Senate Majority Leader John Thune responds to a question from the media during a press conference at the US Capitol in Washington, DC, USA, 06 May 2025. House committees continue their work on President Trump's budget, aiming to have a vote before the Memorial Day recess. Image: SHAWN THEW/EPA-EFE/Shutterstock
By: FEDweek StaffA budgetary package approved last week by the House Oversight and Government Reform Committee amounts to a set of incentives for current federal employees to leave the government and disincentives to prospective employees to join it, according to those who oppose it.
The provisions seem designed to “make the prospect of working for the federal government so unattractive as to drive from executive branch agencies experienced and dedicated employees,” the AFGE union said, while the NTEU union said the package “undercuts the ability of agencies to recruit and hire the next generation of talent needed to serve the American people.”
Those provisions are now to be joined with those passed by other House committees into a “reconciliation” bill that would require only simple majority votes in both the House and Senate. That is still in progress in the House, however, with no floor voting scheduled for this week on such a bill. The picture is even more unclear in the Senate, where the counterpart Homeland Security and Governmental Affairs Committee has not taken up a companion package and has set no schedule to do so.
Whether Republicans can approve such a bill with only their votes is in question, given that a number GOP members on both sides of the Capitol want changes to various spending and tax provisions. Even if leaders muster the votes needed, working through such concerns takes time—as has happened with other budget bills in recent years—leaving the possible timing of passage even more uncertain.
The effective date is important regarding one of the provisions: to generally eliminate the FERS “special retirement supplement” effective with those who retire after enactment. That supplement replicates the value of Social Security benefits earned while in FERS employment for those who retire before age 62 until that age, when they can start drawing Social Security.
While the repeal would not apply to those who are subject to mandatory retirement—such as law enforcement officers, firefighters and air traffic controllers—those who already are retirement-eligible and would be affected by the repeal could have a strong reason to retire before that happens, since many thousands of dollars a year in retirement income would be at stake.
That also could be a concern for retirement-eligible persons who accepted a “deferred resignation” offer putting them on administrative leave until as late as September 30, many of whom have stated an intent to retire effective then. They similarly might want to act to advance their retirement dates; the OPM guidance on the original government-wide program said that would be allowed, but agency-specific offers since then might have different terms.
Budget provisions
“At a time when the Trump administration is pushing federal workers out of their jobs, eliminating the FERS supplement would be an especially callous act,” the AFGE said in a letter to House members.
The same kind of consideration, although with a longer time to prepare, applies to a provision to change the annuity calculation for new retirees—basing it on the highest five consecutive years of salary rather than the highest three. That provision, which would take effect with those retiring in calendar year 2027, would be “an outright theft of earned benefits that would cost federal retirees thousands of dollars annually,” said Rep. Stephen Lynch, D-Md.
The provision with the largest dollar impact would require all FERS employees to pay 4.4 percent of their salary toward their retirement benefits. Currently about half pay less—0.8 percent of salary for those hired through 2012 and 3.1 percent for those hired in 2013—while those hired in 2014 and after already pay 4.4 percent. For those now paying 0.8 percent of salary, the increase would be phased in as 1.8-point increases in both 2026 and again in 2027, while those now paying 3.1 percent of salary would see a 1.3 percent increase in 2027.
While that would not reduce future benefits, it similarly could steer some employees toward retiring since they would be paying more for the same future benefits.
The required retirement contribution would be still higher, an additional 5 percent of salary, for those hired after the date of enactment, unless they elect to become “at-will” employees within a year of hiring. By doing so, they would pay 4.4 percent of salary toward retirement but would lose rights to appeal firing and other personnel actions based on conduct or performance grounds.
“New employees might feel pressured to sacrifice their civil service rights for a modest pay incentive, especially if they are led to believe that “at-will” status is the norm or is expected by management,” said the NTEU in a letter to House members.
Another form of disincentive would be a requirement that employees pay a fee for filing an appeal of a personnel action at the MSPB. While the bill does not specify an amount, Lynch estimated it at $350, which that “would create a financial barrier for employees seeking justice, particularly for low-income or recently separated workers.”
“The effect will be to deter federal employees from pursuing legitimate claims of discrimination, political retaliation, and workplace abuse, a process that helps ensure the integrity and nonpartisanship of the civil service,” the AFGE said.
During the committee voting, Democrats offered a series of amendments to delete those provisions, all of which the Republican majority voted down.
Ruling on CFPB Job Cuts Could Affect Challenges to Other RIFs and Reorgs
OPM Calls Off Viewpoint Survey; Next Edition to be Revised
Several Federal Agencies Disavow Union Contracts, with More Likely to Follow
See also,
Should I be Shooting for a $1M TSP Balance? Depends…
What to Know About the New Federal Application Process
Attorney Schnitzer:
How to Challenge a Federal Reduction in Force (RIF) in 2025Attorney Schnitzer:
A Pre-RIF Checklist for Every Federal Employee, From a Federal Employment AttorneyTop 10 Provisions in the Big Beautiful Bill of Interest to Federal Employees
