Yeah, half my gov't time is military so I came into it under FERS. All the bitching about Federal retirement being incredible is grossly misplaced, the defined benefit part under FERS for most employees is just 1% of basic pay pre year of service, so you get 1/3 of your salary if you work for them for 33 years. It's really nothing like the state and municipal defined benefit programs that pay 80% or more of pre-retirement salary that have been in the news.
The 401k-like part is called 'TSP' (Thrift Savings Plan); you can contribute up to 10% to it, the gov't matches the first 5% (Not a purely linear relationship). There are about eight veeeeeery broad investment options you can select, the lowest-payoff/least-risk one is a US Fed bond fund (G Fund) that pays less ROI than a savings account, the highest-risk/highest return one historically has been an S&P index fund (C Fund). You can only change twice a month so a lot of the last 2-1/2 years has been pretty gut-wrenching for anyone trying to maximize value of their fund in the last few years before retirement and recoup the losses of 2008.
If you're a Federal employee under FERS, even with a fairly aggressive approach to TSP as your career and life situation allowed it, you really better have either extraordinarily modest plans and a paid-off house, or another income stream like military retirement or a part-time job lined up, if you want to retire before age 67, when you would start getting the near-max on your SS.
Most of the folk still under CSRS will be out soon then it will be all FERS. If you max your contribution and get lucky in the market you might be able to match the old CSRS. I seem to remember the SS component being touted as providing more portability for folk being laid off.
When you got laid off under CSRS you could not convert it to SS quarters so many people ended up having to take a very reduced annuity. And yes, Federal employees can and do get laid off. Many I worked with over the years who got hit in RIFs, some got other government jobs through priority placement, others were not so lucky.
There is no government match to CSRS people who contribute to TSP but you do get the tax deferral of income. Money paid into SS for CSRS is heavily offset ( I like to think my SS is going to support illegal immigrants
), it was the back lash to double dipping.
All in all the TSP / 401K has been a great program for individual savings for retirement. There have also been abuses and losses. I was talking to a GM salesperson recently who was still down 60K in his account. I didn't ask if it was due to owning pre bankruptcy GM stock or not. The current GM stock had just gone public.
