Die at Your Desk Club has Immediate Openings!

Friday - 1/14/2011, 4:00am EST

Based on the low percentage of federal workers who belong to unions or job-related professional groups, one could assume that feds are not, as a rule, joiners.


That could change as Congress zeroes in on civil service retirement benefits and considers introducing private-sector style job insecurity to the federal service. In fact if retirement benefits are reduced (basing annuities on the highest 5-year average salary rather than the current high-3 formula) that could force tens of thousands of current civil servants either to work much longer than they plan or to move into the DAYD Club and expire at work!

The bipartisan deficit reduction commission proposed a number of cuts in federal benefits. Many of them , including the feared high-5, have been translated into legislative form.

Many feds accepted the White House-imposed 2-year federal pay freeze (the commission wanted a 3-year freeze), but they are reacting strongly to the plan to reduce future retirement benefits. According to Congressional Research Service figures the high-3 to high-5 change would reduce the average benefit by $1,484 for feds retiring this year.

Any such change has a long way to go. It would have to go through the House (very possible) then clear the Senate (less likely). In any case, if it became law, workers would, presumably, have time to get out under the more generous high-3 formula. But people don't like worrying. Or fear that the change might be made retroactive.

We've heard from lots of feds on the subject. All but one says it would cost them a bundle and/or be a graceless breach-of-contract.

Here's what people are saying:

  • "I did the calculation for my situation (YMMV) and found that working 6 months extra (to age 60.5) would make up for the lower average using a high-5 calculation vs a high-3. Working 6 extra months would raise my annuity percentage from 27% to 27.5%, and I would be contributing to the TSP for that same extra time. I would also make 6 months extra salary (which I didn't include in the calculation). I assumed that there would be no pay increases other than the WIG that I will (supposedly!) get in 2013. So in my case, the High-5 vs the High-3 is not a big deal." Paul @NASA

  • "I have hoped for my entire 36 years in the federal service that my pension (CSRS) would be sufficient for me to live on, however modestly but more-or-less with the stable income in my retirement. I came to this country in the late sixties and since my nature is not very adventurous, especially in finances, I was very conservative in my investments. ...I have saved always the maximum in TSP. Specially, I am very concerned about the change of high 3 to high 5 because that could greatly affect my yearly income that I hoped to get. I hope that the announcement about that change (if any, I hope, none) will give us enough time to 'get out' in time. To wait whether they will give us buyouts or not is very uncertain and in this anti-bureaucratic atmosphere, the buyouts, I think, could be (if any) very small. I also think, that it was very unfair to single out the CSRS employees from the entire population's (as I understand) 2% social security tax cut. The CSRS people are still contributing to Medicare. We are also not getting a 5% contribution to our TSP, either. Thank you very much." K.A. at HHS

  • "I'm 56 with about 7 years federal service. I found my way to federal employment after being forced out after 24 years with the same company in private industry, and a year or two short of pension eligibility. My distaste for private industry's treatment of valuable, loyal employees was a major reason for my joining the federal ranks. I have finally caught up to my pre-government salary while all of my normal living expenses have increased. Even with extreme belt tightening on the home front, negative cash has become a reality. Our current salary freezes will put me further in debt, living pay check to pay check, and dipping into my home equity. As a FERS employee I don't envision retiring until 70 plus, or until the powers to be take away all of our benefits, and start reducing our salary. I just hope that Congress and our President realize that when you treat individuals like useless pawns, you destroy their initiative and productivity." Proud & Hardworking American