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| Name: |
MAJ USA RET
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| Subject: |
No Suffering with the Plebs
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Date:
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7/5/2010 11:11:08 AM
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A quote from Federal News Radio on Thrift Savings Plan (TSP) investments in the current market
http://www.federalnewsradio.com/?nid=15&sid=1994347
“In addition to truly great pensions, federal employees have great job security and they look better than the bulk of the American people. Great health care. They're just in a very solid position and they need to look at this as perhaps an opportunity, or something that certainly doesn't effect (sic) their pensions, which is huge."
During this time of national economic crisis and unemployment, it is great to be a government employee.
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| Name: |
Talullahhound
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| Subject: |
No Suffering with the Plebs
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Date:
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7/5/2010 4:53:46 PM
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I'm not sure that I would agree that Federal Employees have a great pension system anymore. The one I was lucky enough to retire under, the old system, is outanding. For me, TSP was optional.
The new system relies on TSP, SS, and a small piece of a government pension. The government matches their TSP contributions, but I don't believe they match it 100%. So for those who contribute the maximum to the TSP every year, and invest it smartly, can do pretty well, assuming the fund managers are smart. Where it falls down is that there is no mandatory requirement to invest X% per year and if someone doesn't make a significant contribution, they may be facing a rather bleak retirement. They have started a couple of "lifetime funds" that basically shifts your money around for you depending on your age and goals, but that only helps if you contribute.
I'm not sure I would say that the gains of the TSP have been all that great. The stock fund is indexed to the S&P, not the DOW. It may be true that it has had gains every year, but I wouldn't call them significant.
Just my thoughts...
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| Name: |
MAJ USA RET
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| Subject: |
Too Bad
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Date:
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7/5/2010 5:53:38 PM
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...didn't run social security like TSP.
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| Name: |
lakngulf
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| Subject: |
Too Bad
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Date:
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7/6/2010 9:10:55 AM
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I may be totally wrong here, but I don't think the SocSec setup is like that. Would be great to think that what each individual has put in has been earning money for them. But the SocSec that will be paid to baby boomers (if any) will come from the wages of their children. And the children cannot afford it.
Retirements are in trouble, whether defined benefit or defined contribution: The former because these are from businesses struggling, and governments going broke; The latter because people like me did not save enough and got wiped out with a couple of crashes.
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You are right, they don't make an "earmarked" contribution to SS, but they contribute some portion of their salary to SS, in order to draw a benefit from the general fund in the future.
LNG, a lot of people are where you are. While it didn't effect my retirement, I took a good sized hit to my TSP. Thankfully, I don't have to draw on it now, so I'm hoping it will make a strong comeback in the future. But even more disappointing was that I took a $200K "loss" on the sale of my house in VA from what I would have expected to get if I had sold the previous year. Nothing I can do about that.
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| Name: |
MartiniMan
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| Subject: |
No Suffering with the Plebs
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Date:
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7/6/2010 4:50:15 PM
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Hound, its been awhile since we were active participants in TSP but I am wondering if you recall what year they did away with the Federal pension program. My wife worked for the Federal gov't from 1989 to 1998 and I don't recall there ever being a mention of a pension while she was there. Just curious.....
I do remember putting more into my 401k while she was at EPA but her account grew much faster because of the match. I seem to remember the match being 100% up to a max of some percent of her salary (maybe 6%) but I can't recall for sure so it may have been 50% up to a certain percentage.
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| Name: |
Talullahhound
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| Subject: |
No Suffering with the Plebs
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Date:
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7/6/2010 9:26:46 PM
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The new retirement system came into being in the 1980s. TSP became open to all civilians around 1988. For a long time there was a cap on the percentage of your salary you could contribute if you were under the "old" retirement, but in the last few years, the cap was totally removed.
I'd have to go do some research on the contribution matching. It never applied to me so I really didn't pay much attention to the details. If there is no cap on the matching funds, anyone would be crazy not to contribute every dollar they could.
My TSP was really doing extremely well for a long time. I'd say I've regained about 3/4 of what I lost when the market took a nose dive.
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| Name: |
Yankee06
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| Subject: |
No Suffering with the Plebs
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Date:
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7/7/2010 4:13:25 PM
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-reference the question about when did gov retirement pay system change; the date was 1 Jan 1987 and it automatically covered people who had come to work for the government starting in 1984(very appropriate?).
-Before 1987, we had teh Civil Service Retirement System (CSRS). Under CSRS Fed workers did not pay into social security and did not receive social security. They received a pension based on years of service and pay grade.
-In 1987, the new system was put into play: teh Federal Employess Retirement System (FERS); New System has three parts: defined benefit, social secuity, and a thrift savings plan (TSP - a 401K type program). I know both teh gov and teh employee both contribute to Social Security and Thrift Savings, and I think they both also contribute to defined benefit pension.
-For a period after the initiation of FERS, employees under the old CSRS plan had teh opportunity to swith into the new plan. Some did during teh big stock boom of the 90s. But it is often said that the really smart ones didn't because they knew the governmeent would never put a new system on the table that was better than the old system. Time proved these old employees to be right.
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| Name: |
Talullahhound
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| Subject: |
No Suffering with the Plebs
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Date:
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7/7/2010 5:08:47 PM
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I believe you are right about the timeline.
I know it was around 87-88 that the TSP was opened to those of us under CSRS.
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