Fed Employee Possible Retirement Change
Moderator: Aitrus
Re: Fed Employee Possible Retirement Change
Look at the CBO Report, Table 1, https://www.cbo.gov/system/files/115th- ... rement.pdf
The header is "Percentage Change in the Government's Net Outflows" over 10 years means that option 4 will increase cost more in the next 10 years than option 5, which makes more sense. The note for the nominal cost column where the 24% & 17% were taken "a. Net out flows represent an increase in budget deficits. They include outlays for FERS pension benefits, plus the government’s contributions to workers’ TSP accounts minus revenues from employees’ contributions to the pension plan. The percentage change in net outflows is measured relative to net outflows for the FERS pension and TSP."
Percentage Change to Nominal outflow is NOT = to cost savings
The header is "Percentage Change in the Government's Net Outflows" over 10 years means that option 4 will increase cost more in the next 10 years than option 5, which makes more sense. The note for the nominal cost column where the 24% & 17% were taken "a. Net out flows represent an increase in budget deficits. They include outlays for FERS pension benefits, plus the government’s contributions to workers’ TSP accounts minus revenues from employees’ contributions to the pension plan. The percentage change in net outflows is measured relative to net outflows for the FERS pension and TSP."
Percentage Change to Nominal outflow is NOT = to cost savings
Re: Fed Employee Possible Retirement Change
Aitrus wrote:
I'm not sure what % the government puts into FERS, but maybe somebody can answer that for you.
On the bottom of my LES under "BENEFITS PAID BY GOVERNMENT FOR YOU" the number for "RETIRE, FERS" comes out to about 13.9%.
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Re: Fed Employee Possible Retirement Change
Many thanks to Aitrus and evilanne for getting me to read the CBO's report (to compare it to the article written by govexec.com which tried to explain the CBO's report and got it wrong). I finally found the discrepancies and the NEWS agency got 3 out of 5 options correct (that's good enough for government work, right?)
The interesting thing the CBO report showed is that Options 4 & 5 are actually beneficial to the employee while eventually (year 2091) saving the government a lot of money. Unfortunately, the government costs of a new TSP only plan are paid up front (no gov costs after retirement). This would add costs for switching to a new better retirement plan to the already existing obligations paid to current and future CSRS and FERS retirees.
I think that even though the TSP-only plan looks like a win-win, it will probably get shot down due to higher costs over the next few (10) years.
Too bad, I'd switch to option 4 if I was a newbie with less than 5 years in.
The interesting thing the CBO report showed is that Options 4 & 5 are actually beneficial to the employee while eventually (year 2091) saving the government a lot of money. Unfortunately, the government costs of a new TSP only plan are paid up front (no gov costs after retirement). This would add costs for switching to a new better retirement plan to the already existing obligations paid to current and future CSRS and FERS retirees.
I think that even though the TSP-only plan looks like a win-win, it will probably get shot down due to higher costs over the next few (10) years.
Too bad, I'd switch to option 4 if I was a newbie with less than 5 years in.
mo meng, mo ching (which loosely means: no money, no life)
Re: Fed Employee Possible Retirement Change
I would be careful before jumping into anything new too soon. Uncle Sam rarely does anything that doesn't help him more than it does the common fed.
Re: Fed Employee Possible Retirement Change
GoWest wrote:I would be careful before jumping into anything new too soon. Uncle Sam rarely does anything that doesn't help him more than it does the common fed.
That's a fact.
- dougellen1
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Re: Fed Employee Possible Retirement Change
To clarify, I am old (61) and extremely well paid ($169K) with tons of responsibility.
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Re: Fed Employee Possible Retirement Change
I was told the same thing when I was a CSRS employee given the option to convert to the "new" FERS plan back in '97. As it always should, it comes down to doing your research and being brave enough (or less than bright to pull the trigger and pray you saw all the variables and the math was right. It's 2019 and it looks like I got enough of it right. I switched on the last possible day to FERS (12/31/1997?) and it netted me an extra 200 dollars a month and a tidy backup plan in the TSP.GoWest wrote:I would be careful before jumping into anything new too soon. Uncle Sam rarely does anything that doesn't help him more than it does the common fed.
Do the math. Check it twice. I hope you are as lucky(or better!) with your results as I was.
Live long and prosper!
T
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