Federal Pensions

Either Keith learned little about the federal pension system while he served in Congress, did not understand what he learned, or is deliberately misleading your readers.

First, Civil Service retirement, as with all other private and public plans, is based not upon need, but upon service and salary history. It is not a welfare program; it is a plan to provide long-term employees with exactly what the name states: a retirement system. As presently constituted, ordinary retirement is impossible unless one is over 55 years of age--and then only if one has 30 years of service. Clearly, then, it is impossible for 40% of civilian employees to retire before 55. In fact, I think one will find that the average employee retires well past 60 years of age and, typically, with 25 to 35 years of service. As benefits are computed at less than 2% for each year of federal service, the usual benefit would be something like 55% of salary rather than the 80% Keith complains about.

Readers might also be interested to know that these benefits are not supplemented by the Social Security benefits most other Americans acquire, and they are hardly free. In fact each federal employee contributes 7% of his salary each year to a retirement fund, the proceeds from which are used to pay benefits.

Because the federal government is an imprudent custodian of these funds, the return to the employee turns out to be a rather lean one. In my own case (61 years old, 28 years service) a simple calculation shows that I’d have done better investing in a private account accumulating prevailing rates of return on government securities. Finally, you should know that the 7% represents income on which taxes have been paid and, after the employees’ contributions are returned as annuity, the proceeds are taxed as is any other income.

ADOLPH B. AMSTER

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