Workers Plan to Retire, Without a Retirement Plan

By Stephen Barr
Thursday, June 29, 2006

More than half of federal employees expect to retire before age 62, with almost four in 10 looking to retire at 59 or earlier, according to a survey conducted for the Office of Personnel Management.

But less than half have calculated how much they need to save for a comfortable retirement, and only two in 10 federal employees have a professional financial adviser to help with retirement planning.

It's probably no surprise, then, that the survey also found that almost eight in 10 employees said they were "very" or "extremely" interested in receiving more help from their agencies to prepare for retirement.

OPM commissioned the survey as part of an effort to address concerns in Congress that federal employees too often receive incomplete retirement counseling or start their retirement planning later than recommended.

The survey will be used to develop a "retirement readiness index profile" for government workers that will show them where they stand compared with an age-based group of peers and will help them consider the various factors, including finances, that go into successful retirement planning.

According to the survey, nearly six in 10 federal employees have given significant thought to when they would like to retire, a finding that OPM senior policy adviser Doris Hausser said is not surprising, because of the government's retirement rules.

Federal employees can qualify for pensions that are adjusted for inflation and can take their health insurance into retirement after meeting age and career requirements. Many employees, for example, become eligible to retire at 55 with 30 years of service.

The survey also found that 91 percent of the survey respondents make pretax payroll deductions to the Thrift Savings Plan, a 401(k)-type program for government workers.

The survey did not ask the employees to estimate their TSP savings, but it did ask if they had savings outside the TSP. About a quarter said they have personal savings of between $50,000 and $149,999, and more than a quarter said they had saved $150,000 or more.

"We seem to have a sophisticated workforce that is using a lot of foresight," Hausser said.

But the survey turned up some troubling signs.

One of the government's retirement programs, the Federal Employees Retirement System, provides Social Security benefits, but 27 percent of survey respondents in FERS indicated that they were not certain they were covered by Social Security.

Even though most employees invest in stocks, bonds and government securities through the TSP, "between seven and eight in 10 federal workers describe themselves as having some or only a little knowledge of investments and feeling somewhat or not too confident about their knowledge or ability to make investment decisions for retirement," the survey report said.

The survey was based on data from 7,294 employees and was weighted by age, gender, race and salary to match actual proportions in the overall workforce. The margin of error was plus or minus 1.4 percentage points.

Union Election

The majority of Customs and Border Protection employees have selected the National Treasury Employees Union to represent them in an election overseen by the Federal Labor Relations Authority.

Customs and Border employees cast 7,369 votes for the national treasury union, 3,426 for the American Federation of Government Employees, and 211 for neither, the labor authority said. CBP had asked for the election to reduce union jurisdictions and to reflect a new chain of command growing out of the merger that created the Department of Homeland Security.

Peter Winch , national organizer for the government employees federation, said the union would file an objection to the vote count and ask for a new election. CBP managers with ties to the treasury union from the old Customs Service helped NTEU get out its campaign message and showed "total favoritism," Winch said.

Kristi Clemens , spokeswoman for the CBP, said the agency "worked hand in hand with FLRA and representatives from AFGE and NTEU to ensure a fair and efficient election. Throughout the election process, CPB strove to maintain neutrality."

CBP employees, as part of the Homeland Security merger, were consolidated from the departments of Treasury, Justice and Agriculture. NTEU had represented legacy customs employees from Treasury and AFGE had represented former Justice Department immigration inspectors.

Colleen M. Kelley , president of NTEU, said, "We are very pleased that NTEU gained so much support from employees from all the agencies."

Stephen Barr's e-mail address isbarrs@washpost.com.