Lawmakers insert federal pension provisions in highway bill

Pablo Martinez Monsivais/AP

Legislative provisions to increase the amount government employees contribute to their pensions have been tucked into a major House bill, indicating the Republican leadership’s determination to change -- one way or another -- the federal retirement system in an effort to cut overall spending.

The 2012 American Energy and Infrastructure Jobs Act, also known as the highway bill, contains provisions that would require federal employees and members of Congress to pay a total of 1.5 percent more toward their pensions over three years beginning in 2013. It incorporates, into a massive transportation bill (H.R. 7), provisions in stand-alone legislation (H.R. 3813) the House Oversight and Government Reform Committee approved last night to modify the federal pension system.

National Treasury Employees President Colleen Kelley said in a statement Wednesday that she is “appalled that the House Republican leadership would break pension promises made to federal workers years ago to fund a transportation bill.”

Lawmakers also would have to chip in more for their pensions under H.R. 7 and H.R. 3813.

Another measure included in both bills would place federal employees hired after Dec. 31, 2012, as well newly-elected lawmakers under a high-five average salary calculation for annuities rather than the current high-three average pay calculation. The current Federal Employees Retirement System-defined benefit pension is calculated by taking the retiree's three highest salaries and dividing it by years of service and a variable pension accrual rate. Existing Civil Service Retirement System and FERS employees still would operate under the high-three calculation.

In addition, federal and Postal Service employees will be able to deposit lump sums from their unused annual leave into their Thrift Savings Plan accounts to boost their savings, under H.R. 7 and H.R. 3813.

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