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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=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.[/quote]

TSP and Pension are 2 different things. Both may have employer and employee contributions.[/quote]

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.[/quote]

Actually, the reason I suggested you didn't know what you are talking about is that you seemed completely unaware of the difference between private and federal pension funding, and the requirements that apply to federal pensions.  The only returns that the federal trust fund for pensions can achieve is interest on Treasury bonds-- they are completely unlike funding sources for state or private pensions that might be relying on gains from the stock market.  Moreover, that trust fund is projected to have increasing balances for at least 65 years.  So I'd appreciate it if you would save the condescension, as well as the "economics lesson".[/quote]

Fair enough.  You are correct that I had not appreciated the differences between the CSRS and FERS asset/liability calculation and "prefunding" of FERS.

Even for FERS, however, the actuarial assumptions are dubious and the increasing balances for 65 years is unlikely ... particularly as they're expected to decline for the next 5-10 years and only rebound in the far out years, when it's nearly impossible to predict economic conditions.[/quote]

You didn't know anything about FERS as of 10:15 this morning, but now you've concluded the actuarial assumptions are dubious?  Pass. [/quote]

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