CSRS enrollment is declining but not disappearing

Since the Civil Service Retirement System began being phased out in the mid-1980s, the number of active-duty government workers enrolled in it has dropped to about 742,000, fueling speculation about its viability.

Its dwindling enrollment means one of two things:

1) That as it gets smaller, with fewer people to fight for it and fewer politicians covered by it, it will be easy — and wise — to kill off the program by forcing all current workers to convert from CSRS to the cheaper Federal Employees Retirement System (FERS), which now covers about 1.8 million.

2) Because it is getting smaller every day, its costs will continue to drop and it should be allowed to disappear on its own.

Take your pick.

Conspiracy theorists, both active and retired, have predicted the demise of the old CSRS retirement plan for decades. Every couple of years they come up with a bogus report about some secret legislation that will force a move to kill off the CSRS program.

They see it as civil service version of the Spanish Inquisition: Convert to the newer, less-costly system or else.

CSRS offers a much more generous annuity for life, and it is indexed to inflation. Being married to someone under CSRS entitles the surviving spouse to a lifetime benefit that also is fully indexed to inflation.

In contrast, the newer replacement program FERS offers a less generous (but still better than most private-sector plans) benefit. It, too, has survivor benefits, with health insurance for life for any surviving spouse.

From time to time, some learned member of Congress or some think tank will sound off or publish a paper about getting rid of the old retirement plan. But it never comes to anything because a substantial number of members of the House and Senate (and their influential staff members) are under it, and they know a good deal when they see it.

Also, virtually all retired members of Congress or their surviving spouses are under CSRS and living very good lives.

Bottom line: If you like a good scare, you can listen to e-mail tales about a forced conversion from CSRS to FERS, even though the last one, which predicted that it would happen by late 2003, was dead wrong.

But if you are looking for the best deal in retirement — whether you are currently a civil service working stiff or already retired — focus on bills that would eliminate the Social Security check-eating windfall and offset rules, or the plan that would give retired feds the same health-premium tax break they enjoyed while working, but lose the day they retire.

Premium conversion is the top legislative priority of the National Association of Active and Retired Federal Employees (NARFE). Premium conversion allows active-duty feds and postal employees who pay their health-insurance premiums with pre-tax dollars. That cuts their tax bills by several hundred dollars a year. But they lose that option when they retire .

But there is a strong bipartisan move to extend premium conversion of retirees. Its chief sponsors are Rep. Thomas M. Davis III and Sen. John W. Warner, Republicans from Virginia, which is chock-full of retired feds.

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