290 Human Resources Management for Public and Nonprofi t Organizations
was established by Congress on June 6, 1986, and went into effect on
January 1, 1987. Most federal employees hired after January 1, 1987, are
covered by FERS, and employees covered under CSRS were given the
opportunity to join FERS.
Like state and local government retirement systems, the federal govern-
ment also has different age and years - of - service criteria that permit certain
groups of employees to retire early and with full benefi ts. Law enforcement
offi cials, fi refi ghters, air traffi c controllers, military reserve technicians, and
defense intelligence Senior Executive Service (SES) and senior cryptologic
SES are some of the positions eligible for early retirement.
Fidelity ’ s Tax Exempt Workplace Savings Tracker found that 55 per-
cent of nonprofi t employees surveyed say they have a pension plan, but
57 percent of those worry that their pension benefi ts will be reduced or
discontinued. This is because many for - profi t organizations, government,
and nonprofi ts have been phasing out pension plans in favor of 401(k) and
other deferred compensation retirement plans (Panepento, 2007a). How-
ever, many smaller nonprofi ts, such as grassroots or social justice organiza-
tions, traditionally have not offered retirement plans. In an effort to provide
activists, advocates, and social justice organizers some future security, the
National Organizers Alliance in 1997 received start - up funds from the
John D. and Catherine T. MacArthur Foundation, the Jessie Smith Noyes
Foundation, Unitarian Universalist Veatch Program at Shelter Rock, Albert
List Foundation, Wieboldt Foundation, Norman Foundation, and the Pub-
lic Welfare Foundation to establish and implement a retirement program
(Billitteri, 1999). Today the coalition ’ s 401(k) plan contains approximately
$ 10 million in assets and manages upward of a thousand accounts. More than
120 nonprofi t employers offer the plan. Some agencies offering the plan are
staffed by two or three people, while others employ up to twenty. The start -
up fee for employers is four hundred dollars, and their yearly administrative
fee is also four hundred dollars, which includes the annual cost for the fi rst
two employees enrolled in the program. For all additional workers, the char-
ity pays twenty - seven dollars per worker. The program requires employers
to contribute a minimum of 5 percent of their employees ’ salaries into their
401(k) plans each year and must contribute even if their workers do not
contribute themselves ( “ Updating a Program, ” 2007).Defi ned - Benefi t and Defi ned - Contribution Pension Plans
Two types of pension plans are commonly found in the public and nonprofi t
sectors: defi ned - benefi t and defi ned - contribution plans.