A group of 26 senators called for the Office of Personnel Management to drop its pursuit of retirement benefit cuts for current and future federal retirees in a June 13 letter to OPM Director Jeff Pon.
“Together, the proposals you have made would cut $143 billion over 10 years from federal employee retirement programs, while offering nothing to employees in their place. We fear that these cuts are motivated by an ongoing effort to balance the budget on the backs of federal workers rather than an effort to provide a comprehensive approach to modernizing federal employee compensation,” the senators wrote.
OPM sent a letter to House Speaker Paul Ryan in early May, requesting that Congress pass legislation to eliminate annuity supplements, alter the calculation of annuities, increase federal employee retirement contributions and reduce or eliminate cost-of-living adjustments for federal retirees.
Pon defended the proposals as a means of bringing the federal retirement system more in line with the private sector while making it easier for employees to transition between federal and private sector employment.
“The President’s FY19 Budget justification for these proposals states that federal employees are compensated with combined pay and benefits higher than the private sector, relying solely on an April 2017 Congressional Budget Office report,” the senators wrote.
“This is a gross oversimplification of the findings and implications of that report. The report concludes that total compensation costs among workers with a professional degree or doctorate were actually 18 percent lower for federal employees than for similar private-sector employees. To further increase this differential would hamper our ability to hire experts in mission-critical areas. Furthermore, CBO states that the scope of their analysis is limited to selected benefits, and does not include, for example, the stock options that some private sector firms provide to their employees.”
Sens. Mark Warner and Tim Kaine of Virginia — the state home to nearly eight percent of all federal employees, according to 2017 OPM data — led the signatures on the letter.
The senators also said they were concerned that a reduction in federal retirement benefits without improvement in benefits elsewhere would deter young, skilled workers from government service.
“As you know, just 17 percent of federal workers are under 35 years old, and nearly one-third of permanent career federal employees will be eligible to retire next year. At the same time, the 2017 Federal Employee Viewpoint Survey, a government wide survey conducted by the Office of Personnel Management, found that only 42 percent of federal employees feel they can recruit people with the right skills,” the senators wrote.
“In the face of a potential brain drain from our federal agencies, and in a time where top talent has a wide variety of options for global employment, we feel strongly that the impact of across-the-board pay freezes and continued threats to earned benefits will be devastating to retention and recruitment.”