Provisions in House Bill that would Increase Federal Employees’ Pension Contributions Heads to Floor this Week
Provisions that would increase the amount federal employees contribute to their pensions were included in a House bill, the 2012 American Energy and Infrastructure Act (H.R. 7), to fund highway programs. The bill will head to the floor this week.
The proposal, part of a stand-alone bill (H.R. 3813), would increase federal employees’ pension contributions by 1.5 percent over a three year period and would calculate new employees’ retirement benefits under a high-five average salary calculation for annuities. Currently, the Federal Employees Retirement System (FERS)-defined benefit pension is calculated by taking the three highest salaries and dividing it by years of employment and a variable pension accrual rate. Employees under the current Civil Service Retirement System (CSRS) and FERS systems would still qualify for the high-three calculation.
Members of Congress would also face an increase in pension contributions under the proposal. The proposal to increase pension contributions was created to alleviate the effects of a shortfall between federal gasoline tax revenues and highway and transit programs that would cost $260 billion over the next four and a half years.
Federal employees would be permitted to transfer unused annual leave to their Thrift Savings Plan (TSP) accounts, under the language of the bill, in a move that would help federal employees increase their savings.
National Treasury Employees Union President Colleen Kelley called the proposed pension contribution “disappointing.”
A letter from the Federal-Postal Coalition to House Members also denounced the proposal.
“We strongly oppose H.R. 3813…to offset a significant share of the costs of H.R. 7,” the letter said. “This is a blatant and cynical attempt to require public employees to bear the burden of financing public infrastructure, setting a dangerous precedent that civil servants should serve as the ‘pay for’ regardless of whether legislation impacts the federal workforce.”
Being a federal employee has its benefits, and GEICO is making it that much easier to love being a federal employee by bringing feds discounted Nationals tickets and the 2012 Funniest Fed Competition.
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With all the talk on the Hill and at the Office of Personnel Management on federal workers’ insurance and retirement benefits options, it could be hard to understand how the different initiatives or legislative proposals will affect federal employees.