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hello everyone I'm Ian Smith with
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fedsmith.com I just wanted to bring you
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a quick update about the proposed cuts
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to federal employees retirement benefits
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that have been gradually working their
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way through the legislative system They
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initially originated in the House
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Oversight Committee They passed back at
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the end of April I think it was on April
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30th a package of um cuts that would
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have impacted federal employees
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retirement benefits I've been reporting
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on those throughout the way here on u
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our YouTube channel and also on the
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fedsmith.com website and articles that
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we've written And the latest situation
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is that uh the House passed the spending
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bill for fiscal year 2025 It's now known
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as the Big Beautiful Bill Act It was
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passed late last week on May 22nd When
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the House passed that it made some
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important changes to these proposed cuts
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So I'm going to go over them here
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quickly with you Probably the most
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significant change is that the proposal
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to change the high three to the high
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five has been eliminated entirely from
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the bill This is the change that would
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have required using a federal employees
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highest 5 years of earnings to calculate
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his or her annuity benefits and that's
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again been eliminated entirely Also the
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proposal to increase retirement
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contributions to FURs had been
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eliminated in a previous version of the
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bill and that has carried forth in this
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version as well There actually are now
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only four of the remaining six proposals
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still in the bill So here's an overview
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of those four proposals The elimination
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of the FURS annuity supplement is still
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in the bill The FURS annuity supplement
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is an additional benefit paid uh until
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age 62 to certain federal employees
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under FURs is the federal employees
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retirement system and it's paid to those
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who retire before age 62 and who are
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retired to an immediate annuity It
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approximates the value of first service
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in a social security benefit The
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provision as written in the legislation
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would eliminate the annuity supplement
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effective January 1st 2028 However as
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it's currently written it would not
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apply to federal employees who were
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already entitled to an annuity
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um under under law uh before the
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enactment date of the legislation Also
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it would be preserved for federal
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employees subject to mandatory early
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retirement So for instance law
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enforcement officers air traffic
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controllers Again this is all just based
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on the language of the bill as it's
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currently written Next up the option for
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electing at will employment for new
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hires This provision is still in the
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legislation that passed the house This
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would allow uh newly hired federal
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employees to elect at will employment in
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exchange for a lower contribution rate
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to FURs So if they elected at employment
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their contribution rate to FURs would be
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If they chose not to do this then their
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contribution rate would increase by 5
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point by 5% excuse me So it would be
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9.4% total for most federal employees
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This also would be an irrevocable
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decision based on the wording of the
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legislation So in other words once an
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employee makes this decision it's final
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That's it What this means is that
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federal employees who opt to become at
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will employees could face adverse
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actions including removal without notice
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or the right to appeal the action Per
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the language of the bill as it's
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currently written it says that they
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quote may be subject to an adverse
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action up to and including removal
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without notice or right to appeal by the
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head of the agency at which the
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individual is employed for good cause
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bad cause or no cause at all The next
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provision is the MSPB filing fee that
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has remained in the version of the bill
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that passed the House What this would do
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is it would require the Merit Systems
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Protection Board to establish a $350
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filing fee for federal employees filing
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appeals Um it would be refunded in the
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event that the appeal is successful Also
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the provision would provide exceptions
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for actions brought by the Office of
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Special Counsel and claims alleging
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retaliation against whistleblowers The
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intent of the provision is to reduce
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frivolous employee appeals to the MSPB
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And the last provision is the uh FEB
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protection audits provision I won't get
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into a lot of detail on this one but
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basically it would require the Office of
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Personnel Management to audit the FEB to
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ensure that um family member eligibility
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for FEB coverage and is legitimate and
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remove any ineligible family members who
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were getting FEB benefits that shouldn't
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That's a brief overview of the
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provisions that are still in the House
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bill now that it has passed the House It
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now goes to the Senate for consideration
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And so it's possible there could be more
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changes We've already seen a lot of
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changes to this bill There were six
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provisions Now there are only four and
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those remaining four have changed
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somewhat along the way So we just don't
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know at this point what the end results
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going to be Which of these provisions
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ultimately get passed into law and if
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all of these provisions will even remain
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in the final bill What I can do though
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is continue to keep you updated on the
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status of the legislation So be sure to
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like and subscribe to our YouTube
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channel for more updates on this and
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other topics of interest to federal
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employees and retirees And also be sure
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to visit the fedsmith.com website where
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we're posting articles on this and and
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other topics of interest Have a good day
