FERS '2ND CHANCE' DEAD IN WATER

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP89-00066R000500150015-8
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 1
• Document Creation Date: December 27, 2016
• Document Release Date: February 26, 2014
• Sequence Number: 15
• Publication Date: May 31, 1988
• Content Type: OPEN SOURCE

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Declassified and Approved For Release 2014/02/26: CIA-RDP89-00066R000500150015-8
U t. 1-C IA L. 1-' C. 1-C D LI IN IN C. L. 1 D E
WEEKLY Up
NEWS
VOLUME VI, Number 21
Washington, D.C.
May 31, 1988
FERS '2nd Chance'
Dead In Water
An informal survey of agency personnel officials
finds that few federal employees seem to be taking
advantage of the "second chance" to transfer from
the government's old pension system, the Civil
Service Retirement System (CSRS), to the new
plan, the Federal Employees Retirement System
(FERS).
"I've had two employees call about it in the past
week and that is all," said a personnelist at the
Department of Health and Human Services. "Very
few employees seem to know or care about having a
second chance to get into the FERS system."
The situation at HHS seemed to typify that at
most agencies, although several officials elsewhere
said they had received numerous inquiries. There is
not yet a systematic effort by government personnel
officials to make employees fully aware of the
second opportunity to join FERS, say several
contacted by UP?DATE.
Due to a loophole in the original law establishing
the FERS system, the second chance came about
earlier this year when officials discovered that
employees could still switch from CSRS as late as
June 30.
Due to congressional dawdling on several key
issues involved with FERS and Social Security,
most employees held back on deciding whether to
switch until the last moment. That delay was then
compounded by the fact that many employees who
might have switched did not know that Congress
had finally acted with only a few days left before
the deadline.
But, according to UP?DATE's survey ? an
admittedly informal telephone exercise ? the
interest in FERS among the nearly 1.5 million
employees who could still switch to the new system
by June 30 is virtually nil.
Despite predictions by government pension
experts last year that up to 40% of eligible
employees would switch to FERS, fewer than 2%
actually did so during the official Open Season.
All employees hired after Jan. 1, 1984, are
automatically covered by FERS. Employees hired
before that date may switch; stay in CSRS but open
a Thrift Savings Plan under FERS; or simply
remain in the old system.
Generally speaking, employees with many years
of CSRS participation and with high grade levels
can expect to do better by staying put, according to
pension analysts.
Due to the portability of FERS benefits,
employees with fewer than 10 years of service,
however, are likely to do better under the new
pension plan, especially if they do not expect to
make a career in government, or anticipate moving
back and forth between government and the private
sector.
Most of the personnelists contacted last week said
they were still awaiting instructions from the Office
of Personel Management (OPM) on how to process
the new applications.
The lack of response to the latest FERS switch
opportunity probably dooms any chance of passage
of legislation now pending in Congress to officially
set up a second FERS Open Season.
"With an election coming in a few months, most
Members are thinking about getting themselves set
in their campaigns right now and, without a clear
mandate from the workforce to try another Open
Season, you just can't expect anything to happen on
it," said a key congressional aide.
Virginia Republican Rep. Stan Parris had
introduced the legislation earlier this year, but
nothing has been done on it in the House Post Office
and Civil Service Committee.
The low-ball response to the FERS second chance
may also be complicated by the difficulties OPM
has been having in processing retirement
applications. Officials in the personnel agency's
compensation division say too many retirement
applications are being delayed by the departing
employee's agency.
OPM director Constance Horner recently issued a
memorandum to agency heads asking them to take
steps to process retirement applications more
quickly. Many employees who leave the government
are having to wait as long as three months before
receiving their first annuity check, Horner said in
the memo.
Equal Raise
Issue Unresolved
No word yet as this issue goes to press on whether
Senate and House budget conferees have accepted a
proposal for a 4% 1989 pay raise for both civilian
and military government employees.
As we reported last week, the proposal has drawn
significant support among the conferees. But
adoption of the equal pay raise figure would require
that the Senate back off its insistence on a 4.3%
military raise.
Both the Senate and the House would have to
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Declassified and Approved For Release 2014/02/26: CIA-RDP89-00066R000500150015-8