Congress Continues Eyeing Pension Changes for Federal Employees

Congress has passed a series of benefit changes for federal workers in recent years, most notably boosting employee contributions for new hires from 0.8 percent to 4.4 percent.

But more changes could be coming, including a change in the pension benefit formula that would likely trim benefits for many workers.

From the Federal Times:

As Congress wrestles with major legislation over the summer and into the fall, members of Congress and federal employee groups are warning that federal pension contribution increases and retirement cuts are a real danger.

Rep. Bruce Westerman, R-Ark., […] introduced legislation in March that would change the calculation for federal employee benefits from the average of their highest three years of pay to the average of their highest five years of pay.

The bill would go into effect Jan. 1, 2017 and would save $3.1 billion over a 10 year period, according to calculations by the Congressional Budget Office.

Rep. Gerry Connolly, D-Va., the ranking member of the House subcommittee with jurisdiction over the federal workforce, said it is likely that certain members of congress will continue to advocate for retirement benefit cuts.

Rep. Don Beyer, D-Va., said Congress cannot continue to treat federal employees as a piggy bank to balance the budget – and that includes unneeded increases in retirement contributions.

“I will continue to work with my colleagues to reward our federal employees for the jobs they do to keep America running,” Beyer said.

The support for further benefit cuts falls roughly along party lines; Republicans see opportunity for savings, while Democrats oppose further changes.

Photo by  Bob Jagendorf via Flickr CC License