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Capitol Hill deal would raise new employees' retirement contribution to 3.1 percent

Feb. 16, 2012 - 08:28PM   |  
By STEPHEN LOSEY   |   Comments
Sen. Max Baucus, D-Mont.
Sen. Max Baucus, D-Mont. (File photo / Getty Images)

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Congressional negotiators late Wednesday struck a deal to greatly increase future federal employees' retirement contributions to help pay for an extension in unemployment benefits.

The American Federation of Government Employees said newly hired and rehired federal employees would pay 3.1 percent of each paycheck toward their Federal Employees Retirement System pensions under the deal. That would be a 2.3 percentage point increase over the current 0.8 percent contribution rate nearly quadrupling the amount feds pay.

The changes would affect new hires and rehires beginning in 2013, AFGE said. AFGE received its information from Capitol Hill sources close to the benefit negotiations. A congressional source who asked not to be named confirmed what AFGE told Federal Times.

The Associated Press earlier reported that newly hired feds would have to pay 2.3 percent total, or a 1.5 percentage point increase. But the deal has apparently gotten worse for feds.

It is expected to raise $15 billion of the $30 billion needed to cover the cost of unemployment benefits.

Sen. Max Baucus, D-Mont., and Rep. Dave Camp, R-Mich. lead negotiators on the deal are expected to release details on the plan Thursday afternoon.

Unions blasted the news. Bill Dougan, president of the National Federation of Federal Employees, called on lawmakers not to "sell out" new federal employees. He said that federal employees have already sacrificed $60 billion over a decade through a two-year pay scale freeze, and said NFFE is "adamantly opposed" to putting any further costs on them.

Federal employees "have endured the freeze and done their jobs without complaint, because they believed that their sacrifice could make a difference," Dougan said. "Today, we are not so sure that those on Capitol Hill understand the magnitude of that sacrifice. Neither current nor future federal workers got our nation into this mess, yet Congress is trying to heap the responsibility of cleaning it up squarely on their backs."

AFGE National President John Gage said he is outraged by the reported deal.

"Cutting take-home pay for working class men and women is exactly the wrong thing to do to put Americans back to work," Gage said.

The plan apparently would not affect current feds.

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