Originally Posted by: G0271 
I have a job in Corporate currently and am in the process of crossing over to government. My EOD was the beginning of February but then of course the hiring freeze hit. I am looking at other opportunities both in govt and in corporate.
With that said, one of the reasons I wanted to crossover to government is because of the benefits (retirement) that is offered. but I just saw this article and it appears that they are trying to get rid of the Federal Retirement system? Did I read the article right?
https://federalsoup.com/...ibased-compensation.aspxCan anyone shed any clarity on this?
Thoughts?
There has been chatter for years about changing FERS. The most recent changes to FERS have only affected new hires. These changes increased the FERS contribution rates from .8 percent (1.3 for LEOS) to 4.4 percent (4.9 for LEOS) for employees hired on or after 1/1/2014 (those hired between 1/12013 to 12/31/2013 contribute 3.1 percent (3.6 for LEOS).
There are no guarantees but once you get hired there is a less likely chance that you would be directly affected by most of the proposed changes but keep in mind that one of the changes mentioned above (FERS-FRAE) was signed into law in late December 2013 and went into effect 1/1/2014.
The most common proposals are..
High 5 (instead of high 3)
Eliminate FERS supplemental
Increase FERS contributions by employees
Eliminate COLA
And possible changes to FEHB contributions during retirement (from 72 percent to 65 percent)
The most drastic would be the elimination of FERS and move to strictly TSP.
If you are truly concerned about retirement with the federal government (and pay) your best bet is to get a 6C/12D LEO position. With most of the covered positions you will earn significantly more during your career because of GS grade (many positions top out at the GS 12/13 level) and premium pay (LEAP/AUO) that adds an addition 25-32 percent of pay (that also is figured into high 3 for retirement). Plus being able to retire at a much younger age and have a pension that would be significantly higher in percentage (between approx 50-70 percent) than non LEO positions. The actual difference with the higher LEO pay (high 3) and the higher percentage can result many times in more than double the pension for an LEO at the same grade as a non LEO.
GS 12 step 6 (RUS)
Base - 89,510
Non LEO
Base - 89,510 x 20 years (20 percent of high 3) = Pension of 17,902 (not eligible for FERS Supplemental)
LEO
Base - 89,510 plus premium (25 percent) 22,377.5 = 111,887.5 x 20 years (34 percent) = 38,041.75 plus FERS supplemental (approx 15,000) = 53,041
So that’s 17,902 vs 53,041.
The gap will close slightly after 30 years.
Edited by user Wednesday, March 4, 2020 2:19:02 PM(UTC)
| Reason: Not specified