Posted on 02/16/2012 7:32:16 AM PST by PieterCasparzen
[Excerp is Note 3 on page 59, commenting on the line Investments (which total over $916 billion dollars), under Assets on the balance sheet shown on page 45 of the report]...
All of OPM investments are in securities issued by other Federal entities and are therefore classified as intragovernmental. See Note 1J for further explanation, including the amortization method. All of OPMs investments are in U.S. Treasury and Federal Financing Bank securities held by earmarked fundsthe Retirement, Health Insurance, and Life Insurance Programs. The Federal Government does not set aside assets to pay future benefits or other expenditures associated with earmarked funds. The cash receipts collected from the public for earmarked funds are deposited in the U.S. Treasury, which uses the cash for general Government purposes. Treasury securities are issued to OPM as evidence of its receipts. Treasury securities are an asset to OPM and a liability to the U.S. Treasury. Because OPM and the U.S. Treasury are both parts of the Federal Government, these assets and liabilities offset each other from the standpoint of the Federal Government as a whole. They are eliminated in consolidation for the U.S. Government-wide financial statements. Treasury securities provide OPM with authority to draw upon the U.S. Treasury to make future benefit payments or other expenditures. When OPM requires redemption of these Treasury securities to make expenditures, the Federal Government finances those expenditures out of accumulated cash balances by raising taxes or other receipts, borrowing from the public or repaying less debt, or curtailing other expenditures. This is the same way the Federal Government finances all other expenditures.
[...]
(Excerpt) Read more at opm.gov ...
The pension does NOT invest in the private sector, thereby producing investement returns for Federal employee pensioners.
Instead, it invests in future taxes.
The Treasury (the taxpayer) is paying interest - those are the "investment returns" for federal employee pensions.
But, fur shur the federal employee retirement fund would be flush with ALL THE CASH.
So?
It is? You will need to explain that in some detail ~
The citizen should also realize social security, medicare, and any other “federal program” is financed the same way. I think Ron Paul suggested just doing away with all “trust” funds and just paying the costs out of general revenue some time ago. Unfortunately, with the dumbed down populace we have, they don’t see it.
I believe when political type says the national debt is not so worrisome because it is money we owe outselves, this is what they base that comment upon. Of course, they never consider these funds would be foreced to be paid under contractual law inasmuch as the benefits were partly, in most cases very small partly, paid for with the recipients funds.
I assume this is not the same thing as my Thrift Savings Plan...
Colonel, USAFR
It is? You will need to explain that in some detail ~
There are two major retirement systems in the federal government. The old one is CSRS and the new one is FERS. The FERS system collects something around 3% form employees and pays retires with it. Sound like Social Security System?
Colonel, USAFR
I assume you are covered by military retirement. Federal employees are covered by the old CSRS retirement plan and the newer Fers plan. I was under the FERS and paid into Fers, Social Security and I could put money into the TSP also.
It's funny money for the other agencies but for USPS it comes out of postage (a user fee), not taxes.
They are about $78 billion OVERPAID.
CSRS is the same case ~ except it's defunct.
If you set up SS on the same basis workers would pay 1% of current pay and their employer would pay 11.5% (app) without passing the money through the employee's hands for taxation.
Then there's the Thrift Savings Plan. That's a bit more complex but it's pret near a 401(k) plan only not as good.
USPS FERS is different than OPM FERS for regular federal employees.
CSRS is still active as there are some employees covered by the system. Many people are collecting under CSRS which is probably the best retirement plan. Your union sure got a different retirement plan than the rest of federal employees.
USPS FERS is no different than that offered to all federal employees ~ "OFFERED" choke choke choke ~ IT'S MANDATED!
FERS has a hidden payment ~ your agency says your salary is X. They have to pay OPM a percentage based on X that is credited to to the retirement system. You also make a payment.
Since FERS replaced CSRS the result is actually quite complex. The amount paid by agencies and employees for the retirement system stayed pretty much the same. However, the FERS payout to the employees is LESS than the CSRS system.
At the same time the Thrift Savings Plan for FERS works like an employer sponsored 401(K) plan so the agency has to kick in a little bit more to match however much you save.
I wrote an enormous computer program to determine how much more the new system (FERS) cost an employee than the older (CSRS) system.
CSRS was and is more beneficial, except that every day there are fewer folks covered by CSRS. That means every day there are fewer and fewer people interested in the plightof CSRS retirees. There's already been talk of whacking the COLA on CSRS at the same rate they whack the COLA on FERS. Eventually they'll start talking about a "grand buyout", all voluntary, where they'll give you a CSRS lump sum imputed to reflect actuarily anticipated payments through to expected life span for the average federal employee (not at all the superannuated CSRS recipients BTW).
It's coming.
That ought to give the US Gub'mnt back about 1/4 trillion of that imputed potential payout you see kicked around.
You sure won't get it!
I switched from CSRS to FERS simply on the basis that I could end up with essentially the same money, and if I lived long enough, there'd be hundreds of thousands, even millions of people covered by the FERS retirement plan when there were only dozens covered by the residual CSRS retirement plan.
The Postal Unions made the argument that a dollar today is always better than a dollar in the future. They claimed they could protect people left in the residual CSRS plan because, after all, they were a powerful union.
Being privy to some really highly secret data I knew that was BS. Postal productivity was going to improve to the point there'd be barely more than 250,000 employees in under 25 years ~ that's 2012/2013 ~ and when that happened there was no longer a POWERFUL UNION ~
Only 5,000 postal employees transferred to FERS from the CSRS plan ~ having listened to the union.
USPS mail volumes dropped and they are being forced by circumstances to retrench. Smart people are retiring now. Idiots are hanging on hoping it'll get better.
It doesn't get better than this.
I was ready to retire at 55 but the buyouts were not allowed in my specialty so I had to wait 5 years and no buyout. I will get even.
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