Legislation Introduced to Roll Back Increased Pension Contributions

By on February 5, 2015 in Current Events, Pay & Benefits with 49 Comments

Rep. Donna Edwards (D-MD) has reintroduced legislation that would lower the pension contribution amounts for new federal employees.

Under the Middle Class Tax Relief and Job Creation Act of 2012 and the Bipartisan Budget Act of 2013, pension contribution amounts for new federal workers went from 0.8% to 4.4%. This legislation (H.R. 785) would roll back pension contribution amounts to the previous level of 0.8%.

The legislation would instead raise taxes on corporations to make up the difference in lost revenue to the government.

In a statement about the legislation, Edwards said:

“Federal employees are the backbone of our federal government and agencies. Whether protecting our borders, conducting life-saving medical research, or ensuring our food and medicine is safe to consume, public servants perform duties vital to the health, safety, and economic well-being of the American people. Yet after all their sacrifices, during the past four years federal employees, including nearly 52,000 in my congressional district, endured unpaid furloughs, saw the elimination of cost-of-living increases, and were forced to increase their own contributions to their pensions by over 500%. It is our duty to ensure the fair treatment of the federal employees who have served our nation so well, especially during times of economic strain.”

Federal employee advocacy groups were quick to back Edwards’ bill.

NARFE president Richard G. Thissen said:

“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. Passage of this bill would be the first step toward reversing the trend of dipping into the federal employee piggy bank to pay for other congressional priorities. It also will help to ensure we can continue to recruit and retain the best and brightest into public service.”

AFGE national president J. David Cox, Sr. added, ““Federal employees hired beginning in 2014 are paying five and half times more toward their retirement than employees hired just two years earlier, while those hired in 2013 are paying four times more. This is a major financial burden on these employees and it’s time for Congress to do the right thing and roll back these unfair increases.”

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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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