Federal employees will not have to contribute more to their pension funds in order to pay for highway projects or to extend the student loan interest rate for another year, according to Federal News Radio.
An earlier proposal to increase federal workers’ pension contribution by 1.2 percent over three years was included in a Republican House bill to pay for the extension of the current Stafford loan interest rate.
The latest version of the legislation -- agreed to by House and Senate conferees -- drops the pension contribution hike and would finalize a popular plan to allow eligible federal employees to partially retire while collecting prorated pension payments. These partial retirees will be required to spend at least 20 percent of their part-time employment on mentoring new workers.
The latest version of the legislation would pay for the extension of the student loan interest rate -- set to double on July 1 to 6.8 percent -- by requiring companies to set aside less money for pensions, thereby reducing tax-exempt revenue. It also would increase fees companies pay for the government to insure pension plans and limit the number of years Stafford loans would cover undergraduate education to six.
An earlier version of the bill would have calculated pension payments for federal workers from their highest five years of salary, instead of the highest three. This provision also was struck from the new agreement.
Congress lumped the transportation and student loan bills into one to ensure both elements were signed into law prior to the expiration of existing legislation.