This debate comes up at work every so often. I'm a FERS employee and am told by most CSRS employees that CSRS is better. That anytime the government makes a change, you can bet its not in the interest of the employee...

However with the little knowledge I have on the subject, I happen to disagree. Wouldn't the 5% government match over a lifetime of contributing to TSP more than make up for the higher pension CSRS gets?

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TSPking

Truth is treason in the empire of lies ~ Ron Paul

I have a bunch of friends who are/were planning to retire. The ones under CSRS are still going and are happy while the ones under FERS are now looking at having to stay for a few extra years. I think this just about covers it. I think the extra 5% doesn’t equal the extra the CSRS folks bring in.

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"Privatized profits and socialized losses"


Dr Pain 2008

Whether one is better than the other doesn't matter: we're stuck in FERS. So it's not the 5% match that's important. It's what you do with your allowed allocations to make your pot of gold increase to the maximum it can get. This means using every available web site (I do not like TSP Pilot-- too slow to recommend changes), keeping close tabs on changes to the TSP share prices, trends, etc. Add the 11 A.M. Central Time cut-off doesn't make it any easier. But the goal is to keep your eye on the prize-- a great retirement. Anybody watch Wealth Track on PBS? You can also watch it on their web site. A few weeks back an insurance specialist was talking about the problem more and more senior citizens have with running out of retirement money at age 88, and having to make dramatic lifestyle changes for the remaining 10 years they'll live. So I take my allocations seriously. This web site is a learning tool for the best and brightest. The opportunity to see others select allocations is wonderful. Let's see what happens with my 100% S Fund selection compared to the other players. Let the game begin, and let's hope evereyone is a winner. After all, it's our retirements.

As a CSRS employee I don't need my TSP Funds to supplement my income at retirement. By moving my acct to an IRA at retirement I'll have greater control over managing my own funds and opportunity for growth for 8 to 10 years before I begin to take distributions. By contrast the FERS employee is almost compelled to start drawing from their TSP funds at retirement to supplement their reduced pension.

I switched from CSRS to FERS because I would qualify for Social Security and my pension would be more than staying in CSRS. Plus by retiring before 62 I get a FERS Annuity Supplement until I can start to draw on Social Security. I will lose the supplement but my Social Security is three times higher. I was able to contribute 15% to TSP along with the government's 5% meant that 20% was going into the C, S and I when those funds were high fliers. Switching worked for me but only because I had Social Security credits going into FERS.

chuck

It is my understanding, that nationally the average retiree only draws 13 retirement paychecks after retirement. If you retire too soon, they have to payout more money than they projected. So for every 13 months that you live after retirement, you double the amount they had planned on. They are just like an insurance company in that they are betting on the averages. When you retire at a younger age and with the average lifespan increasing, you are costing the retirement fund way too much money and they are changing that.

Good Luck, You are fighting a big machine with a big agenda.

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Thank You!

jeffvan1 wrote:

As a CSRS employee I don't need my TSP Funds to supplement my income at retirement. By moving my acct to an IRA at retirement I'll have greater control over managing my own funds and opportunity for growth for 8 to 10 years before I begin to take distributions. By contrast the FERS employee is almost compelled to start drawing from their TSP funds at retirement to supplement their reduced pension.

Seems to me to be an debate that is no longer worth debating. Since the mid 80's, FERS was the only game in town.

rmb50 wrote:

Seems to me to be an debate that is no longer worth debating. Since the mid 80's, FERS was the only game in town.

Agreed. While FERS may not stand up to CSRS, it is what we have now and better than one most other retirement 'pensions' offer. We're lucky to have it.

You moderators may put this where you will but I did not see it alreeady posted

Retirement Reform Bill Clears the House

By Amelia Gruber agruber@govexec.com <mailto:agruber@govexec.com> April
1, 2009

The House on Wednesday approved a retirement reform measure that
includes language ensuring sick leave is treated similarly in both
federal retirement systems.

The bill (H.R. 1804
<http://thomas.loc.gov/cgi-bin/query/z?c111:H.R.1804:> ) would give
workers in the newer Federal Employees Retirement System credit for
their unused sick leave when they retire, putting them on par with
colleagues in the older Civil Service Retirement System. It also
contains provisions to enroll new employees automatically in the Thrift
Savings Plan and create a Roth Individual Retirement Account option
within the 401(k)-type program. It gives the TSP board the authority to
add self-directed investment window options if doing so is in the best
interest of participants.

Finally the legislation, sponsored by House Oversight and Government
Reform Committee Chairman Rep. Edolphus Towns, D-N.Y., would remove
rules that effectively penalize CSRS employees for working part-time at
the end of their careers and allow FERS employees returning to
government after a stint in the private sector to reinvest their
retirement savings and claim credit for previous service.

The House passed the 2009 Federal Retirement Reform Act by a voice vote.

Federal employee and managers' groups praised passage of the bill,
especially the provision equalizing sick leave policies under FERS and
CSRS.

"Both groups of employees are dedicated public servants and both groups
deserve to have their sick leave counted," said Colleen Kelley,
president of the National Treasury Employees Union.

The Federal Managers Association noted that the measure would give FERS
employees incentives to avoid taking unnecessary sick days, reducing the
cost of sick leave to the government. FMA also applauded the TSP
provisions and incentives for FERS employees to return to government
service.

Darryl Perkinson, the group's national president, urged the Senate to
take up the measure and pass it quickly.

TSPking wrote:

This debate comes up at work every so often. I'm a FERS employee and am told by most CSRS employees that CSRS is better. That anytime the government makes a change, you can bet its not in the interest of the employee...

However with the little knowledge I have on the subject, I happen to disagree. Wouldn't the 5% government match over a lifetime of contributing to TSP more than make up for the higher pension CSRS gets?

You also have to add in the extra COLA that the CSRS get versus FERS.
I am glad I didn't switch to FERS. I'll do without the 5% match.

And the FERS employee's concern for their retirement funding prompting them to also open a brokerage account to take advantage of stock price cycles. I would say FERS is an improvement.