Congressman Dennis Ross (R-FL) recently announced that he will hold a hearing to explore options for reforming the entire federal pension system to bring it more in line with the private sector.
The hearing will be held Wednesday, January 25, 2012 at 10 AM EST by the House Oversight and Government Reform subcommittee.
Reforms being discussed would also include members of Congress in order to ensure they are treated no differently than the rest of the federal workforce, but they would not affect or reduce pensions for veterans or the military.
According a memo on the hearing, “Congress does not receive 100% of their salary as a pension for life upon serving one term in Congress. However, Members of Congress receive better pension benefits than the rest of the federal workforce, and better than most citizens in the private sector.
“Federal civilian retirement obligations cost taxpayers more than $100 billion per year for current federal employees with costs rising 151% since 2000. In addition, the federal civilian retirement system is estimated to have $673 billion in unfunded potential liabilities.”
The first panel in the hearing will focus on moving the entire federal workforce “to a more realistic and cost affordable defined contribution pension system as opposed to the bankrupting defined benefit plan.” This would also include Congress.
So what might the reforms to the pension system be? That is anybody’s guess at this point, but based on past recommendations, one can reasonably expect ideas such as these to be considered:
- Change the pension formula from high three to high five
- Increase employees’ FERS contributions
- Increase employees’ CSRS contributions
- Eliminate FERS for new hires
- Limit the FERS minimum supplement to employees subject to mandatory retirement
- Defer cost of living adjustment (COLA) to a later age
- Eliminate the FERS Annuity Supplement for new employees
The second panel will focus exclusively on Congress and its pension system and will review cost cutting legislation that has been proposed by six members of Congress.
Those proposed bills are:
H.R.981, Congress is Not a Career Act
Sponsor: Rep. Rich Nugent
Summary: Allows Members of Congress the option to decline benefits afforded through the Federal Employees Retirement System (FERS) and the Thrift Savings Plan (TSP) regardless of when they have been elected.
H.R.2162, Congressional Integrity and Pension Forfeiture Act of 2011
Sponsor: Rep. Robert Dold
Summary: Extends provisions requiring forfeiture of pension benefits under the Civil Service Retirement System (CSRS) and the Federal Employees’ Retirement System (FERS) to the President, Vice President, or an elected state or local government official, in addition to Members of Congress, upon conviction of a serious public corruption crime. Expands the list of such crimes that require pension forfeiture.
H.R.2397, Congressional Retirement Age Act of 2011
Sponsor: Rep. Bobby Schilling
Summary: Prohibits a Member of Congress serving on or after the enactment of this Act from being eligible for an annuity under the Civil Service Retirement System (CSRS) or the Federal Employees’ Retirement System (FERS), unless he or she is separated from the service after attaining retirement age under the Social Security Act and completing five years of service. Denies an early retirement annuity under FERS to any Member serving on or after enactment of this Act who otherwise meets FERS early retirement requirements. Delays entitlement to a FERS annuity until after attaining retirement age under the Social Security Act.
H.R.2652 (12 year vesting requirement for Members)
Sponsor: Rep. Coble, Howard
Summary: Requires that Members must complete 12 years of creditable service in order to be vested in an annuity under the Federal Employee Retirement System.
H.R.2913 (Terminates Members of Congress coverage in the FERS and CSRS)
Sponsor: Rep. Coffman, Mike
Summary: Amends the Civil Service Retirement System (CSRS) and the Federal Employees’ Retirement System (FERS) to exclude Members of Congress, except the Vice President, from further CSRS and FERS retirement coverage. Prohibits further government contributions or deductions from such Member’s basic pay for deposit in the Treasury to the credit of the Civil Service Retirement and Disability Fund. Does not affect either Members’ CSRS benefits for any period before enactment of the Act or the eligibility of any Member to participate in the TSP.
H.R.3480, End Pensions in Congress Act
Sponsor: Rep Griffin, Tim
Summary: Amends the Civil Service Retirement System (CSRS) and the Federal Employees’ Retirement System (FERS) to exclude Members of Congress, except the Vice President, from further CSRS and FERS retirement coverage. Does not affect either Members’ CSRS benefits for any period before enactment of the Act or the eligibility of any Member to participate in the TSP. Allows Members to opt-in to retirement coverage within 90 days after enactment.
Speaking on the upcoming hearing, Ross said in a statement, “The American people are also, rightfully, outraged by the pension benefits guaranteed to a bloated federal workforce, paid for through an ever increasing tax burden on the American worker. Too many hard working Americans watched their pensions evaporate because of unsustainable promises. There is a way to ensure value to the taxpayer and security to the worker, both private and public sector, through a more affordable defined contribution pension system. As Congress looks for ways to cut costs, pension reform that ensures a positive return to the worker while delivering cost savings to the taxpayer, should be job one.”