Retirement, FEHB Proposal Repeated

The Bush administration budget repeats a proposal it made last year and that was rejected by Congress involving the financing of the CSRS retirement system and the Federal Employees Health Benefits program. The administration seeks to shift the funding responsibility for future FEHB costs for an agency’s employees once they hit retirement, as well as for future costs of their CSRS employees, into individual agency budgets (no similar proposal was made for the FERS system because future benefits under that system already are considered fully funded). The administration argues that the funding shift will allow a better picture of the true cost of agency programs. However, employee organizations and several leading civil service experts in Congress blocked a similar plan last year, arguing that the budget would shift important obligations from the mandatory side of the budget to the discretionary side, where they would be more vulnerable to cutting.