CSRS or FERS: Who's On Top?

But the investigative journalist in me is skeptical. Why? First, only a handful of cows, Holsteins, I think, took part in the survey. Second, is there really a place called Bosnia? And third, what do cows know? I mean, really!

Like cows, we humans have long pondered the grass-is-always-greener issue. Especially at the workplace. And it's alive and well in many federal offices. There the divide is between people under the old, CSRS retirement plan and FERS, which replaced it.

Most working feds, about 7 out of 10, are under the newer FERS plan which replaced CSRS in the mid-1980s. But most people who are actually retired, that is 1.5 million as of FY 2005, are under the old CSRS system. A much smaller number, 220,000 at that time retired under the FERS system.

CSRS employees get bigger annuties, immediately indexed to inflation and eligible for full cost of living adjustments at retirement. That's because they kick in more of their salary to the CSRS system.

CSRS employees can also turn their unused sick leave (not annual leave) into bigger lifetime annuities. Under the CSRS system once they are eligible to retire, workers can add their unused sick leave time to their service time. That boosts their lifetime annuity.

FERS employees pay the full Social Security tax, and a smaller portion of salary into the FERS retirement program. FERS workers also get matching contributions from the government, up to 5 percent of their annual salary, to their Thrift Savings Plan. The FERS retirement formula is less generous than CSRS, but prudent (maximum) TSP investments can make up the difference. And then some. FERS retirees don't get COLAs until age 62 (in most cases) and then they get diet-COLAs that can be as much as one percentage point less than CSRS retirees.

FERS is more like a very progressive private sector plan. CSRS is a one-of-a-kind, gone-with-the-wind system.

FERS was designed to be less costly to the government than CSRS but many now feel FERS actually costs more because of the matching TSP contributions, Social Security component, etc.

If they could cherry-pick benefits, many CSRS employees would like to get the same 5 percent TSP match.

If they could play catch up, many FERS employees would like to be able to credit unused sick leave toward retirement.

The TSP match up isn't going to happen. Too costly.

But giving FERS workers some kind of incentive to save sick leave is being studied. Not by Congress but by various federal organizations, unions and professional groups.

The final decision on what would be best for FERS employees, what is feasible given the current political-benefits climate when everybody is cutting benefits, and what will be requested isn't ready for prime time. Yet. But sooner rather than later, maybe beginning with the new Congress, the issue will surface.

Stay tuned...

To reach me: mcausey@federalnewsradio.com