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Eliminating the FERS flu
Thursday - 4/2/2009, 4:17pm EDT
A huge piece of legislation has just passed the House of Representatives and will dramatically change the current Federal Employee Retirement System.
Q: What is this legislation?
A: It's the "The Federal Retirement Reform Act of 2009" sponsored by Virginia Congressman Jim Moran.
It includes several things that'll change how the current retirement system works.
There are two different retirement systems: CSRS and FERS. This bill will affect FERS employees.
Q: In what way?
A: First, the FERS Sick Leave Bill will allow feds to cash out their sick time.
Currently, as they reach retirement, they have to "use it or lose it."
Under this legislation, they'll be allowed to cash it out.
Also, if you die, it'll cash our your unused sick leave for your beneficiary.
OPM has calculated millions of dollars in lost productivity (about $68 million a year) because feds are trying to use up their sick leave.
Just cashing it out would actually cost the federal government less money.
Q: There are other provisions, too?
A: Another big one is the FERS Redeposit Act.
What this does is allows a fed to return to government service.
It was developed in response to the coming "brain drain" so that agencies could maintain some institutional knowledge from long-time feds.
This allows employees to deposit any retirement payments they've received -- with interest -- into the Civil Service Retirement and Disability Fund.
In other words, they don't have to lose it.