Legislation Introduced to Repeal Increases in Federal Employee Pension Contributions

By on July 31, 2014 in Current Events, Pay & Benefits with 24 Comments

Reps. Donna Edwards (D-MD) and Gerry Connolly (D-VA) have introduced legislation that would repeal the recent increases in federal workers’ pension contributions.

The legislation is known as the Federal Employee Pension Fairness Act and would repeal two recent increases in pension contributions for newly hired federal workers under the Federal Employees Retirement System (FERS).

New federal employees under FERS have had to pay more towards their retirement since 2013. Under the terms of an agreement reached in 2012, federal employees hired beginning in 2013 who have less than five years of service would have to pay 3.1% towards their pensions instead of the previous 0.8%.

A budget agreement reached in 2013 that avoided a government shutdown raised pension contributions paid by federal civilian workers hired after January 1, 2014 by 1.3%. This means that the contribution amount for new FERS employees became 4.4% of their salaries instead of the 0.8% most federal employees pay.

If all of this sounds confusing, it is because it is. FedSmith.com author Ehren Clovis wrote an article explaining the new tiers of FERS and the pension contribution amounts of each in more detail. See FERS, FERS-RAE, FERS-FRAE… What Does All This Mean? for more information.

The bottom line, however, is that should the Federal Employee Pension Fairness Act pass into law, it would take FERS pension contributions back down to the previous 0.8% for all federal employees under the FERS system.

Speaking on the legislation, Edwards said:

“Federal employees are the backbone of our federal government and agencies. Despite their sacrifices and commitment to service, federal employees have experienced a three-year pay freeze, unpaid furloughs, the elimination of cost-of-living increases, and seen their own contributions to their pensions increase by over 500%.

“As a nation it is our duty to ensure the fair treatment of our federal employees, especially during times of economic strain. Let’s stop unduly burdening our federal workers, and start asking wealthy corporations to pay their fair share. I look forward to working with others in Congress to pass this legislation and to providing relief for those whose daily labors keep our government up and running and who keep us safe.”

Federal employee advocacy groups were quick to offer their support for the proposed bill. “These increases in retirement contributions came at a time when federal employees’ pay was frozen, sequestration budget cuts threatened their jobs and unpaid furloughs undermined their earnings,” said NARFE President Joseph A. Beaudoin. “Passage of this bill would be the first step toward reversing this trend and ensuring we can continue to recruit and retain the best and brightest into public service.”

AFGE National President J. David Cox Sr. said, “Congress has placed an immense burden on our public servants, with no regard to the harsh economic pain these modestly-paid, middle class Americans have suffered. Rep. Edwards has been a staunch supporter of federal workers and understands that they should not be used as an ATM for those whose real goal is to dismantle the programs and agencies that employ this workforce.”

Not everyone agrees with the Congressmen and the union, however. Past budget proposals from the House Budget Committee have proposed increasing pension contributions even more as well as reducing the overall size of the federal workforce and extending the pay freeze through 2015.

However, like many things in life, fairness often lies in the eye of the beholder.

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

Tags:

About the Author

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.

Top