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House may vote on phased retirement, instead of higher retirement contributions

Mar. 9, 2012 - 06:00AM   |  
By STEPHEN LOSEY   |   Comments
House Speaker Rep. John Boehner, R-Ohio, speaks at a March 8 news conference.
House Speaker Rep. John Boehner, R-Ohio, speaks at a March 8 news conference. (Mark Wilson / Getty Images)

House Speaker John Boehner, R-Ohio, said Thursday he plans to bring a Senate transportation bill containing a provision allowing federal employees to phase into retirement at the end of their careers up for a vote before the full House.

This would mean the House's troubled transportation bill which contains a provision steeply raising current federal employees' retirement contributions would be tabled. Boehner has had trouble corralling support for that bill, HR 7, even among members of his own party.

"The current plan is to see what the Senate can produce, and to bring their bill up," Boehner told reporters at a news conference.

The Senate on Thursday approved several amendments to its transportation bill, S 1813, including an amendment from Sen. Max Baucus, D-Mont., containing phased retirement. A full vote on that bill could come up as early as next week, after the Senate finishes voting on amendments.

The House is in recess next week, meaning that the earliest it could vote on the Senate bill would be the week of March 19.

Under the phased retirement plan, which the Obama administration proposed as part of its fiscal 2013 budget, federal employees who are eligible for retirement would work part-time near the end of their careers, while receiving a reduced pension and continuing to accrue future retirement benefits. They would be required to spend at least 20 percent of their time mentoring younger employees.

Baucus wants to use the estimated $465 million saved by allowing semi-retirements to pay for public roads, schools and forest-related economic development projects in rural areas. The Senate voted 82-16 in favor of his amendment.

But at least one leading Democratic senator Daniel Akaka of Hawaii and two leading federal unions oppose Baucus' plan, saying changes to federal retirements should not be used to pay for unrelated projects.

"As a former educator I highly value school funding, but I must stand up against Congress' new habit of treating federal employees like a piggy bank," Akaka said. "If we are going to ask middle-class workers to offset the costs of legislation, it should only be as part of a broad agreement involving shared sacrifice by millionaires and billionaires, or to fund other pressing priorities supporting federal employees."

The American Federation of Government Employees and the National Treasury Employees Union oppose the amendment for the same reason.

NTEU President Colleen Kelley said her union supports the phased retirement program, but objects to the way it is being used.

"Any savings generated by [the phased retirement] plan … should be used by the committee of jurisdiction for federal employee-related issues," Kelley said. "In this instance, that would be the Senate Homeland Security and Governmental Affairs Committee."

"That money [saved through phased retirements] could have provided a safeguard against cutting pensions for federal employees," AFGE spokesman Tim Kauffman said. "We know more is coming down the pike. They could have used that instead of increasing retirement contributions, or going to the high-five [a reduced system for setting federal pensions] or cutting the [Federal Employees Retirement System Social Security] supplement. Now that the Senate has voted for this, there's no leverage to say, ‘Why don't we do this versus that.' "

The Senate's $465 million in estimated savings is much less than the $720 million the White House estimated when it proposed phased retirement as part of its 2013 budget last month. The Senate Finance Committee said its proposal is identical to the White House's proposal, but that its savings estimate was based on more conservative numbers from the Congressional Budget Office, and not the Office of Management and Budget.

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