By Reg Jones
January 30th, 2013 | Uncategorized
Q. I’ve been a federal retiree under the CSRS for more than 25 years. I am curious about the fact that I have received in monthly benefits more than 10 times the amount I and my employer, the federal government, contributed during my 30-plus years of employment.
I am aware that CSRS was phased out more than 25 years ago with consequent reduction of new contributions from the existing employees.
(The Social Security System has a continuous source of new funds to pay into its trust fund, an advantage CSRS lacks.) What is the source of the extra funding that has paid me benefits (as well as other CSRS retirees) apparently tenfold more than the original contributions?
A. CSRS and FERS benefits are paid from the Civil Service Retirement and Disability Trust Fund, which is financed through employee, agency and government contributions. Any amounts not needed for the immediate payment of benefits are retained in the Treasury. As you suspected, contributions made by employees to FERS and CSRS provide only part of the revenue needed to meet the cost of paying benefits. The rest comes from general revenue acquired through the federal government’s taxing powers.
Patti M Says:
January 30th, 2013 at 2:41 pm
Regarding the statement, “with consequent reduction of new contributions from the existing employees,” that isn’t true. Existing CSRS employees still contribute 7 percent, only CSRS-Offset employees contribute a reduced amount, and that’s because they also pay into Social Security.
January 30th, 2013 at 9:46 pm
Don’t forget the dead they stop geting payments too. Thank GOD for CSRS, I’M 55 WITH 36YRS. Retired.