The benefits of retirement

A reader writes:

Is locality pay factored into retirement? For example, a GS-12 living in Maryland makes more in annual salary than does a GS-12 living in Louisiana. Will the Marylander retire with a greater pension than the Louisianan, assuming all other factors are equal?

Milt replies:

Locality pay definitely does figure into your retirement benefit calculation. Your annuity computation considers your "high three" years. The figures used are your base pay for this period.

A GS-12 living in Maryland does indeed make more than a GS-12 living in Louisiana. Consequently, the GS-12 from Maryland will receive a higher annuity. That's only fair because he/she is earning more and will need more income in retirement because the cost of living in Maryland is greater than it is in Louisiana.

A reader writes:

In the early to mid-1980s the federal government changed the retirement system for all workers. Military retirement got cut and the Civil Service Retirement System gave away to the Federal Employees Retirement System (FERS). Military retirement since has gone back to the same level (50 percent of base pay for 20 years service). However, civilian retirement has not.

Do you see any change in the future to bring civilian retirement back to where it was? I have 12 years active duty and 14 years civil service. I joined civil service in 1988 and do not have the nest egg in FERS that the system is designed to provide retirees. Is there anything planned or addressed to assist unique cases such as mine?

Milt replies:

I'm afraid there is nothing in the works to alter the current retirement system for civilian employees. The present system works best when a worker can make maximum contributions to the Thrift Savings Plan. However, you are now covered by Social Security, something that wasn't true under the old retirement system. And finally, you will receive credit for your military service one way or another, so all in all, you shouldn't fare poorly.

I understand that you don't have the "nest egg" represented by Thrift Savings Plan contributions, but judging by how the market has performed during the past two and a half years, that may be a blessing in disguise.

Zall is a retired federal employee who since 1987 has written the Bureaucratus column for Federal Computer Week. He can be reached at


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