Lawmakers spar over proposed federal retirement cuts

Wednesday - 1/25/2012, 5:06pm EST

Emily Kopp, reporter, Federal News Radio

Download mp3

A Republican effort to cut federal employees' retirement benefits failed last year. But some of those measures have been revived by lawmakers eager to prove Congress is frugal with public funds.

Rep. Dennis Ross (R-Fla.) has introduced a new bill that would require federal workers, including lawmakers, to contribute 1.5 percent more of their salaries towards retirement over three years. It would also end the supplemental payment to early retirees; increase the employee retirement contribution for new hires by 3.2 percent; change the multiplier used in the pension formula; and use a five-year average salary base to calculate annuities.

Ross announced the bill at the beginning of a hearing on proposals to reign in federal employees' and lawmakers' annuities. The hearing was held by the House Oversight and Government Reform Subcommittee on Federal Workforce, U.S. Postal Service and Labor Policy, which Ross chairs.

"Today's hearing is not about beating up on federal employees," he said. But, he added, taxpayers are "outraged by the pension benefits guaranteed to a federal workforce" as pensions become rarer in the private sector.

Feds have already sacrificed

Ross' bill has several measures in common with a White House plan. It would also make federal employees contribute more — 1.2 percent over three years — to their pensions and end the annuity supplement, albeit only for new employees who aren't subject to mandatory retirement.

Those measures would save $21 billion over 10 years, Office of Personnel Management Chief Operating Officer Chuck Grimes told the committee.

But politicians should keep their hands off federal employees' retirement plans, said National Active and Retired Federal Employees Association Director of Retirement Benefit Services David Snell.

"Federal workers did not enter public service to become rich, but they do face the same economic challenges as everyone else, including the need to prepare for retirement," he said.

Although federal employees are paid less than their private-sector counterparts, he said, "a modest retirement package helps to make up for part of that lower pay for helping to provide reasonable income security in their later years."

Lawmakers target their pensions too

Several freshmen Republican lawmakers have sponsored bills to limit the congressional pension plan.

Restricting Congress' retirement benefits would show they have "skin in the game," said Rep. Robert Dold (R-Ill). He has sponsored a bill that would expand the list of crimes for which a lawmaker could lose their pension benefits.

Rep. Mike Coffman (R-Colo.) echoed his words. In his written testimony, he noted that Congress had an 11 percent approval rating in a December Gallup poll.

"Congress has to lead by example," he said. His bill would end lawmakers' pension plan.

Rep. Tim Griffin (R-Ark.), who has sponsored similar legislation, called it the "gateway, or necessary starting point, for reforming the Federal Employees Retirement System."

The congressional retirement program is more generous than the one offered to most federal employees.

A recent Bloomberg News analysis showed that several prominent former lawmakers, including presidential candidate Newt Gingrich and others, who are now lobbyists, are drawing on six-figure pensions.

"Members of Congress should have the same retirement benefits as other federal employees do," Snell said. "They should be no higher or lower than the others."

House Democrats, however, have called for no additional cuts to federal employees' pay and benefits.

RELATED STORIES:

Public-private pay gap increases to 26 percent

NARFE concerned with provisions in House payroll tax cut bill

Federal pay and benefits caught (again) in payroll tax, budget talks

Payroll tax negotiations reopen: Are feds' pay and benefits safe?