House Votes to Increase Feds’ Pension Contributions

By Kellie Lunney

April 10, 2014

The House on Thursday passed a fiscal 2015 budget resolution that would require federal employees to contribute more to their pensions and shrink the government workforce.

The chamber approved the Republican budget shepherded by House Budget Committee Chairman Paul Ryan of Wisconsin in a 219-205 vote. The concurrent resolution is unlikely to go anywhere since the Democrats control the Senate, and the legislation does not carry the force of law. It does, however, provide a framework for the party’s fiscal vision and possible future bills.

Some lawmakers, including Democratic Rep. Chris Van Hollen of Maryland and Republican Rep. Rob Woodall of Georgia, offered unsuccessful alternatives to the Ryan proposal. Van Hollen is the ranking member of the Budget Committee, and Woodall is a member of the Republican Study Committee, a conservative caucus in the House, of which Ryan is also a member.

The Ryan budget blueprint proposes increasing the amount feds contribute to their pensions and eliminating a special retirement supplement for certain employees who retire before the age of 62. The GOP proposal would require federal employees, lawmakers and congressional staff to contribute half to their pensions, with the government contributing the other 50 percent. Currently, the government contributes more than 50 percent to the pensions of employees enrolled in the Federal Employees Retirement System – which is most of the federal workforce.

Under the Ryan proposal, FERS enrollees would contribute 6.35 percent of their paycheck to their defined benefit. Right now there is a three-tiered contribution system under FERS: Federal employees hired before 2012 contribute 0.8 percent of each pay check to their pension; those hired in 2013 contribute 3.1 percent; and those hired in 2014 contribute 4.4 percent.

The budget proposal also would get rid of the FERS Annuity Supplement, which benefits those government workers who retire before the age of 62 and who are not eligible for mandatory retirement. The supplement is intended to bridge the time between when they retire and when they receive Social Security benefits. The actual language in the document calls for “reform” to the special retirement benefit but Ryan has suggested eliminating it before. President Obama also has said he supports doing away with the FERS Annuity Supplement.

The plan would eliminate the student loan repayment benefit for federal workers as well. All of the provisions affecting government employees have been floated before.

Federal employee unions and other advocates for government workers and retirees unsurprisingly have blasted the federal pension-related proposals. “This budget piles even more burdens on the federal workforce. Employees are already juggling higher workloads with fewer resources and shrinking compensation,” said Colleen M. Kelley, president of the National Treasury Employees Union. “Congress needs to reject this budget, restore desperately-needed funding to federal agencies and stop the attacks on federal employees.” National Active and Retired Federal Employees Association President Joseph A. Beaudoin said the budget resolution “ignores the fact that federal employees already have contributed over $120 billion toward deficit reduction in recent years.”

J. David Cox Sr., president of the American Federation of Government Employees, went even further in his rhetoric. He called Ryan’s budget plan “a monster out to maul federal workers.”

The GOP budget proposal, dubbed “The Path to Prosperity: Fiscal Year 2015 Budget Resolution,” also recommends reducing the government workforce by 10 percent through attrition by replacing one employee for every three who leave government service. The proposal would exempt national security jobs. Where the framework seeks to reduce benefits to civilian federal employees, it pledges to provide military service members with the “best equipment, training and compensation for their continued success.”

It also carves out more money for veterans. “Veterans are, and will remain, the highest priority within this budget,” Ryan’s proposal stated. However the document expressed concern over the Veterans Affairs Department’s “elusive” success to date toward eliminating the disability claims backlog and veteran homelessness. On April 1, VA released a statement saying the department had reduced the disability claims backlog by 44 percent since March 2013.

The Republican plan overall seeks to balance the budget in a decade and reduce spending by $5.1 trillion during that time through reforming the tax code and entitlement programs, and streamlining other government programs. Other priorities include repealing the 2010 Affordable Health Care Act, and eliminating waste governmentwide. “Federal pay, benefits and mismanagement of properties are just a few areas where savings should be achieved,” the blueprint stated.

The plan listed maintaining “robust compensation” for military service members as a priority, but also noted the “explosive” growth in Defense Department personnel costs since 2001. “In future years, serious consideration must be given to the [Military Compensation and Retirement Modernization] Commission’s recommendations if this defense program is going to be realized within existing budgets,” the document stated. The Republican plan also said that any troop reductions “should be accompanied by reductions in the civilian and contractor workforce, which has ballooned in recent years and is now approximately the same size as the active-duty military, a ratio that is out of balance.”


By Kellie Lunney

April 10, 2014

http://www.govexec.com/pay-benefits/2014/04/house-votes-increase-feds-pension-contributions/82297/