for the TSP checks-when I get to that point. they make me put my Roth cash into FERS-G, there's going to be some ramifications in the voterhood.

either that or I tighten down the belt hard as I can so I can do both Roth and increased contribs to FERS-G-no cable TV, no eating out, no mini-weekend vacations out of town, no replacing carpet in whole house, no more Starbucks plain coffee. they want to see the economy come to a grinding slowdown, that's what they'll get with help from me.

 

[nnuut]

They can all KONA Kiss Old Norman's A**!

 

[Boghie]

Alevin, Nnuut,

I don't think we are talking about massive cuts. Hopefully none.

But I have no faith, nor any confidence, in politicians.

And, I do not want them to have any control over any more of my financial assets. On our side, the amount spent on Federal pensions is rather small. I think the current budget expenditures for Federal retirees is only 4.6% of spending. They can make their bigger cuts elsewhere when the Bond Vigilantees stop buying.

Also, I really wasn't talking about NOT getting any pension. They should at least offer the benefit acrued.

I just don't want to pay for 'G Fund' returns. For example, right now you have a nice bump on the 'G Fund' - and that is even with the month long downturn. You can beat the 'G Fund' returns every year. You have (excepting maybe 2008). Imagine having 5% more assets to invest in your TSP or Roth. And, those investments could not be jiggered by politicians.

 

[alevin]

Boghie, I'm not seeing 5% increase in pay in the future-I'm seeing pay freezes and cost of living freezes-perhaps for years to come. plus price increases in basic living costs.

so any mandatory 5-6% increase in contribs to FERS would be coming come from funds that would otherwise be going into the Roth account or saving for replacement vehicle (for me). The income only stretches so many different directions, eh? I get you about the G-fund returns in FERS. that was my point. That 5% is earning more in the Roth than it would in FERS. I want to manage that 5% myself outside of TSP. more choices for one thing.

to my embarassment I did not beat the G fund last year in the real TSP account-ended up tiny bit negative from mistiming of the few moves I made. Did much better in the outside accounts-which are of course much smaller, but growing-at least til April hit. won't go there here. too much pain. ETFTAlk reveals all.

 

[Buster]

They're not going to cut retiremnt pay for people already retired...Retiree's have already missed out on any pay increases for the LAST two years....it would be too much to ask of the people on this fixed income.

That's just how I see it..

 

[Frixxxx]

They haven't increased Social Security for two years....

 

[Boghie]

More good news on Federal Pensions...

The government has promised pension and health benefits worth more than $700,000 per retired civil servant. The pension fund's key asset: federal IOUs.​

<sarcasm>I've never been more confident in my pension than I am right now!!!</sarcasm>

Folks, how many of you have $700,000 in your TSP?

I hope to be there in about 8 years.

I bet the math proves that nobody would have $700,000 in assets at retirement using the only fund our pension invests in. Namely the 'G Fund'. Using a starting salary of $24,000, a starting age of 24, an inflation of 3.1%, a G Fund return of 4.26%, a 15% contribution level increasing with inflation, and working for the Feds till age 65 - I get to $630,000. In inflation adjusted numbers, with an assumption that yours truely will croak at 85, the annual benefit will be $10,000 a year.

But, what about the folks that bang out after 20 years - at age 44. Their pension and health benefits await them.

We are not paying for our pension and medical benefits - and the cat is creeping out of the bag.:embarrest:

 

[k0nkuzh0n]

More good news on Federal Pensions...

The government has promised pension and health benefits worth more than $700,000 per retired civil servant. The pension fund's key asset: federal IOUs.​

<sarcasm>I've never been more confident in my pension than I am right now!!!</sarcasm>

Folks, how many of you have $700,000 in your TSP?

I hope to be there in about 8 years.

I bet the math proves that nobody would have $700,000 in assets at retirement using the only fund our pension invests in. Namely the 'G Fund'. Using a starting salary of $24,000, a starting age of 24, an inflation of 3.1%, a G Fund return of 4.26%, a 15% contribution level increasing with inflation, and working for the Feds till age 65 - I get to $630,000. In inflation adjusted numbers, with an assumption that yours truely will croak at 85, the annual benefit will be $10,000 a year.

But, what about the folks that bang out after 20 years - at age 44. Their pension and health benefits await them.

We are not paying for our pension and medical benefits - and the cat is creeping out of the bag.:embarrest:

You are not including the Health Benefits portion of that

 

[nnuut]

By comparison what did GM do?
General Motors Retirees Sue Over Cuts in Benefits After 2009 Bankruptcy
By Phil Milford - May 11, 2011 10:17 AM ETWed May 11 14:17:27 GMT 2011

Sacrifices were made by every stakeholder, including former executives, to create a foundation upon which the new GM can thrive,” James Cain, a company spokesman, said in a telephone interview. He said the pension plan administrator“properly considered and denied” the claims.

In a Nov. 23 letter included in court filings, plaintiffs’lawyers allege that under a modified retirement plan, only benefits of more than $100,000 a year are to be reduced by two-thirds, and not benefits under $100,000.
In response, plan administrator Janice K. Uhlig wrote on Feb. 8 that GM properly interpreted life-annuity reductions under the U.S. bankruptcy code and she “has the discretionary authority to construe, interpret, apply and administer” theretirement plan.

http://www.bloomberg.com/news/2011-...sue-over-benefit-losses-after-bankruptcy.html

 

[Boghie]

Re(1): 'Postal Workers Alarmed About Their Retirement: 'Sheer Chaos' Over Account Cut, Worker Says', ABC News/Money, Susanna Kim

It begins in earnest...

The Postal Service is not paying the employer portion of the FERS pension. The employee still pays their 0.8% of salary to it:nuts:.

The Postal Service continues to pay the TSP match. My guess is that they are legally obligated to pay that.

Folks, don't count on anything that can be jiggered by others - especially politicians (not the case here, yet).

 

[KevinD]

The FERS account had about a $6.9 billion surplus, according to the Postal Service.

Guffey said Congress should pass H.R. 1351, which he said would allow the Postal Service to apply pension overpayments to the pre-funding obligation.

"This bill would provide the USPS relief from its financial crisis at no cost to taxpayers," Guffey said in a statement

...

 

[Atarrin]

Local union hosted an event here where they would "discuss" the proposed legislation against federal workers. All they really ended up discussing was how important it is that everyone be a dues-paying member.

 

[FundSurfer]

.....really ended up discussing was how important it is that everyone be a dues-paying member.

Man, that is too bad. There is so much on the table right now that it is important that federal employees need to be informed about what is being considered. I'm apalled at how poorly informed my fellow co-workers are.

On the union thing, I'm not a member, but have been giving it serious consideration since I think that it is good to have a voice in DC. Writing letters is good, but I think a lobbyist can have more impact. Especially since a lobbyist can get information to the press to address some of the false information that flies around.