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House panel approves higher pension contributions for feds

Apr. 26, 2012 - 06:00AM   |  
By STEPHEN LOSEY   |   Comments
Rep. Darrell Issa, R-Calif., chairs the House Oversight and Government Reform Committee.
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 approved a budget plan that would raise federal employees' retirement contributions by five percentage points over five years. The increase would effectively mean a 5 percent pay cut for federal employees.

Federal Employees Retirement System employees' contributions would increase from 0.8 percent to 5.8 percent by 2017, and Civil Service Retirement System employees' contributions would increase from 7 percent to 12 percent over the same period.

The bill would increase pension contributions by 1.5 percentage points in 2013, 0.5 percentage points in 2014, and one percentage point each year from 2015 to 2017.

Newly hired federal employees beginning in 2013 with less than five years of previous federal service would immediately have to cover 5.8 percent of their FERS pensions, with no phase-in.

Lawmakers and their staffs under CSRS, and FERS lawmakers, 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.

For new employees hired after Dec. 31, the measure would eliminate the FERS Social Security supplement that is available to employees who voluntarily retire before reaching age 62.

The committee also agreed Thursday to a bipartisan amendment, from Rep. Jason Chaffetz, R-Utah, and Rep. Stephen Lynch, D-Mass., to allow federal employees to apply the value of their unused annual or vacation leave toward their Thrift Savings Plan accounts.

The plan to hike federal employees' pension contributions, which the committee said would save $82 billion over a decade, was denounced by Democratic lawmakers and federal employee groups, who said federal employees have already sacrificed.

"These retirement cuts are absolutely unconscionable," said National Federation of Federal Employees National President Bill Dougan. "At a time when many federal workers and their families are struggling through the great recession, some in Congress are proposing to increase six-fold the amount they pay toward their retirement. Burdened with two years of frozen pay, increased pension contributions for new hires, and crushing cuts to agency budgets, federal employees are reaching the end of their rope."

"Republicans' priorities are crystal clear, and investing in a top-notch workforce competitive with the private sector is not among them," House Minority Whip Steny Hoyer, D-Md., said in a http://www.federaltimes.com/article/20120425/ADOP06/204250307/1037/ADOP">Federal Times opinion piece.

The changes were required by the 2013 budget proposed by Rep. Paul Ryan, R-Wis., which the House passed on a largely party-line vote March 29. That budget ordered the House Oversight Committee to find at least $79 billion in savings over a decade.

The Ryan budget and the pension contribution hikes that are part of it is highly unlikely to pass the Democratic-controlled Senate.

The bill "will die a deserved death when it gets to the Senate," said Rep. Gerry Connolly, D-Va. "It is wrong."

But even if the Ryan budget does die in the Senate, the contribution increases could return perhaps as part of a bill that Democrats cannot reject.

"I think it's likely that it may well come back," Hoyer said in an interview with Federal Times.

It has happened before. In February, for example, lawmakers struck a deal to pay for a payroll tax holiday extension by raising the pension contributions for newly hired federal employees to 3.1 percent.

Under the measure approved Thursday, those employees would see their pension contributions climb to 5.8 percent immediately.

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