House committee OKs legislation to increase feds' pension contributions

Thursday - 4/26/2012, 10:24am EDT

This story was updated at 3:00 p.m. April 26 to include the committee vote.

The House Oversight and Government Reform Committee approved legislation Thursday that would increase federal employees' contributions to their pensions by 5 percent over five years.

The 19-15 roll call vote sends the legislation to the House Budget Committee as a recommended cost-saving.

Currently, feds in the Federal Employment Retirement system pay 0.8 percent of their salaries toward pensions, while the agency contributes 11.7 percent toward pensions. FERS employees also contribute 6.2 percent toward Social Security. Feds in the Civil Service Retirement System pay 7 percent toward pensions.

The retirement contribution changes proposed in the legislation would be phased in over a few years:

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

Measure includes TSP amendments, cuts to lawmaker retirements

The legislation also eliminates the FERS supplement for new hires. The supplement is paid in addition to annuity to feds who retire before they are 62 and are eligible for Social Security benefits.

The committee also approved an amendment, introduced by Reps. Stephen Lynch (D-Mass) and Jason Chaffetz (R-Utah), that would allow feds to put their unused leave toward their Thrift Savings Plan. The proposal has previously been attached to other House legislation.

"Unlike the underlying bill, this serves and promotes the retirement security of our federal workers," Lynch said.

Other proposed retirement changes affect lawmakers and their staff:

  • Members of Congress and their staff in CSRS would pay an additional 8.5 percent over five years.
  • Members of Congress in FERS would pay an additional 8.5 percent of salary over five years.
  • Congressional staff in FERS would pay an additional 7.5 percent of salary over five years.

Lawmakers, unions assail 'unfair' proposal

In remarks during the mark-up, Rep. Darrell Issa (R-Calif.), committee chairman, said the proposals should not be a reflection of the "hardworking men and women of the federal workforce." He said the budgetary environment made it necessary to "reduce the budget by a sufficient amount, not to have to limit ourselves to a sequestration, our national defense and other essential services."

But in an interview on In Depth with Francis Rose, Rep. Steny Hoyer (D-Md.), the House Democratic Whip, said the proposal is, essentially, a five percent cut in federal employee pay.

"My concern is that they are the only workers in America that are being looked to, to make a contribution," Hoyer added. "That's making the federal service less competitive, reducing our ability to recruit and retain the quality people that we need."

Ranking member Rep. Elijah Cummings (D-Md.) called the proposals "unfair and uncompassionate." He said federal workers had sacrificed enough through a two-year pay freeze.

"I will not be associated with a bill that takes even more money out of the pockets from those who protect our borders, support our troops, care for our wounded veterans, ensure the safety of our food and water, and provide services to millions of Americans," Cummings said.

The American Federation of Government Employees said the pension contribution increases would force feds to reduce what they saved in their TSP, and impact their ability to receive the agency match.

"Employees will pay far more now and are virtually guaranteed to receive much less when they retire," wrote Beth Moten, AFGE's legislative and poltiical director, in a letter to Issa.

The budget plan passed by the House also called for extending the federal pay freeze through 2015 and cutting the federal workforce by 10 percent through attrition.

"If the federal government's out of control spending is not curbed, these accounts will prove just how empty they really are," Issa said in a statement. "We need to secure these earned employee benefits and reduce the deficit at the same time."

Still, Hoyer said he predicted "significant opposition" from the Senate toward the retirement provisions and many other aspects of the House's budget plan.

"There's a good likelihood this won't make it all the way through the process," he added.

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