Feds Would Pay 5% More for Retirement Benefits

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By on April 25, 2012 in Pay & Benefits with 0 Comments

Updated 4/26/2012 1:08 PM CDT

The House Oversight and Government Reform Committee on Thursday approved legislation that would require federal employees to have to pay 5 percent more of their salaries towards their retirement benefits beginning in 2013 and phased in over five years.

Current federal workers would pay 1.5 percent more next year, an additional 0.5 percent in 2014 and then another 1 percent per year from 2015-2017.

New hires would see the full 5 percent increase starting in 2013 if they have less than five years of prior federal service.

Members of Congress and their staff members would not be exempt from the legislation either should it ultimately pass. Members of Congress would have to contribute an additional 8.5 percent from their salaries, and Congressional staffers under CSRS would pay 8.5 percent while staffers under FERS would be required to contribute an additional 7.5 percent.

Speaking on the legislation, committee Chairman Darrell Issa (R-CA) said, “Like Social Security, the Civil Service Retirement and Disability Fund is not a store of wealth, it’s a line on the Treasury’s ledger. If the federal government’s out of control spending is not curbed, these accounts will prove just how empty they really are — we need to secure these earned employee benefits and reduce the deficit at the same time.”

Federal union leaders had sent letters in advance of the committee review protesting the legislation, and some Democratic House members were unsatisfied with the legislation during the review as well. Rep. Elijah Cummings (D-MD) called it an “effective pay cut” for federal workers and Rep. Gerry Connolly (D-VA) said the proposed legislation was “odious to federal workers.”

The legislation is not the first such proposal to come from the House that takes aim at federal pay and benefits. Paul Ryan’s (R-WI) budget proposal contained increased pension contributions and an extended pay freeze, and the Republican Study Committee released a budget blueprint that contained increased pension contributions as well.

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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.