OPM Legislation Proposal Cuts Retirement Benefits for Feds

Director of the U.S. Office of Personnel Management, Jeff Pon, reportedly sent a letter yesterday to House Speaker Paul Ryan in which Pon requests “a number of legislative changes that would cut retirement benefits for federal workers,” according to Government Executive.

Erich Wagner summarizes some of the key points covered by the proposal, which he calls a “laundry list of previously proposed cuts to federal employee retirement programs,” including “plans to eliminate Federal Employees’ Retirement System supplements for federal employees who retire before Social Security kicks in at age 62, going forward,” changes to “the basis of a retiree’s defined benefit annuity payments from their highest three years of salary to their highest five years,” and an increase in the “amount federal employees contribute to FERS by 1 percentage point per year until they reach an overall contribution level of 7.25 percent, matching the government’s contribution.”

According to Wagner, OPM is also proposing “the elimination of cost-of-living adjustments for FERS retirees—both current and future—and the reduction of Civil Service Retirement System COLAs by 0.5 percent,” as well as the elimination of “a provision of the law that requires FERS disability annuities to be reduced by the recipient’s ‘assumed disability insurance benefit’ through Social Security, instead basing the reduction on the individual’s actual Social Security benefits.”

Federal employee groups were quick and decisive in their criticism, with the American Federation of Government Employees calling the proposal a “war on working people.”

Many of the proposals individual components faced stiff opposition when previously introduced, so the legislative prospects of the package remains uncertain.

 

 

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