Some do at a much decreased payout. Federal Civil Service Wage Grades (WG) didn't pay in and do not draw out. I believe regular Civil Service (GS) do. They're two different systems left over from the 50's. Good friend around the lakehore from me was State employed in Alaska. He has an excellent annuity plan and does draw Social Security, but it's only about $300.00/mo.
The old Federal civil service retirement system (Known as CSRS) ended for new entrants in the 80s. Under it, retirees got neither SS nor Medicare, but had a fairly high defined benefit retirement pay using a formula similar to, but slower-increasing over the years after basic eligibility, than the military retirement system of the time.
Since then, all new Federal civil service is under the current FERS plan, which has a much smaller defined benefit portion and formula, a 401K-like system called 'Thrift Savings Plan' , or TSP (Under a somewhat nonlinear formula, an employee can contribute up to 5% of his or her basic pay, and the government will match that; the employee can put in up to 5% more on his or her own that will not be matched). The lower defined benefit (1% of basic pay per year of service, basically) is compensated by FERS retirees being eligible for SS and Medicare, full taxes for which are collected from their pay throughout their career.
TSP is somewhat lamer than a great many private-sector 401Ks, there are six investment options ranging from an extremely-low-return Federal bond fund to the most aggressive of the six, which is simply an S&P index fund; while you can change your allocation from one fund to another, you are only allowed two changes a month, so it is very difficult (Though not entirely impossible) to act on sudden and drastic changes in the stock market if you opt for the most aggressive available strategy - hopping back and forth between the S&P index fund for the peaks and the safe harbor of the Federal bond fund for the valleys.
I recommend that nobody rely on anything said about these systems on the various business channels, including FBN, because it is abundantly clear from listening to them that none of the commentators have taken the time to study and comprehend how these systems work and the differences between them. They also do not seem to have a clue that they are different from most State, municipal, and school system retirement plans. Nearly all of what the supposedly-smart financial talking heads have to say about them is ideologically-based garbage.
