Do you feel confident in the long-term sustainability of the federal pension program?

[Anonymous]

Anonymous wrote:

Anonymous wrote:No, OP us incorrect. FERS is a combination of your contributions and employer contributions, invested in Treasury bonds. It's not in the stock market.

Thanks. Good to know.

This information is readily available, which makes me think posts like OP's are in bad faith - either to rile people up, or to create doubt so it looks like "well at least we kept that" when the administration does other harmful things.

So to be clear: FERS pension is funded from your paycheck, and it is not in the stock market. The fund where it is kept is not projected to run out, ever, despite some liability from the CSRS era that FERS is subsidizing. So suggesting the government might simply refuse to pay out is the same level of seriousness as saying you think they might confiscate your bank account or retract past employer contributions to your TSP. It's not something you say lightly, like "oh, you know how this administration hates feds."

Now could they screw with COL adjustments, or change the contribution rules going forward? Yes, that is possible. Unions do a lot of work on this kind of thing, so if you are a union member you can ask what they've done recently and they'll be happy to tell you.

[Anonymous]

Anonymous wrote:I do not think there will be an impact to service that has already accrued. They will continue to cut benefits for new hires and cut future accruals and might cut COLA increases for people in pay status. That’s what happens in all the other public sector pensions that are under water. This is well trod ground at this point.
Unless you have a Detroit scenario (total financial implosion), you won’t llosr prior accruals. And even Detroit retirees didn’t lose most of it.
Defaulting on accrued pension liabilities is really the third rail. That would be very very bad and unprecedented.

+1. This particular administration might not care, but I think it's an anomaly. Defaulting on federal pensions would be a very bad sign of weakness and Congress is well aware of that.

[Anonymous]

Anonymous wrote:It’s fine. They’ll eventually raise the contribution % for new hires though.

At 4.4% it’s already not a great deal. Maybe they’ll go to high 5 or get rid of the FERS supplement but there isn’t really room to increase the contribution.

[Anonymous]

Anonymous wrote:No, OP us incorrect. FERS is a combination of your contributions and employer contributions, invested in Treasury bonds. It's not in the stock market.

is the FERS fund protected or the money is lent over to something else?

[Anonymous]

Anonymous wrote:

Anonymous wrote:It’s fine. They’ll eventually raise the contribution % for new hires though.

At 4.4% it’s already not a great deal. Maybe they’ll go to high 5 or get rid of the FERS supplement but there isn’t really room to increase the contribution.

I know and a few new hires we made have already left the Govt.

[Anonymous]

Anonymous wrote:

Anonymous wrote:No, OP us incorrect. FERS is a combination of your contributions and employer contributions, invested in Treasury bonds. It's not in the stock market.

is the FERS fund protected or the money is lent over to something else?

"The CSRDF is similar to the Social Security trust fund in that, by law, 100% of its assets are invested in special-issue U.S. Treasury bonds or other bonds backed by the full faith and credit of the U.S. government. When the trust fund needs cash to pay retirement benefits, it redeems the bonds and the Treasury disburses an equivalent dollar value of payments to civil service annuitants."
https://www.congress.gov/crs-product/RL30023

[Anonymous]

DH was one of the last to get into CSRS and took the benefit at 62 to make sure it didn't disappear. We aren't counting on it long term, or at least not with COLAs, but it is nice to have now.

[Anonymous]

Anonymous wrote:

Anonymous wrote:It’s fine. They’ll eventually raise the contribution % for new hires though.

At 4.4% it’s already not a great deal. Maybe they’ll go to high 5 or get rid of the FERS supplement but there isn’t really room to increase the contribution.

Some states pension contributions are 7%, so there is room.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It’s fine. They’ll eventually raise the contribution % for new hires though.

At 4.4% it’s already not a great deal. Maybe they’ll go to high 5 or get rid of the FERS supplement but there isn’t really room to increase the contribution.

Some states pension contributions are 7%, so there is room.

Yes, Maryland requires 7% and doesn’t vest until 10 years. It was such a bad deal. Then they offered a 7% yearly 401k contribution if you didn’t sign up for the pension plan. So it was like a choice to lose 7% or gain 7% of salary.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It’s fine. They’ll eventually raise the contribution % for new hires though.

At 4.4% it’s already not a great deal. Maybe they’ll go to high 5 or get rid of the FERS supplement but there isn’t really room to increase the contribution.

Some states pension contributions are 7%, so there is room.

They would have to increase the benefit. No state has a 7% contribution and a 1%/yr pension.

[Anonymous]

where are the FERS funds kept?

[Anonymous]

Anonymous wrote:I do not think there will be an impact to service that has already accrued. They will continue to cut benefits for new hires and cut future accruals and might cut COLA increases for people in pay status. That’s what happens in all the other public sector pensions that are under water. This is well trod ground at this point.
Unless you have a Detroit scenario (total financial implosion), you won’t llosr prior accruals. And even Detroit retirees didn’t lose most of it.
Defaulting on accrued pension liabilities is really the third rail. That would be very very bad and unprecedented.

Yes. Accrued benefits are legally guaranteed, because it's a contract. It's not a complete guarantee, but you can depend on them much more than any investments, which can go up or down. It's future accruals that are not guaranteed.

[Anonymous]

I think as the people collecting CSRS goes down, the load will get lighter and, for new employees, the pension benefits will go down. So I think they’ll be able to maintain whatever is left. But right now we have a higher number of relatively younger retirees who would not have left as early if it wasn’t for the current Administration. I wonder if that will strain the already strained system.