Replies

,i. There is one small bright spot in this mess, and you can thank Reagan for it. In 1986, they reformed the Federal pension system and had all incoming employees enroll in a much cheaper system that used mostly a 401(k) type plan. The problem is that everyone who started before 1987 stayed in the old system.

Over time, the percentage of retirees will shift from the old system to the new system, so things should actually be significantly better in 20 years than they are now, from a financial point of view.

The reform was only superficial. Federal employees consistently underestimate their bloated retirement compenation focusing on the relatively low 1% benefit rate. Federal employees conveniently forget their very low contribution rate (less than 1 percent), the Social Security catchup (Federal retirees effectively can receive Social Security beginning at age 57), early retiree medical care extending into retirement, and the employer 401K contriibution (5 percent). Federal employees have both a defined benefit and defined contribution plan. In sum, federal retirement compensation is on par with the most generous state plans.

The worst part about federal pensions and health care is that it is all unfunded. The unfunded liabilities are enormous and growing as the article indicates. Contrary to assertions mande by apologists for this horrible situation, federal pensions are a large part of the debt problem and growing into a much larger problem.

Try your analysis next time by paying interest to the employee deposits as though they were bonds held by the Chicom government.

BTW, some agencies pay additional contributions to the retirement system. Those too are forced loans to the government.

Well, I still think it’s overly generous. But continuing CSRS would have been worse. Muahwiyah, if people do work to 90, no problem if they are productive until then. We won’t have to spend much on their retirement. Dragnet2, the Heritage Foundation has done some good work on Federal-private comparisons. It’s not as bad as 2-1 if you take into account the nature of Federal work and locality, but Federal workers still do very well.

A question for conservatives if we stripped government down to its Constitutional limitations, how then should we compensate Federal employees? You’d still need some people working for the Feds.