OPM Calls Federal Retirement Benefits ‘Very Generous’

Man holding coins for retirement

OPM has called the retirement package “very generous”–a characterization in line with prior Trump administration statements but the first directly from the central personnel agency.

The statement came in a document supporting the Trump administration’s budget proposals affecting federal employees and retirees–to increase required contributions by most employees, reduce inflation protection of annuities and end a supplement for FERS employees who retire before they are eligible to draw Social Security.

“The employee retirement landscape continues to evolve as private companies are providing less compensation in the form of retirement benefits. The shift away from defined benefit programs and cost of living adjustments for annuitants is part of that evolution,” it said. “By comparison, the federal government continues to offer a very generous package of retirement benefits. Consistent with the goal of bringing federal retirement benefits more in line with the private sector, adjustments to reduce the long term costs associated with these benefits are included in this proposal.”

OPM not only runs the retirement program but also is responsible for assuring that the federal compensation package is attractive enough to have a high-quality federal workforce. Since President Trump’s inauguration, the White House or OMB have pushed the initiatives affecting the workforce–with OPM playing a supportive role but not making policy statements with only an acting director there. George Nesterczuk, who has been involved with federal personnel matters in a number of roles over many years under Republicans, has been nominated but has not yet had even a confirmation hearing.

The document also clarified one issue regarding the proposed increase in retirement contributions. While the proposal calls for raising the contributions by FERS employees and lowering the employer share until the two are equal, there had been uncertainty regarding “special group” employees, primarily law enforcement officers, air traffic controllers and firefighters, who are under special retirement provisions.

Compared to those under standard retirement coverage, they already pay an additional 0.5 percent of salary into the retirement fund, but because their benefits are more valuable, their agencies pay in an even higher amount. That raised the question of whether the administration proposal would mean an even steeper increase for those employees. However, the OPM document says that for them, the proposal “would increase, but not equalize employee contributions.”