Are Feds offering pensions to new employees?
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Anonymous
| Does a new start at a US federal agency/department position (not active military) get future pension accrual as part of the benefits plan? Obviously existing employees with pension options continue to accrue them, but is the US govt still offering defined benefit pensions to new employees? |
Anonymous
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Yes, but as of 1/1/2013 new employees have to pay 3.1% of their salary towards the pension. Employees hired before that only paid 0.8%.
http://www.opm.gov/blogs/Retire/2013/5/13/FERS-Revised-Annuity-Employee-FERS-RAE/ |
Anonymous
| There's no such thing as a pension in the federal government. What we get is contributions to our Thrift Savings Plan. |
Anonymous
| Yes, there is a pension. You aren't eligible until you work 5+ years. Check the OPM website. |
Anonymous
Yes there is. For FERS there is a small pension (1 percent times the number of years), social security, and TSP. If you retire before 62 there is a bridge payment to make up for the fact that you can't receive social security yet. The bridge payment goes away when you turn 62. You need to take your agency's retirement class if you are a federal employee so you will be prepared for retirement when the time comes. Does not sound like you are if you don't know about the pension. It is not as much as the CSRS pension, but it is better than no pension. |
Anonymous
| OP, here. I'm not employed by the Feds. I was just wondering as I find it inappropriate to be offering new employees in any industry a defined benefit, but particularly inappropriate for a government with such massive and worsening budget problems and a poor track record of managing talent (ie, allowing poor workers to remain in service and accrue exceptional benefits for inefficient work). |
Anonymous
Government employment is one of the last bastions of the middle class in the US. People shouldn't be looking at taking away what the government workers still get, but instead be asking why everyone else was allowed to erode workers' benefits to the sad point they are at now. But if you like, you could instead pay us obscene amounts of money in line with the private sector, allow the researchers to retain the patent rights to their discoveries, let us charge the public directly for the services that are provided at the extortionist rates of something like the cable companies, and then we'll see. |
Anonymous
"Government employment is one of the last bastions of the middle class in the US." - I don't know what your point is, but the fact that you think government should be the employer of last resort is indicative of the sad direction we are going away from private enterprise and towards a government dominated state. "People shouldn't be looking at taking away what the government workers still get, but instead be asking why everyone else was allowed to erode workers' benefits to the sad point they are at now." - I never said take away pensions. I said it's inappropriate to continue enrolling new pensioners. People are at economic actors and will take whatever jobs offer the best package of compensation. If government truly is the "last bastion of employment" then pensions should not be required to attract candidates. Regarding the erosion of benefits ... more socialist talk there. Benefits should reflect only what the company can provide to still operate profitably, and what the company can provide is reflective of what the company and employees produce. Workers don't deserve benefits that prevent the company from continuing to operate. "you could instead pay us obscene amounts of money in line with the private sector," - Why? Under what justification do government employees deserve more than than they're getting in aggregate now? They are by most accounts very well employed with great benefits and there's no shortage of candidates for each opening, which says to me that the pay is more than sufficient for the requirements of the job. Create more economic or social value, and earn more. If you can qualify for obscene private sector pay, you should pursue it. I do not believe that altruistic compulsion to "serve" is the driving motive for all but a minute percentage of government employees - it's the comfy economic benefit. "allow the researchers to retain the patent rights to their discoveries" - I largely agree with this, or at least believe there should be some incentive for government employees to benefit from their exceptional contributions. This in fact is a core criticism of offering defined benefit prospectively ... it's a blanket reward for undefined contribution - it offers neither upside nor downside for above or below average work. "let us charge the public directly for the services that are provided at the extortionist rates of something like the cable companies, and then we'll see" - Private enterprise has been demonstrated to run most non-essential services better than government, at lower cost and higher efficiency. So, yes, I agree that we should open many government services and regulated private industry for competition. Defined pension for essential and dangerous services like the military is eminently reasonable to me, as it is necessary to attract candidates and a fair compensation for exceptional service. Pushing paper in most agencies does not strike me the same way. p.s. I don't work for the Feds, but I spent close to five years there a decade ago, and I've seen plenty of the insides to have a generally pessimistic view of the efficiency of several agencies and necessity of public management of several services. |
Anonymous
I'm a retired Fed worker. Delighted to receive my pension on the first business day ever month. 
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Anonymous
| OP here again. Let me also clarify that I think the TSP is a great and appropriate benefit. I am all for contribution based retirement options. It's the defined benefit that I find inappropriate ... partially b/c we have no idea what future market returns will be and I suspect that actuarial return assumptions are too high, which means that additional revenues will be required to pay promised benefits if the current investment pool does not achieve its return objective. |
Anonymous
I don't think you know what you are talking about |
Anonymous
TSP and Pension are 2 different things. Both may have employer and employee contributions. |
Anonymous
How so? The difference between a defined contribution (eg, TSP) and a defined benefit (FERS) is the question. Do YOU know the difference between DC and DB plans? Do YOU know how each is funded, how each is managed, by whom, and how benefits are provisioned? You have no idea of my credentials, but I am quite sure I understand how various pensions work and the risks and liabilities associated. |
Anonymous
No s, Sherlock. That's the point. One is funded now based on known resources and has no future liability (TSP - a Defined Contribution). The other (a pension - Defined Benefit) is partially paid now, but has a big associated liability that is promised but only funded later from the contributions of new enrollees and the investment returns on the existing trust ... primarily the latter. If returns are not achieved to meet the promised benefit, guess what happens ... we all pay more taxes and the government takes on more debt to pay their obligations. I'll save the economics lesson, but neither of these outcomes are good. I am now concerned that the PPs questioning my understanding are the ones that don't understand how their benefits work ... further enhancing my skepticism about the legitimacy of the DB offerings. |
Anonymous
Given that you had no idea about a question that could easily have been answered with 2 minutes on the opm website or on google, I don't have a ton of faith in your credentials. |