CSRS retirement money source

0

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.

Share.

About Author

Reg Jones was head of retirement and insurance policy at the Office of Personnel Management. Email your retirement-related questions to fedexperts@federaltimes.com.

Leave A Reply