Rep. Edwards proposes restoring lower retirement contributions for feds

Friday - 8/1/2014, 3:34pm EDT

By Stephanie Wasko
Special to Federal News Radio

Rep. Donna Edwards (D-Md.) introduced a bill Thursday reducing the amount new federal employees would have to pay toward their government retirement funds.

The National Treasury Employees Union (NTEU), the largest independent federal union, as well as the National Active and Retired Federal Employees (NARFE) Association announced their support for the legislation, which would repeal the last two increases in retirement contributions.

"Let's stop unduly burdening our federal workers, and start asking wealthy corporations to pay their fair share," Edwards said in a press release.

Under the bill, all employees' pension contributions would revert back to the 0.8 percent that employees hired before 2013 are paying now. Edwards also wants to close corporate tax loopholes for companies that are incorporated overseas but managed and controlled in the United States, as a way to off-set the increased contributions by the government.

The Federal Employees Retirement System (FERS) covers most of the federal workforce and often is held out as a model pension program, according to NTEU. Currently, employees hired in 2013 pay 2.3 percent more than those hired before them, while new employees hired in 2014 pay 3.6 percent more than pre-2013 employees, according to NARFE's press release. NARFE said the increased contributions would result in $21 billion less in take-home pay for new employees over 10 years.

Colleen Kelley, president of NTEU, said even with increased retirement fund requirements from new hires, benefits for these employees remain the same. This makes the increased financial requirements "little more than a selective tax on federal employees," Kelley said.

The increases came at a fiscally challenging time for federal employees who were experiencing frozen salaries, sequestration and furloughs, said Joseph Beaudoin, president of NARFE.

"Federal employees have contributed more than $120 billion toward deficit reduction," he said, "and passage of this bill would be the first step toward reversing this trend and ensuring we can continue to recruit and retain the best and brightest into public service. Providing our public servants adequate compensation is about more than just fairness, it is about maintaining an efficient and effective federal government."

Stephanie Wasko is an intern with Federal News Radio.

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