From left, Sens. Richard Burr, R-N.C., and Tom Coburn, R-Okla., are the backers of a bill filed March 17 that would end the Federal Employees Retirement System's defined benefit pension for new employees beginning in 2013. (Getty Images photos)
Sens. Tom Coburn, R-Okla., and Richard Burr, R-N.C., last week introduced a bill that would end the Federal Employees Retirement System's defined benefit pension for new employees beginning in 2013.
The Public-Private Employee Retirement Parity Act would leave the other two components of FERS — Social Security and access to the Thrift Savings Plan with matching funds — in place.
Current employees hired under FERS, as well as new hires in 2011 and 2012, would be unaffected. New members of Congress also would be affected by the bill.
Coburn said the bill is necessary because federal employees receive more generous benefits — and up to 20 percent more pay — than their private-sector counterparts. The federal government disputes pay studies showing feds are overcompensated.
"Defined benefit pension plans are going belly-up across the nation because politicians and employers continue to make promises they cannot keep," Coburn said in a statement. "When American families across the country are being asked to sacrifice in order to meet their basic needs, federal employees and members of Congress should not be the exception."
But the National Federation of Federal Employees said the bill unfairly targets federal workers, and challenged the senators' claims that federal retirement benefits are excessive. A federal employee who earned an average of $50,000 in his three highest-earning years and had 30 years of service will receive an annual pension of $15,000 — "hardly an exorbitant figure by any measure."
NFFE also said that FERS pensions are less generous than those offered under the Civil Service Retirement System, and pledged to defeat the bill.
"These senators think they can pit young federal employees against the old," NFFE Legislative Director Randy Erwin said. "An attack on one is an attack on all. We are going to make sure that this divisive piece of legislation goes down in flames."
Burr said the current cost of federal retirement benefits is unsustainable. He and Coburn cited statistics from the Office of Personnel Management that showed FERS is underfunded by about $900 million and CSRS is underfunded by $673 billion. Unfunded liabilities are the present value of future benefits, minus the net assets in the fund and the present value of future cost contributions.
But the Congressional Research Service said in a report in September that the government's retirement funds aren't in danger of becoming insolvent, and will be able to meet their obligations "in perpetuity." CRS said OPM actuaries expect the fund assets will continue to grow over the next several decades until they reach $15.3 trillion in 2080, and CSRS and FERS assets in the future will far exceed annual benefit outlays.