In a budget document that has been circulating among Capitol Hill Republicans, the highest-value option—$44 billion over 10 years—would to require all FERS employees to contribute 4.4 percent of salary toward their retirement benefits. Image: Tony Quinn/Shutterstock.com
By: FEDweek StaffUpdated: The House and Senate have now approved a budget outline that clears the way for a separate bill that by all indications will seek to reduce the value of federal employee retirement, health insurance and other benefits.
The House last week on a party-line vote accepted the Senate version of a budget “resolution” setting overall tax and spending goals through 2034; that is an internal congressional working measure that does not have the force of law. While some House Republicans had opposed the measure on grounds that it did not seek spending restrictions as severe as in an earlier House-passed version, they ultimately voted for it as needed to start the next stage, called reconciliation.
A reconciliation bill, which would have the force of law, requires only a simple majority vote in the Senate rather than the 60-vote threshold needed there for most major legislation.
The budget resolution orders a number of congressional committees to report by May 9 on their recommendations for cutting spending from assumed baseline levels to be included in the reconciliation bill. For the House Oversight and Reform Committee, the goal is $50 billion in savings. Because that committee has little jurisdiction over spending other than on the federal workforce, the panel would have to look there for most if not all of that savings target.
In a budget document that has been circulating among Capitol Hill Republicans, the highest-value option—$44 billion over 10 years—would to require all FERS employees to contribute 4.4 percent of salary toward their retirement benefits. 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.
The document does not estimate how many employees have been hired since 2013, but just above half of FERS employees have less than 10 years of service and already are paying at the 4.4 percent rate.
That option also would have the advantage—in congressional budget terms—of making an immediate effect, in contrast to several others whose impact would be spread out. These include 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; and basing the annuities of future retirees on the highest five consecutive salary years rather than the current three.
Also mentioned is changing the premium sharing system in the FEHB to a voucher system in which the government’s share would be set at a flat amount and increased at a rate lower than the growth in premiums. The document does not mention the PSHB for postal employees and retirees, where the employer share is funded by USPS, not by general appropriations.
The options document does not specify potential effective dates those changes nor for others listed that would have a lesser impact, such as charging employees fees for filing appeals at the MSPB and eliminating official time for employees to perform union-related duties on the clock.
The measure shows higher spending for the counterpart Senate Homeland Security and Governmental Affairs Committee because that panel’s jurisdiction includes border enforcement and other immigration-related activities that would be in line for an increase.
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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)
