Less Money In, More Out?

The report also said that the formula for employer matching contributions for FERS employees could be revised so that the government pays its maximum 5 percent share only if employees are investing at least 10 percent of their salaries, rather than the current 5 percent (CSRS employees would not be affected since they get no matching contributions). CBO said that would be more consistent with matching arrangements in the private sector. It also raised the possibility of increasing the required employee contributions toward retirement by 0.5 percentage points, phased in over three years, which it said would similarly make budgeting in the federal retirement program more similar to private sector retirement. Such a change was adopted as part of a 1997 budget law, although the increase later was rescinded.