House Passes Bill Increasing Retirement Contributions by 5%

By on December 20, 2012 in Current Events, Pay & Benefits, Retirement with 211 Comments

The House narrowly passed the defense sequester replacement bill tonight, also known as the Spending Reduction Act, by a vote of 215-209.

The bill would increase federal employees’ contributions to their pension plans 5% over five years beginning with a 1.5% increase in 2013. The language in the legislation outlines a percentage increase schedule for both FERS and CSRS employees as follows:

  • 2013: 1.5%
  • 2014: 0.5%
  • 2015-2017: 1% per year

The legislation text also addresses the unfunded liability of CSRS, stating, “Any contributions under this subsection in excess of the amounts which (but for clause (i)) would otherwise have been payable shall be applied toward reducing the unfunded liability of the Civil Service Retirement System.”

The bill would also end the Social Security supplement at retirement for federal employees hired beginning in 2013.

It may be somewhat comforting to know that the bill also increases pension contributions for members of Congress and Congressional employees; the language dictates a total increase in Member contributions of 8.5% over five years starting in 2013.

The House passed a version of this bill back in May by a vote of 218-199, but Democrats in the Senate refused to consider it.

Federal employee advocacy groups have been loudly decrying the bill leading up to its vote today.

NTEU President Colleen M. Kelley said, “Make no mistake, an increased contribution toward one’s pension, with no corresponding increase in benefits, is a pay cut.”

NARFE National President Joseph A. Beaudoin said in a letter to House members, “All told, this proposal will cost federal employees $83 billion over 10 years without any corresponding increase in retirement benefits. Over the last two years, federal employees have already contributed $103 billion towards deficit reduction.”

The White House also spoke out against the bill in a blog post on its web site, saying it would hurt middle class families, but it made no reference to the impact it would have on the federal workforce, perhaps because the White House has also proposed raising pension contributions in its 2013 budget proposal.

There is at least one individual who likes the idea of the Spending Reduction Act: Congressman Dennis Ross (R-FL) said in a statement, “Our country has a spending problem. I am pleased to support this common-sense legislation that funds our troops and saves hard-earned taxpayer money.”

Passage of the bill in the House is a largely symbolic gesture as the Senate is unlikely to consider it, especially noting that the one in May was ignored.

© 2016 Ian Smith. All rights reserved. This article may not be reproduced without express written consent from Ian Smith.

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Ian Smith is one of the co-founders of FedSmith.com. He enjoys writing about current topics that affect the federal workforce. Ian also has a background in web development and does the technical work for the FedSmith.com web site and its sibling sites.

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  1. ThinkAgain says:

    They just don’t get it.  Most Federal workers don’t have Cadillac benefits.  Those who do, were hired before 1984 under CSRS, and most have retired.  Most middle class Federal workers (non-Postal/non-State) are FERS employees who are already paying dearly and hurting.  The pay freeze was and is equal to a 2% net (TAKE HOME) pay cut.  They just raised OASDI TAXES (most recognize it as SSI but it’s really a form of welfare as it goes to people who never worked or contributed one dime to it when they are somehow disabled in a fall or auto accident).  The working people, myself included, who contributed will never collect any of it.  So, I took another 2% pay cut as of January 1, 2013.  This week our healthcare premium and copay increases kick in, so I’ll take another pay cut this coming Friday.  In 2012 I put better than $7,000 out of pocket, that is also net pay and after high premiums, just for doctor’s visits and prescriptions.  I shudder to think of what it will cost this year, as every year we pay higher premiums and copay as well as get less and less coverage.  Let us not forget that my property taxes, homeowners, gas, electric, water, and sewer bills also went up just like every other middle class American.
     The above said, for those lawmakers and those who agree with attacking my retirement plan, that, by the way, I have paid into for years, had better think long and hard about what they are about to do.  Everyone should care.  This country is driven by consumer spending, and FERS Federal (non-Postal) employees are consumers.  I already have so very little expendable income after bills, healthcare costs, and retirement contributions, and I am quite sure there are many more other FERS Federal (non-Postal) employees just like me.  Mark my words, if the Senate goes along with the House on this bill, all non-federally employed Americans will feel it their pockets as well.  If we all stop spending, growth will slow and more employers will lay people off.   It’s simple economics.  The kind your kids learn in grade school.  Supply and Demand.  When demand drops, supplies sit.  When supplies sit, people get laid off. 
     I work hard every day making sure American Servicemen and Servicewomen get the supplies they need when they need them, despite the constant vilification, and I will continue to do so, because they deserve to be treated the same way I would want my family members to be treated, but I will be keeping every penny that doesn’t go toward another bill in my pocket.  It will not flow back into the economy.  Trust me when I say I will.  I boycotted a large store for false advertising back in 2000.  They closed last year.
     

  2. unionrep says:

    All I can say is that I’ve quietly accepted the fact of a pay freeze as believing I am doing my part to rein in federal spending and reduce the deficit. It’s certainly not any union’s fault.  Being part of a union requires a fundamental belief in the good of all as opposed to the good of “me”. It really takes a simple-minded selfishness to take from the gains that unions have made, without giving them the support, not to mention mere recognition needed to resist their marginalization and eventual destruction. The real question is why federal employees and  why now? What has made the value of federal service spoil? Over the past 20 years, politicians have degraded the value of FERS, stalled COLAs for both active and retired workers, denied the “payroll tax holiday” to CSRS active workers, and hit us with a pay freeze. In addition, they have cut staffing size in spite of the increased workloads simply caused by an expanding populace, which means that employees are becoming more productive – the public is getting more value for their tax contributions. There is nothing more to gain from continually whacking away at federal employee compensation – with one exception, and that is, long story short, to eliminate public service to satisfy the puerile interests of anti-government ideologues.

  3. miramar3 says:

    It was bound to happen. I posit contributions will increase to 9% and Govt contributions will eventually go to zero. Thank the GOP and their misanthropic followers.

  4. stingray says:

    glad  i have food on table

  5. Jarvis32 says:

     2014 can’t arrive fast enough!
     The republican obstructionist, anti-government employees- republicans (who are only trying to crush the unions)
    MUST GO!

  6. Coolnesski says:

    Our country has a spending problem?  Um we’re bred to be consumers thriving on consumption, what do you expect.  And especially with the selfish greedy baby boomers in congress now.   Oh, and FYI Republican Congressman Ross, all the “evil” spending was initiated during the Republican Bush dark ages.  It’s just that now we think we have to spend our way out of all that debt. 

  7. HRguru says:

    “You won’t find a more wretched hive of scum and villainy.”  -this comment section

  8. TarbetJST says:

    What is the Government going to pass when they put many Government workers in the poor house.  What program is available to help them?  Take, take and take.  Totally digusted.

  9. thoughtsonapenny says:

    One question……..WHO came up with the idea of DHS and the TSA…could it be the same guy and congress that got us all into most of the mess in which we currently find ourselves and then THEY (same congress, different guy) decide it is us who must pay the ferry man to cross the DRY RIVER they created after they sucked the “water” out of it………….I suggest you all forget your lame ideology and look at the REAL problems, the REAL people who caused this and get ready to feel the pain for something that is not your fault save for the vote you cast!  This is though primarily a congressional problem since no matter WHAT a president may propose nothing happens without congressional approval and appropriation absent a veto……………….let’s lower the volume of BS personal attacks on this site and discuss the real problems, reason, and solutions……..and I need to follow my own advise too I guess!  Merry Christmas.  See you all at the bottom of the fiscal cliff!  Anyone got a few bucks for the beer!

  10. Steve Neal says:

    We really need to stick together and let the Federal Gov’t know that legacy and existing retirement benefits and annual pay raises are the reason we soght and accepted gov’t employment in the first place.  Many of us, in-fact, took a pay cut from the commercial workforce to gain job security AND these “guaranteed benefits and raises.

    It is mighty shady of the gov’t to pull the rug out from under us, first.  We are sitting duck, as far as pay goes, since we are paid directly and only from taxpayer funding.  However, our lawmakers are on the taxpayer payroll too…   Congress should have foregone any pay raises since 2009, and be paying more than their fair share across the board.  I mean, they should totally give up their free medical care, refuse or donate their congressional retirement / pension, and accept a 10% pay cut like they’ll give us (taking inflation into account). 

     Since congressional and executive inaction is pushing us all off the fiscal cliff, I think they should jump first!!!

    • $15300432 says:

      Took a pay cut to work for the federal govt… maybe on bizzaro land but not in the US. The avg fed makes TWICE what the avg taxpayer earns

  11. Jeff says:

    There is one thing for certain Government has solved the problems of Americans, they have created problems for Americans.  Professional Politicians a life time of security on the backs of hard working Americans. The lunitic Socialist Party and the disgusting Re-puking Party.  I love America it’s the Government I hate.

  12. Pat says:

    You all want to know who is responsible for all this mess?  It is not the Repulican party or the Democrats.  It is US; you and I who have stood by and let this happen. It is us,  the American people who voted these people into their positions.  We now do nothing, but gripe and complain.  We need to all STAND up and protest these laws.  Our constitution is stated For the People; by the People.  Lot of folks right now sitting by getting government help and free stuff while we the working class are paying for it in our taxes.  We get small pension raises, and then it goes back into higher taxes and insurances.  I would like to know, though why the Obama adminstration is taking the indebtness out on Federal employees; it is not our fault so now we have to pay for the problem they caused. A lot of   Federal employees in WV and other states DO NOT make $80,000 to 100,000 .  There is not easy out. I see things getting darker for the United States.

    • Japygid says:

      To a large extent, I agree.   We would not be in this mess without “the consent of the governed.”  Pogo was right: “we have met the enemy and he is us.”

      The fiscal cliff is, in my opinion, just an acute episode in a chronic disease.  There is no getting around it.  The only way to recover from this mess is for many millions of people to feel lots of pain for an extended period of time.  Really.

      (By the way, “…for the people, by the people,…” is not in the Constitution.  It was said by Abraham Lincoln, in his address at Gettysburg.  I believe he was not the first to say it, but he made it famous.)

      • Lightnfit4u says:

        No one has to feel any pain at all – just tax those making over 250K progressively to force a balanced budget  every year.  Stop screwing over the middle class.  The beloved GOP Eisenhower did it – we can do it too.  Yes these is enough revenue to do this.   250K – 500K + 5%,  500K – 1M – +10% – 1-5 million +15% – 5m+ – +20%. 

  13. Dirty Harry says:

    If this doesnt get done as the 11th hour loomed and came, this will be more devasting than pearl harbor. I am appalled. A short term and long term approach should be utilized. Set aside politics, do it for America.

  14. Michael says:

    That was the house republicans that did this.

  15. No_Real_Answers says:

    Two more years and we can clean the House, remove the trash, and disinfect the stain left by the tea party.

    • HR Manager (Retired) says:

      Yes, but if workers do not act to stop efforts to reduce their benefits now in two years it will be too late.  By then your benefits will have been gutted.   The time to act is now but if those commenting are representative of todays’ Fed’l workers it may already be too late as most have failed to stay on point.  Sadly the majority of the discussions have to do with name calling, finger pointing and everything other than banding together to counteract this proposal. 

    • $15300432 says:

      Think your wrong on that barak’s term is 4 more years so the damage can’t be removed

  16. RicknATL says:

    Such idiots. They refuse to make the rich pay anything at all toward reducing the deficit and balancing the budget, but it is open season on the middle class federal employees.  Little wonder their approval rating is less than 10%…and ya gotta wonder about those 10%.

  17. HR Manager (Retired) says:

    Interesting, sad and just as I thought.  After the submission of 86 comments few , if any, of those submitting comments call for any action by those currently in the workforce to protect further reduction of their benefits.  Instead those commenting are focusing their attention on unions (they are good – no they are bad), on politics (its OBama – or no it is not OBama) on math formulas which “show” little impact or on name calling.  As I mentioned in an earlier posting, if you (the current workers) don’t get your act together to fight this increase you will not only get screwed on this issue but this will open the door to other benefit reductions.  If you want to have your benefits reduced I am OK with it but it you don’t focus on stopping those who do instead of on each other.

  18. Enchanted says:

    One thing missing that I do not seem to find in this article. Is this for newly hired personnel or all personnel already in the system?  I had read previously it was just for newly hired. 

    • polanalyst says:

      This particular bill applies to ALL personnel. Earlier this year as a part of the payroll tax cut extension deal. contributions for newly hired went up to 3.1%. Present personnel was grandfathered and shielded from that one.

  19. Guest says:

    “I told you so” back over a year ago.
    Watch, they have yet to announce that they will go after your accumulated S/L, A/L, TSP, and radically increase Med Ins employee contributions. 

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