House Panel Approves Increase In Federal Employees' Pension Payments

April 27, 2012

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A House committee approved a GOP proposal on April 26 that would increase federal employees' contributions to their pensions by 5 percent over five years, beginning in 2013. The vote was along party lines, with Republicans voting in favor of the measure and Democrats voting against it, 19-15. The legislation will be sent to the House Budget Committee as a recommendation for cost-savings.

Currently, postal and federal workers in the Federal Employment Retirement System (FERS) pay 0.8 percent of their salaries toward pensions and the USPS or government agency contributes 11.7 percent. (FERS employees also contribute 6.2 percent toward Social Security.) Postal and federal employees in the Civil Service Retirement System (CSRS) pay 7 percent toward their pensions.

If the bill is enacted into law, the changes would be phased in over a few years:

  • Employees would pay 1.5 percent more in 2013.
  • Employees would pay 0.5 percent more in 2014.
  • Employees would pay 1 percent more in each of the three years from 2015 to 2017.

New employees who begin federal careers in 2013 with less than five years of prior service would pay 5.8 percent of their pay toward their pensions right away.

The legislation also would eliminate the FERS supplement for new employees. The supplement is paid in addition to annuities to federal employees who retire before they turn 62 and become eligible for Social Security benefits.

Rep. Elijah Cummings (D-MD), the ranking Democrat on the committee, denounced the measure as an attack on federal workers. “And now, we are back again because House Republicans want to squeeze even more out of these middle-class workers... At the same time, House Republicans are adamant in their refusal to ask the wealthiest Americans to contribute one additional penny towards improving our government’s fiscal condition.”

The committee also approved an amendment, introduced by Rep. Jason Chaffetz (R-UT) and Rep. Stephen Lynch (D-MA) that would allow federal employees to apply unused leave toward their Thrift Savings Plan (TSP) accounts.

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