Kelley: Federal Employees Are Not Overpaid

By on November 18, 2011 in Current Events with 28 Comments

National Treasury Employees Union national president Colleen Kelley said in a recent Q&A live chat session on the Washington Post’s Web site that federal employees are not overpaid. It was in response to a previous conversation the Post had with James Sherk of the Heritage Foundation in which he contended federal employees are overpaid.

Below is a small sampling of the entire conversation.

Q: In my office, the pension federal employees receive is the envy of all – especially since our employer just terminated our pension plan. While their annual salaries may be less than that in the private sector, their total compensation is nothing to sneeze at. I know several people who retire from the feds when they are in their 50s, collect their 80% of their salary pension for life, and secure another job either as a fed contractor, a state employee, or a private sector employee. A pretty nice deal, if you can get it.

Kelley: Of course NTEU does not support any employer terminating a pension plan but there is a lot of fiction out there about federal pensions so let me provide some facts.

The Federal Employees Retirement System (FERS) was established by Congress in 1983 and is today fully funded. Let me repeat: FERS has no unfunded liability.

The program’s design is a “three-legged stool” comprised of a small annuity, Social Security and a savings plan.  It provides modest, middle-class retirement security to its workers.  Yet, some in Congress are calling for the abolishment of the defined benefit portion of FERS.

The typical federal employee with a lifetime of service in the federal government will have an annuity from the defined benefit of approximately $1,000 per month.  The government’s 401(k)-like fund, the Thrift Savings Plan, may provide an annuity of around $400 per month if the average employee is able to fully contribute 5 percent of salary for 30 years.  Contrary to what some may claim, there are no federal employee millionaires.  Not even close.

Q: Has anyone ever actually given a reason for their assertion that public sector employees are overpaid? Where is the data to back that up? I am a lawyer, and I would be making about twice as much in the private sector for doing the exact same job. And no, I don’t really work fewer hours, at least nowhere near enough to make up for the pay discrepancy. I work for the government because I want a mission behind my work (besides money).

Kelley: In fact, the Bureau of Labor Statistics supports the view that especially highly skilled employees in the federal sector (like lawyers) are significantly underpaid compared to their private sector counterparts.  Other studies  that put forth different data are funded by idealogical groups pushing an agenda.

The full transcript contains all of the questions and Kelley’s answers regarding federal pay.

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