Modified package in House establishment alters pension reductions
In a recent development, House Republicans have unveiled changes to proposed cuts to federal workers' retirement benefits. The latest draft of the bill aims to make the cuts more politically acceptable following bipartisan backlash.
One of the key changes is the requirement for federal employees hired before 2014 to pay 4.4% of their basic pay toward the Federal Employees Retirement System (FERS). Previously, these employees were exempt from such contributions.
However, the draft has also removed the plan to increase payments from federal employees hired before 2014 towards their retirement benefits. This means that if a federal employee is vested, every paycheck they paid into the system before the changes will be affected by the reductions in their retirement benefits.
The change in federal retirees' annuity calculations from the high-3 to high-5 average salary model has been delayed by one year, to January 1, 2028. This means that annuities will become less valuable by being based on the average highest five years of an employee's salary instead of the current high-3 model.
The FERS supplement elimination and the High-5 proposal still break promises made to federal retirees and apply benefit reductions based on employees' past work history. The FERS supplement would be eliminated for people who retire before Social Security kicks in at age 62, and the FERS supplement exemption for federal employees who are required to retire early, such as air traffic controllers and federal law enforcement personnel, has been expanded to cover all such employees.
The proposals have provoked outcry among federal workers who agreed to participate in the deferred resignation program, Voluntary Early Retirement Authority, or a combination of the two. Some House Republicans, including Rep. Mike Turner, have stated they will not support the measure due to provisions that reduce the retirement benefits of federal workers who have already earned and are vested in their pension.
The National Active and Retired Federal Employees Association welcomes the changes in the latest draft, but believes more needs to be done to protect employees who have already earned their retirement benefits. The association has also expressed concerns about the impact of the changes on federal law enforcement officers, as the proposals have also received criticism from groups representing these officers.
Under the new proposals, new federal employees would be required to choose between serving at-will-with no civil service protections and paying nearly 10% of their salary toward their pension each paycheck.
The future of these proposals remains uncertain, as the bill is still under review and subject to potential changes. The search results do not contain information on which party recently proposed these changes or about such an event on Monday involving bipartisan criticism.
