Politico is reporting today that House Republicans plan to unveil a broader payroll tax cut plan whose top offset to fund the tax cut “will be an extended pay freeze on the federal workforce through the 2015 fiscal year – which includes members of Congress – and changes to the government’s pension program.”
While there are currently no details as to what these proposed changes to the pension program might be, one can reasonably expect them to be along the lines of what has been proposed in various past cost cutting plans.
Some of these previously proposed changes include:
- Moving to high five for retirement
- Switch to a more accurate measure of inflation (chained CPI) for calculating COLAs
- Increasing the employee contribution toward accruing retirement costs by a total of 1.2%
- Eliminating the FERS Annuity Supplement for new employees
We will continue to publish any new details of the payroll tax cut plans as they are released.