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Ask President Burrus

Question:

There has been an increase in rumors concerning CSRS (Civil Service Retirement System). According to these, CSRS seems to be in a precarious state. Is it possible to do away with CSRS? Have there been discussions between management and the APWU in regard to a CSRS enticement? I’m getting sick and tired of hearing things that supposedly came from a very reliable source, so I’m bypassing this and going directly to you.

John, Houston (TX) Area Local

President Burrus:

Thank you for writing.

There is no truth to the rumor that the Civil Service Retirement System is in a “precarious” state. The federal government funds the system, with the Postal Service making pro-rated annual payments to cover the employer’s contribution for postal employees.

FERS (Federal Employees Retirement System) was enacted in 1983, and since that time, no new employees have been added to CSRS, while hundreds of thousands have retired from government employment and from the Postal Service.

However, employees’ contributions to the retirement fund (7 percent of their salary) are only a small portion of the fund. Therefore, the fund is not jeopardized by the fact that new employees are not coming into the system.

Presently, 24 percent of federal and postal employees continue in the CSRS system. It is expected that by 2010 the number of CSRS-covered workers will decline dramatically and almost all active government and postal employees will be covered by FERS. There will continue to be many thousands who will be receiving CSRS retirement over the next 40 to 50 years, but the liability will have been capped.

Early retirement for CSRS employees will not reduce the liability of the government, which will continue for the balance of the lives of the covered employees. Therefore, at this stage, early retirement offers would not have a positive affect on the funding of the system.

Rumors continue on a number of issues and I do not doubt that you will hear this one and others over the coming years. In direct response to your question, it is not expected that early retirement opportunities will be presented because of the funding of the system.

Thank you for communicating with my office.

June 19, 2006

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