Many articles have already been written about the administration’s 2020 budget and the proposed cuts to federal retirement and benefits. It’s appropriate that the budget was released close to Groundhog Day, because it contains yet another repeat of previous threats from prior budgets submitted by the current and by prior administrations.
One thing that is different this time is that the administration, through Margaret Weichert, the deputy director for management at the Office of Management and Budget (OMB), stated that the changes would only apply to future federal employees; that is, those hired after the changes are implemented.
In the past, Congress was loath to vote to cut benefits for us because they would also be cutting their own. Now, they might be more likely to support the proposed changes.
The proposed changes that will affect retirement are:
- Increasing the contributions employees make towards their FERS retirement;
- Eliminating the Retiree Annuity Supplement for FERS employees who retire at an age younger than age 62;
- Switching from a high-3 to a high-5 for computing FERS annuities;
- Eliminating the COLA from FERS pensions and cutting it by a half percent for CSRS retirees. Apparently, the administration’s pledge that the changes would only apply to future employees does not carry over to future retirees; and
- Lowering the return on the Thrift Savings Plan’s G Fund.
It may be reassuring that these changes (if implemented) will not affect current employees, but these changes are symptomatic of an attack on the institution of retirement that has been ongoing for several decades. There are some in Congress who want to do away with the FERS pension in its entirety, leaving future federal employees to rely on their TSP and Social Security.
When we listen to those who threaten our benefits, we hear calls to “bring federal benefits in line with those in the private sector”. At one time, our benefits were in line with those received by private sector workers.
Our benefits have barely changed; however, those in the private sector have been constantly eroded. There are far less private sector pensions than there were in the past. 20% of private sector 401(k) plans have no match. Close to half of private sector employees don’t have access to a workplace retirement plan. We are engaged in a race to the bottom.
Our concern should not be about ourselves; it should be about our children. Will our children have the same kind of retirement security that we do? None of my adult children have a pension. Their 401(k)s are not as good as the Thrift Savings Plan. Let us not fail to contact our elected representatives and ask them to oppose this attack on our benefits. While we’re at it, let’s ask them to oppose the continuing erosion of retirement benefits for all Americans.