Light at end of tunnel: Sunshine or trainwreck?

Current federal workers as well as future hires would pay more, in some cases a lot more, under bills and proposals from Congress and the White House.

Last month, Congress approved, and the President signed into law, a change in the FERS retirement program. People hired after Dec. 31, 2012, will be required to contribute a total of 3.1 percent of their salary each pay period to partially cover their future FERS benefit. Current FERS workers, and anyone hired through the end of the year, will continue to pay only 0.8 percent for their lifetime annuity benefit.

That minor hit represented a major victory for the handful of pro-fed politicians (mostly from the D.C. area) on Capitol Hill, and groups that represent feds, postal workers, managers and retirees. So even though they objected loudly to the future rules change, they were happy that it wasn’t applied to current employees. They acknowledged privately that it could have been much worse. That was the good news. But …

Pros who watch Congress on behalf of federal and postal workers and retirees say folks already on the payroll aren’t out of the legislative woods yet. As we told you last month, the worst may be yet to come.They note that the President’s budget calls for increasing retirement plan contributions for both current and future CSRS and FERS workers by 1.2 percent.There are other plans and bills pending to increase contributions much more, and some that would eliminate the civil service portion of the FERS benefit completely for future hires.


As to White House backing of a change for current workers, Federal Times senior writer Stephen Losey said that was true before the payroll tax/unemployment plan was approved but “in light of the already-enacted 3.1 percent change for future feds, it remains to be seen how any further changes might or might not affect them.” He was our guest Wednesday on Federal News Radio’s Your Turn radio show.

So the current contribution level for on-board feds may or may not still be in the target zone and if it is, it may not be the bullseye. At least for now.

Congress was almost completely gridlocked in 2011. That turned out to be a good thing for the federal workforce. But last month it surprised a lot of people by moving quickly on previously frozen legislation (which included the FERS contribution increase).

Losey and Jessica Klement, legislative director of the Federal Managers Association agreed that Congress probably isn’t finished reshaping the federal workforce. They noted that all of the fix-the-deficit blue ribbon panels, commissions and congressional supercommittees last year took aim at the federal retirement package. The Simpson-Bowles blue-ribbon group, the first and most prestigious of the panels and appointed by President Obama, said retirement contributions need to go up for current and future employees.

The Simpson-Bowles panel was designed to operate like the BRAC panels. That is they would make recommendations that Congress would vote on — up or down with no amendments. While that didn’t work, the recommendations of Simpson-Bowles serve as an unofficial template for other groups and legislators looking to decrease government costs by increasing yours.

For a look at what’s pending right now, click here.

And hang in there.


By Jack Moore

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