House committee takes up bill cutting federal retirement benefits

Monday - 2/6/2012, 9:20pm EST

Bill Dougan, president of the National Federation of Federal Employees discussed the proposal on In Depth with Francis Rose

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By Emily Kopp
and Jack Moore

Federal unions and some lawmakers have lambasted a proposed bill that would make changes to federal retirement benefits. The "Securing Annuities for Federal Employees Act of 2012" is set to go before the House Committee on Oversight and Government Reform Tuesday for a markup session, in which lawmakers will be able to introduce amendments.

In its current form, the bill would require federal workers to contribute 1.5 percent more of their salaries toward retirement over three years as well as end a supplemental payment for early retirees under the Federal Employee Retirement System. New hires would see their retirement contribution rates increase by 3.2 percent, and annuities for all federal employees would be calculated based on the highest five-year average salary.

A broken promise?

In a conference call organized by the National Treasury Employees Union, Sharon Phillips, a 52-year-old IRS attorney, said she was counting on the FERS supplement, which the bill would eliminate, to be able to retire early to care for her ill husband.

"Affordable retirement, assisted by the FERS supplement, would enable me to spend as much quality time with him as possible," she said. "Without that FERS supplement, however, affordable retirement as I long envisioned it and as it has become increasingly important to me because of my husband's poor health, simply would be out of reach."

NTEU has argued many federal employees are likely in situations similar to Phillips'. The union's president, Colleen Kelley, said publicizing their cases will help stir up opposition to the bill, which she said amounts to a broken promise.

"These employees made career decisions to have a career and give a career to the federal government," Kelley said. "They've made life plans based on these promises. And our expectation is that those commitments and promises will be kept by this Congress and not blatantly changed by them."

Under the bill, she contends, a federal worker who makes $50,000 a year and plans to qualify for the FERS supplement could lose as much as $62,000 in benefits.

A question of fairness?

But Rep. Dennis Ross (R-Fla.), the chairman of the subcommittee on the federal workforce and the bill's sponsor, has long defended the legislation on the grounds of fairness. For one, the law would also apply to lawmakers, themselves. And the public is increasingly fed up with Washington, he suggested.

"They are tired of the perks and hypocrisy they witness in their Congress and are rightfully outraged by the pension benefits guaranteed to a federal workforce that has grown too large, paid for by an ever-increasing tax burden on the hard-working American taxpayer," Ross said in remarks at a combative subcommittee hearing last month.

Rep. Gerry Connolly (D-Va.), suggested the cuts to benefits as well as an overall atmosphere of hostility toward federal employees could harm agency recruitment.

"Where are we going to get those people if we continue to denigrate the value of federal employment and to disparage the federal employees who, in fact, have responded to that call over the years?" Connolly said during the conference call. "I just think this is a very destructive process."

For his part, Connolly said he expects the committee to approve the bill, along party lines, but that the Democratic-controlled Senate will likely not take it up.

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