What Congressional Gridlock Means for Federal Pensions

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Gridlock has become the new norm in Congress. The last two Congressional sessions (112th and 113th) were arguably the two least-productive sessions in the history of the country.

Republicans now control both chambers, but that doesn’t mean the gridlock will end.

In fact, some observers say that in 2015, the trickle of meaningful bills coming out of either Congressional chamber could slow even further.

That could be good news for federal workers.

Why?

Because trimming federal retirement benefits is a popular idea among a group of lawmakers, and gridlock could stave off those cuts.

Federal News Radio explains:

In 2014, the to-do-list of many pols included plans to charge workers more, via payroll deduction, for their CSRS and FERS benefits. It could have resulted in a pay cut of 2, 3 or even 4 percent.

Also on the list was a big budget saver — a plan to trim future cost-of-living adjustments for current and future retirees by 0.3 percent each year, every year. People would still get COLAs. But in a diet-version.

NARFE’s Jessica Klement estimated the typical CSRS retiree would miss out on $50,000 in future benefits if the COLA calculation change was made. It wasn’t, in part because of gridlock.

[…]

There is an upside to gridlock, especially for active and retired members of the federal family. It kept politicians with political, personal or fiscal axes to grind (out of your hide) from chopping up your benefits package. Feds even got a token raise. While only 1 percent (same as this year) it was 100 percent more than they got in 2013, 2012 and 2011.

The gridlock also gives retiree advocates and labor groups more time to combat those policies.

Two lawmakers, Rep. Jason Chaffetz [R-Utah] and Rep. Mark Meadows [R-N.C.], are leading the push for civil service reform, including pension changes.

OpenRetirement covered their plans here.

CalPERS Hires Lobbying Firms to Represent Interests Before Congress

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CalPERS announced Monday it has hired two lobbying firms to represent its retirement policy and market regulation interests in front of the U.S. Congress and the Executive Branch.

From a CalPERS press release:

The joint venture between Lussier Group/Williams and Jensen was selected as [CalPERS’] federal representative for retirement policy issues, and K&L Gates was selected as its federal representative for investment and financial market regulation issues.

A third firm, a joint venture of Avenue Solutions/Jennings Policy Strategies was selected in November to represent CalPERS’ health care-related interests.

“Having specialized representatives in these areas will enable us to play a stronger role in retirement and investment national policy development that will continue to enhance the long-term sustainability and effectiveness of our programs,” said Board President Rob Feckner. “We look forward to working with both of these firms and are eager to have their skill and expertise put to work for us.”

Earlier this year, the CalPERS Board directed staff to begin the search for specialized representatives in the policy areas of health care, retirement, and investments. Three firms were selected as finalists for the retirement policy representative, while two firms were selected as finalists for the investment policy representative. After a thorough review and interview process, Lussier Group/Williams and Jensen, and K&L Gates were selected by the Board this week. The selections are contingent upon satisfactory negotiations of terms and conditions in order for the contracts to be awarded.

“Engaging nationally on retirement security issues is a priority for CalPERS and an important part of our commitment to our members,” said Anne Stausboll, CalPERS Chief Executive Officer. “Having three separate and focused representatives broadens our reach and ability to influence outcomes.”

CalPERS is the largest public pension fund in the United States with assets of about $300 billion.

 

Photo by  rocor via Flickr CC License