Fed pension hike advances in House
This story has been updated.
Federal workers would have to contribute more to their government pensions under a bill the House Oversight and Government Reform Committee approved Thursday.
The legislation requires current federal employees to pay 5 percent more toward their retirement over the next five years, beginning in 2013. Members of Congress would have to contribute an additional 8.5 percent to their defined benefit plan during the same time period.
The committee backed the bill in a voice vote in the morning and then held a recorded vote in the afternoon. Lawmakers advanced the legislation in a 19-15 vote, over Democratic objections. It now heads to the House Budget Committee for consideration.
The increase for current workers would be phased in incrementally: Feds would pay an extra 1.5 percent in 2013; 0.5 percent more in 2014; and an additional 1 percent in 2015, 2016 and 2017. Federal employees currently contribute 0.8 percent of each paycheck to their pensions. That figure does not include their contributions to Social Security or to their Thrift Savings Plan accounts. The bill would result in employees under the Federal Employees Retirement System paying 5.8 percent of their salaries by 2017, plus contributions to Social Security and TSP accounts. Government workers enrolled in the Civil Service Retirement System -- who currently contribute 7 percent of each paycheck to their defined benefit plan -- would give 12 percent by 2017 under the legislation.
The bill would require employees hired after 2012 to begin contributing the additional 5 percent immediately.
Committee Chairman Darrell Issa, R-Calif., emphasized that the increase in employee contributions are driven by a need to reduce the deficit. The House-passed budget resolution called on the Oversight and Government Reform committee to come up with $79 billion in savings during the next decade. “Let’s make it perfectly clear, reductions in federal pensions are not intended to reflect in any way on the hardworking men and women in the federal workforce.”
Committee Democrats opposed the legislation. Rep. Gerry Connolly, D-Va., called the bill “odious” to the federal workforce. Ranking Member Elijah Cummings, D-Md., said it was “disappointing” that the panel returned to federal pay and benefits to cut spending.
The bill also eliminates a current provision in the law that supplements the retirement benefits of feds not subject to mandatory retirement who are covered under the Federal Employees Retirement System and retire before age 62, or the age at which their Social Security benefits can kick in. It would apply to those employees hired after Dec. 31, 2012.
Unions criticized the latest attempt to reduce federal employees’ pay and benefits. “I can assure you that if Congress continues to cut federal employees’ pay and benefits, this country will be unable to attract or retain talented people in the federal government,” National Treasury Employees Union President Colleen Kelley wrote in an April 25 letter to committee members. New federal hires already have to pay 2.3 percent more toward their government pensions under a deal Congress approved in February to extend the payroll tax holiday.
“The majority’s recommendation to drastically increase the amount that employees contribute to their defined benefit will almost certainly require them to reduce their ability to save through the TSP,” Beth Moten, legislative and political director at the American Federation of Government Employees, wrote in an April 25 letter to Issa and Cummings
Lawmakers on Thursday also approved a bipartisan amendment to the legislation that would allow retiring federal and U.S. Postal Service employees to deposit lump sums from their unused annual leave into their Thrift Savings Plan accounts to boost their savings. The committee has supported the measure, offered by Rep. Jason Chaffetz, R-Utah, and Stephen Lynch, D-Mass., in previous bills.