Federal News Radio Senior Correspondent Mike Causey told the Federal Drive that a two-year freeze actually translates into a three-year freeze.
Federal employees’ pensions are based on the highest three-year average salary (usually the last three years worked). If that figure is frozen it could mean smaller than expected benefits when workers do retire.
“People’s high-three won’t go up,” Causey said.
Federal employees will “be getting a salary but their retirement annuities won’t go up,” Causey said.
A freeze could affect other groups of workers, he said. Federal pay is tied to the salaries of federal contractors, foreign embassy employees and Washington-based unions.
Causey said the freeze would have a “rippling effect” but added, “This won’t have a crippling effect.”
Tom Temin is the host of The Federal Drive, which airs from 6-10 a.m. on 1500 AM in the Washington, D.C. region and online everywhere. Tom has 30 years experience in journalism, mostly in technology markets. Before coming to Federal News Radio, he was a long-serving editor-in-chief of Government Computer News and Washington Technology magazines.