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Potential Benefits Cuts: Where Things Stand

Flickr user Ian Stannard

Earlier this year, I wrote about the proposed cuts to federal retirement benefits included in President Trump’s budget. Here, to recap, is what the budget proposal included:

  • Cost-of-living allowances for current and future FERS retirees would be eliminated altogether.
  • COLAs for CSRS retirees would be reduced by 0.5 percent each year from what they would have been otherwise.
  • FERS employees would see employee contributions to their annuities increased by 1 percent each year for the next six years, without any corresponding benefit increase.
  • The FERS annuity supplement would be eliminated for new retirees starting in 2018. That change alone would save the federal government $5 billion by 2026.
  • Federal pensions would be based on the average of the highest five years of salary instead of the highest three. According to Congressional Budget Office estimates, that change would save the federal government $2 billion from 2018 to 2026.

These would clearly be dramatic changes to the federal retirement system, and they have caused alarm among some federal employees. But they have to be approved by Congress, and many lawmakers share employees’ concerns about their impact.

So where do things stand now? To give you an idea, here are some Government Executive headlines that have appeared since my earlier column was published on June 1:

In short, there hasn’t been a tremendous amount of momentum yet in the direction of trimming retirement benefits as a cost-savings measure. But Congress has put off its real budget work until this  fall, with a looming deadline of early December before a continuing resolution runs out. So stay tuned.

Photo: Flickr user Ian Stannard

Tammy Flanagan has spent 30 years helping federal employees take charge of their retirement by understanding their benefits. She runs her own consulting business at and provides individual counseling as well as online training for the National Active and Retired Federal Employees Association, Plan Your Federal Retirement and the Federal Long Term Care insurance Program. She also serves as the senior benefits director for the National Institute of Transition Planning Inc., which conducts federal retirement planning workshops and seminars.

For more retirement planning help, tune in to "For Your Benefit," presented by the National Institute of Transition Planning Inc. live on Federal News Radio on Mondays at 10 a.m. ET on WFED AM 1500 in the Washington-metro area. Archived shows are available on

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