Rep. Darrell Issa, R-Calif., chairs the House Oversight and Government Reform Committee. (Chip Somodevilla / Getty Images)
The House Oversight and Government Reform Committee on Thursday will consider a budget plan that would raise employees' pension contributions, which would result in an effective 5 percent pay cut.
The committee plans to vote on a fiscal 2013 budget reconciliation bill that would require both Federal Employees Retirement System (FERS) and Civil Service Retirement System (CSRS) employees to pay five percentage points more toward their pensions over five years. This would mean that by 2017, FERS employees would contribute 5.8 percent of each paycheck to their pensions — up from 0.8 percent now — and CSRS employees would contribute 12 percent of each paycheck to their pensions, which is up from 7 percent now.
The bill would increase pension contributions by 1.5 percentage points in 2013, 0.5 percentage points in 2014, and 1 percentage point each year from 2015 to 2017.
Newly-hired federal employees beginning in 2013 with less than five years of previous service would immediately have to cover 5.8 percent of their FERS pensions, with no phase-in.
Lawmakers and their staffs under CSRS would see their contributions go up even more, by 8.5 percentage points over five years. FERS congressional staffers' contributions would increase 7.5 percentage points over five years.
The bill would also eliminate, for new employees hired beginning in 2013, the FERS Social Security supplement for employees who voluntarily retire before reaching age 62.
The committee expects the changes would save $82 billion over 10 years.