Retire or Work Until Death?

1. Retire or Work Until Death? I can’t believe we are having this debate.

2. What they are saying: The banker The entrepreneur The pundit The commissioner

3. What they did so far: FERS RAE FERS FRAE

4. What they tried to do last Congress: • Increase employee retirement contributions while working • Decrease employer retirement contributions • Decrease employee benefits when retired • Decrease Social Security benefits • Decrease employer Thrift Savings Plan contributions

5. What they are trying to do now: • Increase employee retirement contributions while working • Decrease employer retirement contributions • Decrease employee benefits when retired • Decrease Social Security benefits • Reduce TSP earnings

6. Quotes from the Oligarchy Bank CEO when asked about retirement insecurity for working class people: “They don’t have any money while they’re working, so why would they have any money in retirement?”

7. Quotes from the Oligarchy Conservative author on the good old days: “In the old days, there were, broadly, two phases of human existence. You were a child until age thirteen. Then you were a working adult. Then you died. Now there are four phases. You are a child until twelve... Then you are an adolescent.... Then you work, after a fashion. Then you quit at sixty-five, sixty, fifty-five... Whatever you can get away with, and enjoy a three decade retirement at public expense.”

8. Quotes from the Oligarchy Tech entrepreneur arguing retirement is not consistent with biblical teachings: “There’s nothing in the bible that talks about retirement… Nowhere does it say, ‘Well, he was a good and faithful servant, so he went to the beach.’ It doesn’t say that anywhere… Noah… wasn’t like, cashing Social Security checks, he wasn’t hanging out, he was working. So I think we have an obligation to work. “

9. Quotes from the Oligarchy National Commission on Fiscal Responsibility and Reform: “[Federal] pensions are out of line with pensions available in the private sector…Recommend a ten-year savings target of $70 billion.”

10. Federal Pensions: out of line with what? 1970 - 45% private sector workers had employer sponsored pension coverage 1980 – 46% private sector workers had employer sponsored pension coverage 1990 – 43% private sector workers had employer sponsored pension coverage History of Pension Plans, Employee Benefit Research Institute, 1996 During this time [ @1995], it became more common for management to terminate a DB plan in order to recapture pension surpluses for use in other corporate operations (having used the plan as a sort of corporate savings account.) There were even instances in which so-called corporate raiders acquired a company in order to seize the surplus pension assets. Defined Benefit Plans: A brief history, Russell Research, December 2014 2015 – 23% private + public sector workers had employer sponsored pension coverage • Retirement Security, GAO Study 15-419, May 2015

11. 10 Year $70B Target 2.6 Million active federal employees 1.8 Million retired federal employees $7Billion / 4.4 Million = ?

12. 10 Year $70B Target $7Billion / 4.4 Million = $1,590 each year for each employee and each retiree for 10 years, then for life

13. Where does the $70B come from? • High five instead of high three (saves $500 million in 2015, $5 billion through 2020) • Defer COLAs for all retirees until age 62 (saves $5 billion in 2015, $17 billion through 2020) • Adjust the ratio of employer/employee contributions (saves $4 billion in 2015, $51 billion through 2020)

14. What they did so far: FERS RAE – Middle Class Tax Relief and Job Creation Act of 2012 Increased employee contribution from 0.8% to 3.1% basic pay for those hired in 2013; reduced employer contribution from 11.9% to 9.6% FERS FRAE – Bipartisan Budget Act of 2013 Increased employee contribution to 4.4% of basic for those hired in and after 2014; did not reduce employer contribution Congressional Research Service Report 7-5700 3/24/14

15. Do the FERS RAE and FERS FRAE math: 0.8% to 3.1% = 2.3% x basic pay $58K = $1,334 annually 0.8% to 4.4% = 3.6% x basic pay $58K = $2,088 annually

16. What they tried to do last Congress: • CSRS employees pay 12% - House Continuing Resolution passed 3/29/12 • Kill the Special Annuity Supplement –HR 3813, Admin 2013 budget • Reduce Social Security benefits – Administration 2012 and 2013 budgets • No matching employer contribution to TSP – S 1486 • Kill the FERS annuity benefit – S 644 • High 5 instead of High 3 average –Securing Annuities for Federal Employees Act 2012

17. What they are trying to do now: • NoCOLAs: CSRS or FERS till age 62 • High five instead of high 3 • Equalize employee/employer contributions • CSRS 13% - 13% • FERS 6.35% - 6.35% • Reduce TSP earnings on G fund to about zero • House Continuing Resolution 96: for FY 2015 and through 2024

18. Dwight Eisenhower in a letter to his brother: Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes you can do these things. Among them are H.L. Hunt (you possibly know his background), a few other Texas oil millionaires, and an occasional politician or business man from other areas. Their number is negligible and they are stupid.

19. Retire or Forced to Work Until Death? I can’t believe we are having this debate.

20. Herbert Hoover: