A proposed increase in agency contributions to federal employees' retirement funds would act as a "silent RIF," squeezing agency budgets and forcing agencies to lay off employees, the president of the Federal Managers Association said this week.
In a letter to Senate Budget Committee Chairman Pete Domenici, R-N.M., and House Budget Committee Chairman John Kasich, R-Ohio, FMA President Michael Styles urged Congress to eliminate a provision in the fiscal 1998 budget agreement that would increase agency contributions to the Civil Service Retirement and Disability Fund by 1.51 percent for 1998-2002 without giving agencies funds to cover the additional costs.
Employees would also be required to contribute more from their paychecks into the retirement fund. Employees in either the Civil Service Retirement System or the Federal Employees Retirement System would pay a total of .5 percent more of their income by 2001.
Styles said the increase "is not necessary to insure the health of the retirement fund and will force agencies to resort to layoffs."
"Leveling a 1.5 percent unfunded mandate on agency budgets and singling out federal workers for a payroll tax increase is counterproductive to making the government more efficient," Styles wrote.
Last week American Federation of Government Employees President John Sturdivant derided the budget agreement worked out by the White House and Congress because federal employees would pay an estimated 20 percent more in health care premiums, according to the Office of Personnel Management and the Congressional Research Service.
Sturdivant said many federal employees cannot afford health care coverage now.
"It would be unconscionable for the administration to insist on further painful cutbacks for government employees in the form of dramatically increased [health benefits] premiums," Sturdivant said.