New Legislation Seeks to Roll Back Pension Contributions For Federal Workers

A federal lawmaker, Rep. Donna Edwards, re-introduced a bill on Thursday that would lower the amount that federal workers must pay towards their pension each paycheck.

In 2014, newly hired federal workers saw their pension contribution rates jump percent higher than their predecessors.

Federal employees hired after January 1, 2014 must contribute 4.4 percent of their paychecks to the Federal Employees Retirement System (FERS).

Workers hired in 2013 only pay 3.1 percent, while workers hired before 2013 only pay 0.8 percent.

The bill would roll back contribution rates for those hired in 2013 or later.

The bill is supported and sponsored by a cohort of lawmakers: Reps. Matt Cartwright, D-PA; Gerald E. Connolly, D-VA; Elijah E. Cummings, D-MD; Keith Ellison, D-MN; Marcy Kaptur, D-OH; Stephen F. Lynch, D-MA; Betty McCollum, D-MN; Grace F. Napolitano, D-CA; Eleanor Holmes Norton, D-DC; and Charles Rangel, D-NY.

Worker advocacy groups have called for a roll-back, saying the higher rates put too much strain on workers. From the Federal Times:

For example, A Border Patrol agent hired today at a starting salary of about $48,000 a year will pay $1,700 more for his or her pension each year than someone in the exact same job and location hired in 2012 or before, according to the American Federation of Government Employees.

“While these higher retirement contributions were sold as a way to fund temporary increases in unemployment insurance and to pay for the stimulus that got the nation out of the great recession, Congress made them permanent,” Cox said, AFGE president J. David Cox said in a statement. “These higher retirement contributions make it more challenging for agencies to recruit and retain new employees,” he added.

Federal employees have already contributed $120 billion toward deficit reduction efforts and the bill would help roll back the trend of cutting federal worker salaries and benefits, said Richard Thissen, the president of the National Active and Retired Federal Employees association.

Overall the pension contribution increases will amount to a $21 billion loss in take-home pay for federal employees over a 10-year-period, Beaudoin said.

Read the text of the original bill here. A full text of the re-introduced bill is not yet available online.

Photo by  Bob Jagendorf via FLickr CC License