Publisher's Perspective

July 4th celebration at the US Capitol Building in 1987, the year the FERS retirement system became effective.

The share of CSRS employees in the federal workforce is down to 4 percent—in numeric terms, only about 100,000, even including the Postal Service—with almost all of them at least age 55.

Not a surprise, probably, to federal employees as they look around their workplaces. The bigger issue is, what does that mean for the future.

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First, a closer look at the numbers. The figures are current of the most recent data available to the Congressional Research Service, now more than two years old. The numbers would be lower today.

That data show that even then, only about 4,200 CSRS employees were under age 55—none under age 50—only about a seventh as many as the nearly 32,000 age 65 and older. Nearly 32,000 were between 55 and 59, and more than 40,000 between age 60 and 64. In percentage terms, 67 percent in CSRS were age 60 and up (compared with just 14 percent under FERS).

The CSRS has been closed to new entrants since the end of 1983, so by definition the nearly all of those who have been continuously employed since then are now retirement-eligible, certainly more than the 90 percent eligible in the latest accounting by OPM, which itself is now more than two years old. Among new retirees, 21 percent go out under CSRS, five times the rate of their representation in the workforce.

So, is it time to tell the last employees under CSRS to turn off the lights on their way out?

Not necessarily. Retirement eligibility does not necessarily equate to retiring. CSRS employees already are proving that, with the nine-tenths of them who are still working beyond their eligibility. CSRS people tend to retire older and with longer service: the average age and years of service were 62.9 and 37.5 for CSRS and 61.2 and 24 for FERS.

Every federal workplace has its story of employee X or Y who worked well into his or her 70s or even beyond. Maybe that was because they liked the work or just didn’t like the idea of not working, or because they needed the income. It’s looking like the current CSRS hangers-on will have a high share of those.

With a third of CSRS people still below age 60—and the youngest still only in their mid 50s—there still will be some in the federal workforce 10 or more years from now. They’ll be drawing benefits for decades more. It’s been projected that the books won’t totally close on CSRS until late in this century, given that federal retirement programs provide lifetime benefits for surviving children who were disabled before age 18.

While FERS supplanted CSRS as the majority in the workplace 25 years ago, it will be a long time before that is true in the ranks of the retired. Of the 2.132 million federal retirees (again including USPS), 61.8 percent are drawing benefits under CSRS. That was also true of 86.2 percent of the 514,000 federal survivor beneficiaries.

For years, federal employees have been looking for some tipping point that would trigger a retirement policy change to get the remaining CSRS people off agency books, if only to simplify the accounting—and, not incidentally, to clear the way for others (that is, FERS people) to move up into the generally more senior positions that CSRS employees hold.

Some have suggested, for example, that once the CSRS population fell below a certain share in the workplace, the government would offer some kind of grand buyout to encourage the rest of them to retire. Others suggested, more ominously, that the government at that point would figure out a way to force them into retirement.

But if that alleged tipping point hasn’t been reached even with the percentage of CSRS now down to 4, it’s hard to see when it will arrive.

Another theory held that once a certain point was reached, CSRS benefits would be vulnerable to being degraded—for example by applying to it the less generous benefits accumulation formula and post-retirement COLA formula used under FERS—potentially with the support of FERS employees, who would see CSRS people as a favored minority.

Again, that hasn’t happened: the most recent proposals on COLAs from the Trump administration, for example, suggested only shaving a half-point off the CSRS annual COLA while eliminating the FERS COLA entirely. And while they would have required FERS people to pay more into retirement while still employed, CSRS people would have been left untouched.

Those haven’t happened either, in part because federal employees have presented a united front with both CSRS and FERS employees sticking up for each other rather than undercutting the other for their own benefit.

In any case, there is no need either buy off CSRS or kill it off. Like an old soldier, it is just fading away.

More on CSRS at ask.FEDweek.com:

Reemployed Annuitant Under FERS and CSRS

CSRS and CSRS Offset Survivor Benefits

Voluntary Contributions CSRS Retirement