Among the options in the paper is requiring all FERS employees to pay 4.4 percent of salary toward their civil service annuity benefit. Image: Katherine Welles/Shutterstock.com
By: FEDweek StaffA budget options paper circulating among Capitol Hill Republicans includes many often-proposed potential reductions in the value of federal employee benefits plus potential increases in required employee contributions toward retirement.
While the document is not yet a formal proposal, it is positioned to become the basis for early budgetary moves. Republican leaders are planning to soon launch a process beginning with a general budgetary outline in which committees are assigned savings in areas under their jurisdiction and given suggestions for how to achieve them. The committee recommendations would then become part of a “reconciliation” package that, importantly, would require only a simple majority vote in the Senate.
For the House Oversight and Government Reform Committee and the Senate Homeland Security and Governmental Affairs Committee, those options traditionally have focused on retirement and health insurance, since those are the two areas under their jurisdiction involving the most potential savings—and cost to individual employees and retirees.
Among the options in the paper is requiring all FERS employees to pay 4.4 percent of salary toward their civil service annuity benefit. Currently, that contribution is 0.8 percent for those hired before 2013, 1.3 percent for those hired in 2013 and 4.4 percent for those hired since that year (all for the same benefit entitlement). The document does not mention those under the differently funded CSRS system, who now make up only several percent of the federal workforce.
Also in the retirement area are proposals also raised numerous times in the past including: basing the annuities of those retiring after a date to be designated on the highest five consecutive salary years rather than the current three; and ending the annuity supplement for those who retire under FERS before age 62 that is paid until they reach that age and can claim Social Security benefits. The latter benefit is of special interest to law enforcement officers and others in occupations where earlier retirement is mandatory; the paper makes no mention of exceptions for them.
Also mentioned is a variant on past proposals to end annuity entitlements for those hired after a date to be designated. Under the proposal, they would have the choice of remaining under the same retirement rules as others, at the cost of giving up standard civil service protections; or keeping those protections, at the cost of paying still more toward their future annuity benefits.
On health insurance, it repeats a long-running proposal to change the premium sharing system in the FEHB (and now the PSHB) to a voucher system. Instead of the government’s share rising along with premiums, that share would be set at a flat amount; typically in such proposals that amount would increase by less than the annual increase in premiums, although the paper does not go into that level of detail.
Other options, more policy-oriented that spending-oriented, include ending official time for federal unions, ending the practice of providing them free office space and use of equipment in federal buildings, and charging employees for the government’s cost to defend against appeals.
Another would act as an enticement for employees to retire—with their positions then presumably eliminated—by increasing the buyout maximum payment from $25,000 to $40,000 and allowing early retirement with as few as 15 years of service, rather than 20, above age 50.
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See also,
Top 10 Provisions in the Big Beautiful Bill of Interest to Federal Employees
A Pre-RIF Checklist for Every Federal Employee, From a Federal Employment Attorney
Work Longer or Take the FERS Supplement Now: Which is Better?
Doubling Your TSP (C Fund vs G Fund)
