Academic journal article Social Security Bulletin

Benefits and Beneficiaries under Public Employee Retirement

Academic journal article Social Security Bulletin

Benefits and Beneficiaries under Public Employee Retirement

Article excerpt

The Federal Government, the 50 States, and many localities maintain programs that provide retirement, disability, and survivor benefits to their employees. In fiscal year 1990, the amount paid out in such benefits at all levels of government was $89.2 billion, and the number of beneficiaries was 7.9 million (table 1). (Table 1 omitted) Federal retirement systems accounted for 60 percent of the benefits paid in 1990 and for 49 percent of the beneficiaries (table 2). (Table 2 omitted)

The Civil Service Retirement System (CSRS) was the major program covering Federal civilian workers from 1920 through 1986. In 1986, Congress enacted the Federal Employees Retirement System (FERS), which covers all Federal civilian workers hired on or after January 1, 1984, and any workers previously covered by CSRS who elected to change. The majority of those hired before the cut-off date continue to be covered by CSRS.

The CSRS is separate from the Social Security system. Covered workers contribute a fixed percentage of their salary and receive benefits based on their earnings and length of service. In addition, since 1983, CSRS employees have been covered by (and contribute to) the Medicare program.

The FERS, on the other hand, was designed to coordinate with Social Security. Under FERS, workers contribute to the Social Security and Medicare programs on the same basis as workers in private employment, and they receive the same benefits. In addition, FERS employees contribute to a Federal pension, which is paid in addition to Social Security benefits. The combined contribution rates of CSRS workers (for Federal pension and Medicare) and of FERS workers (for Social Security, Federal pension, and Medicare) are the same--8. …

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