Feds: are you counting on FERS for retirement?

[Anonymous]

Not a lawyer here but I am a lifelong fed who is positioned to get a nice FERS pension. I’ve also built a good TSP and our house will be paid off. But of course FERS will be an important consideration as to when I can safely retire. Given all the craziness in politics and the growing federal debt, is there any real concern that Congress would reduce FERS payouts in the future? I know that we pay into the system so I assume there would be legal challenges but I have no clue how successful those challenges might be.

[Anonymous]

Not worried. And I am only 40. They will continue to make new hires pay more and/or have less benefits, but we are safe.

[Anonymous]

Hell yeah, I am counting on it.

[Anonymous]

Definitely counting on it. Not counting on Social Security.

[Anonymous]

I’m 45 and absolutely will depend on it. I took a lower paying career as a fed in part because the retirement benefits were the trade off on salary. I’m patriotic and enjoy working for the American people, but I’m realistic about financial needs and I wouldn’t be there for this pay if not for the retirement benefits.

(And as they further chop retirement benes for new hires, they will leave instead of staying like I am. I anticipate a new trend of 7-10 years of service max)

[Anonymous]

Definitely counting on it. Two-fed family. I suppose we would not be destitute without it, but it would be a huge problem.

If things get so bad that FERS and SS cannot pay out, I would think we have bigger problems such as the collapse of our nation.

[Anonymous]

Of course I'm counting on it. I pay into it, my agency pays into it, it's part of my compensation and offsets my lower salary.

I wouldn't put it past politicians to eff with it, but that's true of everything and it's about 95th on the list of infuriating things they might do to feds.

[Anonymous]

I think the biggest threat to FERS is that they cut the inflation adjustment which will substantially reduce the value of the pension. That has been one of the proposals put forward and while I think the % payout would not be changed for existing employees the inflation adjustment could be changed, even for current employees.

[Anonymous]

i'm absolutely counting on it.

[Anonymous]

Anonymous wrote:I think the biggest threat to FERS is that they cut the inflation adjustment which will substantially reduce the value of the pension. That has been one of the proposals put forward and while I think the % payout would not be changed for existing employees the inflation adjustment could be changed, even for current employees.

Today I learned that FERS has an inflation adjustment.

[Anonymous]

Anonymous wrote:I think the biggest threat to FERS is that they cut the inflation adjustment which will substantially reduce the value of the pension. That has been one of the proposals put forward and while I think the % payout would not be changed for existing employees the inflation adjustment could be changed, even for current employees.

Can I ask where you read this? The most recent bill proposed on this topic actually sought to do the opposite- remove the restrictions on COLA increases faced by federal employees.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I think the biggest threat to FERS is that they cut the inflation adjustment which will substantially reduce the value of the pension. That has been one of the proposals put forward and while I think the % payout would not be changed for existing employees the inflation adjustment could be changed, even for current employees.

Can I ask where you read this? The most recent bill proposed on this topic actually sought to do the opposite- remove the restrictions on COLA increases faced by federal employees.

DP. There's a list of cuts that have been proposed over the years. The ones that got through were raising the contribution for new employees (twice). Others that have been proposed are changing the basket of good that is used to compute the inflation calculation (ie cutting the COLA) and switching to a high 5 rather than high 3. I think there are others as well.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I think the biggest threat to FERS is that they cut the inflation adjustment which will substantially reduce the value of the pension. That has been one of the proposals put forward and while I think the % payout would not be changed for existing employees the inflation adjustment could be changed, even for current employees.

Can I ask where you read this? The most recent bill proposed on this topic actually sought to do the opposite- remove the restrictions on COLA increases faced by federal employees.

Sure, here is one source below. I don't want to turn this into the politics forum but it is a proposal that has come up a few times and while I think the risk is somewhat small, it would be very detrimental to the value of the pension if it ever passed. There are also a few bills like the one you mentioned that propose removing the "diet" COLA.

https://www.govexec.com/pay-benefits/2024/03/house-conservatives-recycle-federal-worker-pay-and-benefit-cuts-budget-document/395216/

The committee’s benefits proposals may sound familiar, because the vast majority were a part of then-President Trump’s budget plans each year he was in office, though none ever became law. Federal retirees’ annuity benefits would be calculated using the highest five years of an employee’s salary, rather than the current high three, increasing the amount federal workers must contribute from their paychecks toward the Federal Employee Retirement System, “reducing or eliminating” annual cost of living adjustments for federal pensioners, and reducing the yield on the Thrift Savings Plan’s G Fund to track a shorter-term Treasury bill. TSP officials have repeatedly said that last provision would make the G Fund functionally useless.

[Anonymous]

Absolutely!

[Anonymous]

Anonymous wrote:Not a lawyer here but I am a lifelong fed who is positioned to get a nice FERS pension. I’ve also built a good TSP and our house will be paid off. But of course FERS will be an important consideration as to when I can safely retire. Given all the craziness in politics and the growing federal debt, is there any real concern that Congress would reduce FERS payouts in the future? I know that we pay into the system so I assume there would be legal challenges but I have no clue how successful those challenges might be.

Yes - I am counting on it.