CSRS vs. FERS: 2008 Edition

By Tammy Flanagan

September 19, 2008

If you work in the federal government, you've no doubt heard people either brag or lament (depending on when they were hired, usually) that the Civil Service Retirement System is much better than its successor, the Federal Employees Retirement System. I hear these kinds of comments all the time.

There is no denying that some parts of CSRS truly are superior to FERS, such as:

What FERS Offers

So if CSRS has all that going for it, what does FERS offer? Here are a few advantages:

Asking for It

I know that in even raising the CSRS vs. FERS question, I'm asking for it. I went through this a couple of years ago with my most controversial column to date. Many of you already questioned my mental state at that point, so you can save your breath this time around.

Here are my basic beliefs, and I'm sticking to them:

I will agree that, in general, CSRS provides more security for much less effort. In the long run, FERS will be less expensive to the government, since it places more responsibility on the employee to save.

That presents a problem, because not everyone manages their retirement savings to optimum advantage. Many people neglect to save for retirement in their younger years, and it's very hard, if not impossible, to make up for that lost time in later years.

I hope those of you who are new to federal service will recognize early in your career that you will not be able to live comfortably on just Social Security. Even adding in the FERS basic benefit won't be enough if you want to retire at a young age (55-62). You need to save and invest. Take the time to understand retirement planning early in your career. It will pay off in the future.

Tammy Flanagan is the senior benefits director for the National Institute of Transition Planning Inc., which conducts federal retirement planning workshops and seminars. She has spent 25 years helping federal employees take charge of their retirement by understanding their benefits.

By Tammy Flanagan

September 19, 2008