The Congressional Budget Office has said that the White House’s proposals regarding federal retirement benefits would take even more out of the pockets of federal workers and retirees than the administration projected.

Most of the total difference between CBO’s figure of $167 billion over 10 years versus the administration’s $143.5 billion estimate involves a proposal to increase employee contributions toward retirement for those under the FERS system until they match the government’s share, which would decline as the employee share rose. That would be done in 1 percent of salary increases until the employee share hit about 7 percent. Most FERS employees currently pay 0.8 percent of salary toward that benefit (in addition to the 6.2 percent they pay toward Social Security) although those hired since 2012 already pay more.


“In CBO’s estimation, implementing that proposal would increase federal reve¬nues by $109 billion over the 2019–2028 period,” its report said. In contrast, a message that OPM recently set to Congress containing language to carry out those proposals projected the net additional cost to employees at $68.7 billion. The difference largely was due to CBO’s projections of much higher increases in the later years.

Regarding benefit payouts, CBO said that “the administration’s proposal to cut retirement benefits for federal civilian employees—both current and future annuitants—would decrease outlays for those benefits by an estimated $58 billion (or 6 percent) from 2019 to 2028. The proposal would achieve those savings by changing how benefits are calculated, reducing or elim-inating cost-of-living adjustments, and eliminating the annuity supplement for federal workers who retire before age 62.”

The administration had estimated the impact of those three changes as $74 billion over that same period. CBO did not break out estimates of the specific changes but much of the difference likely involves COLAs. In OPM’s projection, the proposals to eliminate FERS civil service retiree COLAs and to reduce COLAs for CSRS retirees accounted for two-thirds of its estimate.