The end of FERS Supplement - and other stuff

[Scout333]

I don't think they can do what is outlined in Trump's plan. All major changes to government employee compensation has applied to new employees, FERS, FERS-RAE & FERS-FRAE. CSRS Offset employees had special rules for those that had a certain number of years under CSRS.

Interesting article from earlier this year https://chiefhro.com/2017/01/10/6-civil-service-changes-we-can-expect-from-the-115th-congress/

I happen to have the CSRS Offset plan as I left and returned to Civil Service. Whoo that is a wild ride! When I started the Offset plan in 1987 there was only one lady in DC who could answer questions about the plan. All I heard was trust us it'll be fine! It actually turned out to be like FERS without the matching and the Supplement. You pay SS and Medicare on your salary and the net difference between SS and CSRS ( .8%) if I remember correctly. They then pay your regular CSRS annuity less the SS pension you draw based on your Offset years. Then you receive a Soc. Sec. Pension as adjusted if you have less than 30 years of SS earnings including your Offset years. Exciting enough for you yet? Also, you have to draw your Soc. Sec. at 62 whether you want to or not. They still reduce your CSRS annuity by your Soc. Sec. receivable at 62 whether or not you actually received it yet.

Watch the changes but don't freak out. It may change a thousand time or not before the budget is finalized. They have been trying to cut our pay, benefits, and retirement for the last 40 years through Democrat and Republican administrations alike. My WAG is that major changes will impact new hires only.

 

[tsptalk]

Update:

Proposed Changes to Retirement Benefits

Good News! We have dodged the bullet....for now. Today, the House narrowly adopted the Senate's budget, and the Senate's version did not include instructions for reducing federal expenditures through reductions to federal retirement benefits. The big debate in DC now will be over tax reform.

There's more but I didn't want to post too much in case this is only for subscribers to his service.

https://fersguide.com/

 

[weatherweenie]

There are plenty of FERS employees that are forced to retire at 56. Think air traffic controllers, LEO, fire fighters, etc. What do you say to those people? Tough luck?

I had to wait to take my Social Security until I was 62, but I took it at 64 and 9 months why should FERS folks be able to retire early and get a subsidy? I paid 8% for the whole time into my retirement plan, you paid less than 1% I was CSRS and qualified for Social Security they cut my SSN by 60% when I retired, you FERS folks are complaining, what for?

 

[uscfanhawaii]

Additional info from govexec.com. Including possible 0% raise for 2019.

House Vote Takes Federal Retirement Cuts Off the Table For Now - Pay & Benefits - GovExec.com

 

[Happy_Trails]

There are plenty of FERS employees that are forced to retire at 56. Think air traffic controllers, LEO, fire fighters, etc. What do you say to those people? Tough luck?

The only thing that might make sense is to limit the benefits changes to new hires. At least you know going in what to expect. To change the rules on employees who have been onboard for decades and are getting ready to retire is not right, especially those forced to retire at 56.

 

[evilanne]

I came across this recently, it is at the state & local level, but it is a bad precedent if it ever comes to Federal Pensions or Social Security. Facts are somewhat different as the RI's legislative process isn't recorded http://www.businessinsider.com/rhod...-be-a-warning-sign-for-social-security-2018-2

 

[BamaAF]

This post scared the crap out of me - I retired @56 (36 years xx months) and am 58 now - whew

 

[RazorCat]

The only thing that might make sense is to limit the benefits changes to new hires. At least you know going in what to expect. To change the rules on employees who have been onboard for decades and are getting ready to retire is not right, especially those forced to retire at 56.

Of the many different iterations of retirement contributions and benefits changes I've seen proposed by Congress or the WH they do impact only "new hires". I know I may have missed one, but those I've seen don't affect those currently retired. For those currently employed, but not retired, I have read that there have been proposed changes to their level of contributions to retirement, but not to retirement benefits they were promised when hired. Of course, that could all change with the stroke of a pin. But, what's new. I heard the same song and dance in 30 years of working for DOJ, and though multiple administrations.
The thing that always seems to stick out to me (as noted in the Govexec article) is these proposals always seem to unfairly target FERS employees and retirees. For instance, elimination of the FERS supplement, and elimination of COLAS for FERS employees while only a reduction in CSRS COLAs of 0.5%. Funny thing is, FERS was fully funded until they started robbing money out of it to cover unfunded liabilities in CSRS, yet these proposals always seems to target the FERS cash cow.

 

[evilanne]

I agree RazorCat--most changes will most likely apply to new employees. Them going after FERS employee doesn't make any sense;swear

FERS retirement system is fully funded currently, it is the CSRS system that was never funded properly. If you retire early, you currently don't get any COLA until you reach 62 and then your pension is at a lower percentage than what CSRS retirees get for equal years of service. My pension is frozen for more than 10 years, so the Supplement will help @ MRA. If they get rid of the supplement, the end result will be that those employees will remain longer at the higher end of pay scale; if they wait until age 62 they get 1.1% vs 1% per year--resulting in higher payroll (current costs) and retirement costs (future costs) in the long run.

Under CSRS, they get COLAs the year after they retire with higher pensions. They only go after FERS because there are more federal employees under the new system now :saroll:

 

[kam]

You don't consider the 0.5% reduction in COLA for CSRS significant? I would say they are not "only going after FERS." Usually they don't go after retirees because they cannot change much at that point, so I'm hoping this is just a bargaining chip, but feel there not many that care about people with pensions.

I will say the few that jumped from CSRS to FERS when FERS came along, in my agency, at least the ones I know of their personal situations, they faired quite well, mostly because of the TSP contributions by the government (and a good market).

 

[evilanne]

You don't consider the 0.5% reduction in COLA for CSRS significant? I would say they are not "only going after FERS." Usually they don't go after retirees because they cannot change much at that point, so I'm hoping this is just a bargaining chip, but feel there not many that care about people with pensions.

I will say the few that jumped from CSRS to FERS when FERS came along, in my agency, at least the ones I know of their personal situations, they faired quite well, mostly because of the TSP contributions by the government (and a good market).

No one said .5% reduction for CSRS was insignificant but it is only a fraction of the proposed cuts (or increases) to FERS being proposed. COLA reductions to FERS retirees are already baked into any COLA > 2%. Historically, FERS COLAs have been between 0 to 1% below SS & CSRS COLAs - Cost of Living Adjustment (COLA) | 2018 Federal FERS & CSRS Annuity Adjustments. FERS retiree also don't get any COLAs until age 62. To cut it further makes no sense--not that any cut isn't significant to those that are impacted. In other words, the implementation of FERS already cut the COLA for FERS retirees back in the mid 1980s.

The change from CSRS to FERS actually made a lot sense, which is why FERS has always been adequately funded and also increased number of employees subject to Social Security resulting in lower overall cost to the government. The supplement was to bridge the gap for the SS leg of the stool between MRA & age 62 when eligible for social security at a discounted rate (approximately 25-30% below SS @ FRA depending on when you were born) The ones with FERS offset have a combination of both systems which can be good or bad depending on the specific situation.

TSP is a great benefit for those who take advantage of it and contribute more than just the 5% matching over the years. If invested well, one can achieve the same level of retirement income as someone under CSRS gets from their pension alone--but this would be more of the exception rather than the rule. The FERS was in effect already a cut to the CSRS, placing more responsibility on the employee to plan for retirement while reducing the overall cost to the government.

 

[RazorCat]

You don't consider the 0.5% reduction in COLA for CSRS significant? I would say they are not "only going after FERS." Usually they don't go after retirees because they cannot change much at that point, so I'm hoping this is just a bargaining chip, but feel there not many that care about people with pensions.

I will say the few that jumped from CSRS to FERS when FERS came along, in my agency, at least the ones I know of their personal situations, they faired quite well, mostly because of the TSP contributions by the government (and a good market).

I consider anything that adversely affects retiree pay to be significant. But, continuing to get a COLA with a mere 0.5% reduction (CSRS) is significantly more advantageous than eliminating COLAs altogether (FERS) on top of losing a significant portion of your retirement pay (FERS Supplement).
Add that to the fact that FERS employee contributions are being used to cover the unfunded liabilities of the CSRS, and will for decades to come, and it would appear the targeting of FERS benefits vs. CSRS benefits is out to balance.
CSRS Budget and Trust Fund Issues
Nothing against CSRS retirees, I almost was one (would have converted to FERS).
It simply is, what it is.

 

[weatherweenie]

Do the math. 0.5% over the course of 20-30 years, it adds up.

Same thing, on a bigger scale, with pay freezes.

I consider anything that adversely affects retiree pay to be significant. But, continuing to get a COLA with a mere 0.5% reduction (CSRS) is significantly more advantageous than eliminating COLAs altogether (FERS) on top of losing a significant portion of your retirement pay (FERS Supplement).
Add that to the fact that FERS employee contributions are being used to cover the unfunded liabilities of the CSRS, and will for decades to come, and it would appear the targeting of FERS benefits vs. CSRS benefits is out to balance.
CSRS Budget and Trust Fund Issues
Nothing against CSRS retirees, I almost was one (would have converted to FERS).
It simply is, what it is.

 

[weatherweenie]

This budget proposal is an assault on all government employees and retirees.

Pay freeze, FERS supplement and and lower to no COLA for retirees are unacceptable.

 

[RazorCat]

Do the math. 0.5% over the course of 20-30 years, it adds up.

Same thing, on a bigger scale, with pay freezes.

Again, absolutely nothing meant negative about CSRS retirees. But, a 0.5% reduction and getting some sort of COLA is better than nothing at all which is what was proposed for FERS. There's never been COLAs given on the FERS supplement.
The House striped that, and several other provisions out anyway, so it's not a factor at this point.

 

[nnuut]

We CSRS retired Employees are the Enemy,,,,, AGAIN!

 

[nasa1974]

CSRS retiree's that earned Social Security credits outside the government will see a huge deduction to their SS dollars when they try to collect.

 

[evilanne]

I think the strategy is to attack government benefits that they are unlikely to ever get passed for existing employees so that when none of these come to fruition, existing employees will be more accepting of future pay freezes. A replacement system to FERS for new employee would likely be years down the road as they already modified the existing system with FERS-RAE & FRAE (https://www.fedsmith.com/2014/04/07/fers-fers-rae-fers-frae-what-does-all-this-mean/) Just look at the current implementation of BRS (modeled after FERS) http://militarypay.defense.gov/Port...ne_02152017 (2).jpg?ver=2017-02-27-084201-583. As previously stated, FERS is not the problem.

 

[evilanne]

We CSRS retired Employees are the Enemy,,,,, AGAIN!

Actually the enemy is Congress who never properly funded CSRS and who want to mess with FERS now.

 

[nnuut]

CSRS retiree's that earned Social Security credits outside the government will see a huge deduction to their SS dollars when they try to collect.

Actually they reduced my SSA by 60% and we didn't get that 5% Matching TSP thing, and I paid 8% a year for retirement for 36 years. How much more does the FERS need, take all you want.