Every once in a while I get the urge to dig through old files to see what the world used to be like. Having worked in the government for many years, I was aware of a few changes in the amount employees contribute to the retirement fund as a down payment on the annuity they’ll receive when they retire. But I’ll have to confess that there were more of these than I had thought. Let me share them with you.
In the beginning, federal employees only had to contribute 2.5 percent to the Civil Service Retirement and Disability Fund. In 1942 that was increased to 3.5 percent. In 1948 it went up to 5 percent, then to 6 percent in 1956, and 7 percent in 1969. When the Federal Employees Retirement System became effective on January 1, 1987, the FERS employee contribution rate was set at 1.3 percent and 6.2 percent to Social Security. The FERS rate dropped to 0.94 in 1988, and to 0.80 in 1990, with the additional amount to Social Security remaining unchanged.
Beginning in 1974, special category CSRS employees (law enforcement officers, firefighters and air traffic controllers) have been required to pay a half percent more than other CSRS employees. Special category FERS employees have paid an additional half-percent since the program went on line.
Just when it looked like contribution amounts had settled down for good, the law was changed again. As a result, the contribution rate for CSRS employees increased from 7 to 7.25 percent for 1999 (7.75 percent for special category employees) and 7.4 percent for 2000 (7.9 percent for special category employees). For FERS employees, it increased to 1.05 (1.55) and 1.2 (1.7). In 2001 both rates returned to 1969 (CSRS) and 1990 (FERS) levels.
So what does this tell us? For one thing it says that what looks stable in the short run isn’t in the long run. Whether there will be future changes in the amount employees need to contribute to the retirement fund remains to be seen. So far neither the Congress nor the administration has shown any interest in doing that. However, if past is prologue…