Reply to Feds: are you counting on FERS for retirement?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]I doubt if FERS would be around if our country continues to take debt like this. FERS is invested in T-bonds and how do you think that would play out?[/quote]

If T bonds collapse, every bank fails, all commerce would halt, FERS will be the last on my mind. [/quote]

It is not the collapse but double digit interest rates on T-bonds. Imagine how much they would be paying for FERS and congress would find it easy to take away some of the benefits. [/quote]

FERS isn’t “invested” in “t-bonds” any more than SS is in a “lock box”. It’s all paperwork notations. The cost of FERS doesn’t go up when interest rates go up (the cost of borrowing does but that would be true for any federal spending). [/quote]

so, where are the FERS $s saved? It has to be in some form of bonds, correct? [/quote]

No, it’s not saved. Someone writes down a note in a ledger that they will owe $x for whatever years and when those years come along they pay what they owe.

The entire federal government is on a pay as you go system. [/quote]

this means FERS money owed would disappear?[/quote]

FERS is a promise to pay you just like a Treasury note is a promise to pay you. If the US government stops making good on its promises things will have hit the fan. [/quote]

From this report cited earlier: https://www.opm.gov/about-us/reports-publications/fy-2022-civil-service-retirement-and-disability-fund-annual-report.pdf 
All Fund investments are in interest-bearing U.S. Treasury securities guaranteed as to 
principal and interest. Throughout the year, monies are invested initially in Certificates of 
Indebtedness (“Certificates”), which are issued at par value and mature on the following June 
30. The Certificates are routinely redeemed at face value to pay for authorized expenditures. 
Each June 30, the outstanding Certificates are “rolled over” into government account series 
(GAS) securities that are issued to the Fund at par-value, with maturities spread over a 15-
year period and a yield equaling the average of all marketable U.S. Treasury securities with 
four or more years to maturity.[/quote]

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