A federal retiree I met recently said, only half-joking, that if he were single he would have good prospects for marriage even at his age. “I have a pension, I have health insurance and I can drive at night!” he said.
He related that he had joined the government soon out of college and had worked straight through to retirement more than 30 years later. He saw federal retirement coverage as a good deal while he was working and he’s even more certain of it now that he’s retired.
That deal also was good for the government. The nation got a full career of work out of him, probably for a salary below what he could have commanded in the private sector. And the value of that work may be incalculable; he had worked for DoD in intelligence. He was vague about the specifics, which tells you all you need to know.
Does the government appreciate that it got a good deal too? Certainly some in Congress don’t. Year after year there have been proposals—set aside for now, but not forever—to degrade the value of federal retirement benefits and health insurance benefits on the argument that they’re overly generous when compared with what private sector employees get.
Those inclined to make that argument never seem phased by the counter-argument that those were the benefits promised on hiring and continuously afterward, and that if private sector benefits are lower, the solution is to bring them up, not tear federal benefits down.
One way to prevent such changes from happening is for federal employees and retirees to understand how important and valuable those benefits are to them. But do they? A recent analysis by the Merit Systems Protection Board suggests that—unlike that retiree—many don’t.
It said that on initial hiring, “retirement education may simply consist of a pamphlet” outlining the bare bones of those programs and Social Security. It noted that in the most recent survey of federal employees’ views of benefits, 20 percent said that the availability of a retirement annuity did not even have a moderate impact on their decision to take the job, and 30 percent said the same of the TSP.
Retirement benefits “are one area of employment where the government may be well positioned” to compete with the private sector in both recruiting and keeping employees, it said, especially by highlighting “the rewards that a federal job can offer beyond the satisfaction of a career in public service.”
Strong points include that over the course of a career, the annuity benefit “adds up to a substantial and stable revenue stream for retirement. Similarly, the TSP offers matching funds and boasts one of the lowest operating costs of any investment platform,” it said. “Both benefits are portable to other agencies. Also, employees become vested in FERS after 5 years, meaning they may be eligible for an annuity when they retire, even if they move in and out of service throughout their career.”
That doesn’t even include the value of inflation protection, continued benefits to a surviving spouse, and health insurance coverage for life—and that of a surviving spouse—with the government paying seven-tenths of the cost.
The benefits survey did show that once people get farther into their careers, they do ascribe more value to those benefits, the MSPB added. But it said the government still could do more to help them see that value.
“Reminding employees where they can find personalized and specific information will cost agencies little and might put the longer-term benefits of a public service career in the forefront of their minds. For instance, the Annual Personal Benefits Statement can spell out for each employee where they stand and where they are headed,” it said.
“Simply ensuring employees know how to find it can illustrate the value of the benefits and show that a non-federal job that offers a higher salary or bonus is not necessarily a better deal.”
If what the government provides isn’t enough to fully understand the value of its deal for you, do it yourself. It can be a foundation for your career and post-work life.
Seeing well enough to drive at night in retirement is nice, too.