Your guide to the chamber of horrors

Thanks to the two-year pay freeze and two years of higher health premiums, many federal workers today are taking home less money than they were in 2010. Federal pay on average has increased about 1.2 percent but that is primarily because of within-grade longevity raises and promotions during the freeze.

Feds who are under the CSRS retirement program aren’t benefiting from the just-extended Social Security payroll tax break.

Alert (frightened, angry, disgusted) feds are also curious as to whether Congress has plans to extend their pay freeze until 2013, 2014 or maybe even until 2015. So which one is it?

Short answer: Yes and Yes.


Key members of the House and Senate have ambitious plans to whittle back federal pay, reduce the number of people on the federal payroll, etc. Some are in bill form, others are still at the planning stage. Those that fall in the “other” category include:

  • A plan to eliminate the FERS social security option for workers who voluntarily retire before age 62. This would cost FERS early retirees thousands of dollars a year and probably cause many of them to work longer. The White House supports this plan.
  • Base annuities of people who retire in the future on their highest five-year average salary (instead of the current high-three formula). That would also trim benefits — in some cases a lot — and could force people to work longer to get the benefit they had anticipated under the high-three system.
  • Change the formula used to determine retiree cost-of-living adjustments. That would result in future COLAs — for federal, military and Social Security retirees — by as much as a percentage point.
  • Reduce the government payment for employee-retiree health premium benefits either as a percentage or by giving workers a voucher each year to purchase insurance. Either could/would increase the share of premiums paid by workers and retirees possibly forcing them into less-costly plans.
  • The U.S. Postal Service has proposed setting up its own health plan. But details are short. Unknown is whether it would cover retirees, what would happen to the thousands of nonpostal workers who are in plans sponsored by postal unions and what a go-it-alone health plan would mean for its risk pool? One of the ways to reduce health-care costs is to increase the employee share of premiums and or reduce benefits. Postal unions don’t like the idea. Details to come …
  • Reduce federal employment — across the board — by 10 percent. This would be accomplished by attrition with agencies allowed to fill only two of every three vacancies created through resignation, retirement or death. Previous efforts to reduce hiring across the board have usually crashed and burned, as key agencies ( Defense, TSA, DHS and the IRS) seek exemptions.

Confused? Welcome to the club. But we have a score-card and bill tracker that you can monitor the official chamber of horrors. It is updated daily, so you might want to bookmark it.


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