Page 25 - The Informed Fed--Hearn (edited 10.29.20)

reason is because a financial advisor must seek out this information on
their own, and for the most part, it is self-taught.
We have studied for and sat for many exams and continuing
education programs over the years. None of them required us to know
anything about federal employee benefits to maintain or acquire any of
our licensing or certifications. The information in this book will help you
bridge that gap. Take responsibility for your education and you will
reduce the confusion about your benefits. This book is designed to cover
all areas. Although that makes the book a bit lengthy, it will provide you
with a resource for years to come. Misunderstandings and confusion are
rampant across all sectors of the federal government in regard to your
benefit package. We can’t blame that on the government, your supervisor
or OPM. What I want to make clear in this chapter, is that you must take
responsibility for educating yourself and seeking out all resources that
are available to you. The reality of it is that many federal employees view
their benefits as a confusing bird’s nest of terms and formulas that
cannot be unraveled; they just stick their heads in the sand and convince
themselves that everything will work out just fine with no effort on their
part. Nothing could be further from the truth. Knowledge is power and
you need to arm yourself with this power.
It is beneficial to know the history of the federal employee benefits
system. This will give you a basis from which to work from as you study
the current benefits package as it is now. One thing is for sure, things are
going to change. A major change took place in 1984 that totally
revamped the retirement system. The original retirement system was
called CSRS, or the Civil Service Retirement System. This system paid
employees a guaranteed pension if they met certain requirements (age,
years of service, etc.). Employees didn’t have any additional
responsibilities to ensure a pension. They still had to make choices
concerning FEGLI and health insurance, but the pension was in place
with no decisions made by the employee. The success of the retirement
pension was primarily based upon the employee’s pay grade, years of

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