Budget

Unions urge Congress to reject pension contribution hike

A coalition of unions and federal employee groups are urging lawmakers to reject cost-cutting proposals that harm federal pay and benefits.

Federal News Network Staff

July 6, 2011 1:03 pm

1 min read

By Jolie Lee
Federal News Radio

A coalition of unions and federal employee groups are urging lawmakers to reject cost-cutting proposals that harm federal pay and benefits, particularly one proposal to increase feds’ retirement contributions.

“Federal workers are already making sacrifices with the two-year pay freeze, and taking steps to reverse our government’s spending should not be unduly shouldered by our nation’s workers,” according to the July 1 letter from the Federal-Postal Coalition to President Obama and leaders in Congress.

The pension change proposal would increase federal employees’ retirement contributions from 0.8 percent to about 6 percent as part of a deficit reduction compromise. Some federal benefits experts have said the change amounts to about a 5 percent pay cut.

The proposal is included in the 2012 budget plan by House Republicans and was recommended in the President’s bipartisan deficit commission report.

The contribution increase would not correspond with any increase in benefits, wrote the Coalition. It would be “a payroll tax increase as surely as any payroll tax increase to Social Security would be,” according to the letter.

The Coalition consists of more than two dozen federal unions and organizations representing 4.6 million federal employees and retirees.

See a list of legislative proposals affecting federal employees’ pay and benefits.