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Feds could pay 0.8% more for retirement

Feb. 15, 2012 - 06:00AM   |  
By STEPHEN LOSEY   |   Comments
Colleen Kelley, left, and John Gage hold a press conference Feb. 15. Kelley heads the National Treasury Employees Union and Gage is president of the American Federation of Government Employees.
Colleen Kelley, left, and John Gage hold a press conference Feb. 15. Kelley heads the National Treasury Employees Union and Gage is president of the American Federation of Government Employees. (American Federation of Government Employees)

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Federal union leaders Wednesday denounced a reported deal between Republican and Democratic lawmakers and the White House to hike federal employees' pension contributions to help pay for an extension of unemployment benefits.

American Federation of Government Employees National President John Gage and National Treasury Employees Union President Colleen Kelley held a joint press conference on the fast-moving deal. Gage and Kelley said lawmakers hope to raise $15 billion by making feds pay more. Extending unemployment insurance through the rest of 2012 would likely cost $30 billion.

Feds could see their pension contributions increased by 0.8 percent, they said, although that could change. That would mean employees under the Federal Employees Retirement System would pay 1.6 percent of each paycheck toward their pensions after the hike, and Civil Service Retirement System Employees would pay 7.8 percent. Gage and Kelley expect Congress to vote on the plan this week.

The union leaders said it is outrageous to keep asking federal employees to sacrifice when they are already operating under a two-year pay scale freeze that is expected to save $60 billion over a decade.

"What grates me here is, we have workers being asked to pay for something they didn't cause," Gage said. "We are calling on leaders in Congress as well as the White House to change this course and find another way to pay for unemployment insurance, rather than take it from middle-class working families."

And there could be even more cuts to take-home pay and pensions coming. President Obama on Monday reiterated his call to phase in a 1.2 percentage point increase to federal pension contributions 0.4 percentage points per year for three years and eliminate the FERS Social Security supplement for future federal employees.

HR 3813, sponsored by Rep. Dennis Ross, R-Fla., would go further and raise current feds' contributions by 1.5 percentage points, eliminate the FERS supplement for all employees who retire after this year, and for future employees, steeply cut their pensions and require them to contribute 4 percent.

"If history is any indication, they'll forget about that 0.8 percent, just like they forgot about the two-year pay freeze," Kelley said.

The Washington Post reported yesterday that Republican lawmakers gave Democrats a choice between a federal pay freeze extension and an increase to their retirement contributions, and Democrats preferred the pension contribution increase.

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