Pension Envy? You’re Not Alone
Pension envy refers to an individual wishing they could swap their retirement plan with other employees in the office for one reason or another. Would you say that you have a touch of pension envy? If so, you’re not alone.
Many, if not the majority, of federal employees who are under the old Civil Service Retirement System (CSRS) have envy towards their workmates that are in the Federal Employees Retirement System (FERS). Majority of fed retirees have coverage under CSRS that was replaced in the mid-80s by FERS.
Many FERS employees would move to the CSRS program in a heartbeat if it was possible. Currently, some federal and postal employees are under FERS (that replaced CSRS) in the mid-1980s. Employees in 1987 were offered the choice to remain in CSRS or move to FERS.
The design of FERS was meant to shift more of the retirement to employees away from the government employer. It is done this way in many private companies. Compared to CSRS, FERS workers are offered a reduced life annuity. However, individuals receive and pay for coverage of social security. This allows them to qualify for a government contribution to match up to 5 percent for their Thrift Savings Plan.
Together with saving the government the costs, FERS was designed for its portability. Most of the people signing up for government service jobs do not retire from their work, and that makes FERS portability better.
