House Committee Hearing Addresses Proposed Benefits Cuts

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By on May 17, 2018 in Pay & Benefits with 0 Comments

A hearing held yesterday by the House Committee on Oversight and Government reform addressed various proposals to cut the retirement benefits of federal employees.

Front and center at the hearing was OPM Director Jeff Pon who faced questions from lawmakers about OPM’s recent proposals to make cuts to federal workers’ benefits, such as increasing the share that federal employees contribute to the Federal Employees Retirement System (FERS) and reducing or eliminating COLAs for federal retirees.

Also in attendance at the hearing was Office of Management and Budget Deputy Director for Management Margaret Weichert.

Pon was asked a pointed question from Congressman Elijah Cummings (D-MD) who called the proposed cuts “draconian” and wanted to know if $143 billion (over 10 years) in proposed reductions would really help to build a 21st century workforce.

Pon stressed that the government needs to look at making benefits portable so people are more free to move around within various jobs in the government. He said:

These proposals are to make sure that we are making decisions around how we can operate the federal government in the 21st century. I do believe that we need to take a look at other vehicles, not just pensions, but defined contributions plans, so that they become much more portable for people to leave government and come back with portable benefits versus ones that are based upon tenure and also years of service.

Cummings also asked about cutting COLAs. He said, “You want to take from those that can least afford it [current retirees] and give it to the richest among us; how is that fair?”

Pon said that the current federal retirement system is “a bit out of whack” because he doesn’t know of any other retirement program that provides COLAs.

“I don’t know of any other retirement system that actually pays for COLAs for annuitants. When federal workers actually get COLAs, it’s a part of the factor in their salaries, and when they become annuitants, it’s not up to the federal government for us to determine where they move in retirement and paying for where they live,” said Pon.

Linking Pay and Performance

One issue that came up in the hearing was with regards to what federal employees had said in the Federal Employee Viewpoint Survey about linking pay and performance. Weichert noted that only 31% of respondents to the survey said that they believe pay and performance are linked at all.

“In other words, they think of some of their co-workers who are just time servers who are getting increases. And I taked another problem is that if you are really a go-getter then maybe you will leave the government,” said Congressman Glenn Grothman (R-WI) who raised the question about pay and performance.

“We are going to change that,” said Pon.

He added, “There are federal employees that are amazing federal workers. Despite the culture that we have that we cannot manage bad performers; it’s very difficult to do that it’s a disincentive for them to stay and I want to make sure that there is differential pay/market based bay so that we can as a government retain the best and brightest for our federal government. That’s what they deserve and that’s what they need.”

The full hearing is available in the video above.

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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.

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