Potential Benefit Cuts Outlined

The Congressional Budget Office has once again released a series of budget-cutting options that in the federal employment realm mainly focus on the Federal Employees Health Benefits and retirement programs, which account for the lion’s share of spending on federal employees outside of salaries. The options include: setting the government share of FEHB premiums according to a flat dollar amount that would be increased by general inflation, not by the usually higher increases in medical costs; cut the government contribution toward retiree premiums by 2 percentage points for each year of service under 30; base annuities for new retirees on their highest five salary years rather than the current high-three; hold annuity cost-of-living adjustments below the rate of inflation; increase employee contributions to retirement by a half-percent of salary; reduce matching government contributions to the Thrift Savings Plan for investors under FERS; and switch Federal Employees Compensation Act benefits for beneficiaries to an annuity at age 55.