January 26, 2012 at 5:07 pm #151022
While most employers have done away with the defined benefit plan as their employee retirement program (having chosen instead to offer their employees the ever-so-popular 401K plan), the Federal government continues to provide a contributory retirement benefit to its full-time, permanent employees. Notwithstanding this fact, the Feds also rely on a three-prong approach to fund FERS eligible employee retirements: (1) this very basic defined benefit plan, plus (2) reliance on Social Security benefits, and (3) a Thrift Savings Plan (similar to the 401K). For those who leave the government before being retirement eligible, their Social Security and Thrift Savings Plan contributions go with them but their basic pension benefits (funded in part by their own contributions) do not go with them.
Federal employees typically accept lesser salaries than their counterparts in other public and private organizations. It’s been my experience to learn that this is especially true of Engineers, Scientists, Physicians, Attorneys, IT Specialists and the like and, people who stay in government positions do so, not for personal gain, but to serve the American people. Otherwise, they do find higher paying jobs outside the Federal government. This may sound “hokie” but the truth of the matter IS that there’s a personal return many of us receive from choosing to provide our knoweldge, skills and abilities in service to others!
Now comes along Rep. Dennis Ross (R-FL), who has introduced legislation that would increase the pension contribution rate for all covered Feds. If approved, contributions would increase for current employees by 0.5 percentage points each year between 2013 and 2015. This would apply to both CSRSand covered employees. The result? FERS contributions would incease to 2.3% and CSRS contributions would go up to 8.5%.
This bill also proposes to create a new category of federal employees referred to as “secure annuity employees.” This category would apply to future govies hired in or after 2013 who have less than five years of previousfederal service. So, in addition to having this increased contribution rate, the “secure annuity” group would receive a smaller pension at retirement because of this bill which would also establish a new “high five” salary calculation instead of the current “high three” averaging.
So the questions is, “Will our progeny WANT to work for the Federal government? I say “yes” but not because of its pay or benefits; I think public service is a benefit to those of us who make it our career! I just hope we’ve raised at least a few in the next generation of potential govies who feel the same way!
January 26, 2012 at 7:40 pm #151034
Probably doesn’t affect me a great deal, HOWEVER some of my contempories are currently working in private enterprise and they are amazed that I just recently retired, from the federal government, with a small pension. They get less surprised when we discuss the contribution made to the 401K. Where the government provided 1% and matched upto 5 percent Some of the companies provided upto 10% and matched upto 25% in a 401K (AND Social Security iswas also a player) There are other differences as well: to be fully vested in some takes 10+years plus; SOME 401K’s consist entirely of the company’s stock; Management fees are MUCH higher and are sometimes paid by the employee.
IMO the majority of new employees of any organization probably don’t consider the retirement program or most any other benefits. If a potential employee is looking at a government job would offer that if the pay is an issue there is a likelhood that I probably don’t/didn’t want that member on my team.
January 27, 2012 at 2:05 pm #151032
January 29, 2012 at 3:07 pm #151030
I agree. Most young people just starting their careers are not too concerned about retirement. Health benefits seem to be a bigger concern. Benefits alone have never been a big driver of recruits. It’s is more about the mission, prestige, and an opportunity to contribute. In Dan Pink’s lingo – purpose, mastery, and autonomy. Some agencies have a strong sense of purpose/mission (e.g., FBI, USMC, Navy Seals, etc.), some provide opportunities to master one’s craft (e.g. NIH, NASA, NOAA, etc.), but very few offer autonomy. The government tends to over-sell jobs in the recruiting process, but often disappoints new hires by not allowing them to demonstrate their creativity, innovation, and motivation to serve others.
January 29, 2012 at 4:58 pm #151028
Around here, we just got some wonderful news…..”Panetta announces another BRAC”…..in other words….Release the Kracken! Now, ask yourself, “Would a young person out of college want to work for DoD?” Not after this announcement. Man your battlestations all you military installations….it’s about to get UGLY. Been through one, not pretty. Young people are smart enough to know, when the military (pick you branch) starts cutting, the civilians “know” less military to “support”, less civilians needed.
“The Army is on a path to drop to 490,000 soldiers and the Marine Corps to 182,000 Marines over five years.”
We are still in a hiring freeze, however, we are short many engineers, environmental, facility and aerospace. We are short contracting personnel, payroll and comptroller personnel. After this announcement, looks like it’s going to stay that way for sometime.
I know GovLoop is the “shiny happy people” place, but out there in the real world, not only DoD but other gov agencies as well are going to experience “realignment”, which is a nice word for “BRAC” followed by “pink slip”. And we ask “Where are all the young people and why aren’t they working for Uncle Sam?” Because they pay close attention to Washington’s Budget Cut news and decide, the private sector is more secure.
Oh, I and received an email from my tax preparer, it turns out the IRS is short-staffed and refunds will take longer (doesn’t say how much) than the dates projected. No wonder GE didn’t pay any taxes last year, civil service is being gutted.
January 29, 2012 at 5:46 pm #151026
I’m the black sheep of the family because of my government service. I have no idea of what things will be like by the time I have kids old enough to start a career
I think Julie’s right though – with all of the budget cuts taking place I’m not sure anyone would want to join public service right now.
January 30, 2012 at 11:55 am #151024
I know what you mean being the black sheep of the family because I work for the government. None of my nine siblings nor any relatives work for the government (other than teachers and military members, who are exempt from criticism). I feel like I need to apologize and explain why I chose Federal service as a career, rather than getting a “real job.” I’m hoping that someday that perception with change.
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