Retirement & Financial Planning Report

Proposals include higher contributions and eliminating the FERS Special Retirement Supplement. Image: Shchus/

A budget plan from a caucus of House Republicans revives long-running budgetary proposals that have been largely dormant since the 2020 elections, including raising the required contribution toward retirement for FERS employees and basing new annuities on the highest five consecutive years of salary rather than the highest three.

The plan from the House Republican Conference does not specify how high the required contribution would be raised, but similar past proposals would have increased it so that the employee and employer shares were equal. That in effect would be about a 6 percent of salary increase for most employees—a lesser increase for those hired since 2012, who are paying in more than those hired through that year.


Other provisions would include: “reducing or eliminating the COLA for FERS and the Civil Service Retirement System; eliminating the Special Retirement Supplement, which provides additional benefits for retirees younger than 62 but who had a long federal work history; and reforming the interest rate provided by the G Fund in the Thrift Savings Plan (TSP) to more accurately reflect the yield on a short-term T-bill rate.

Also: moving the FEHB program to a voucher system in which the government share would be set according to a fixed dollar amount and increased by the rate of inflation rather than the typically higher inflation in medical costs; and switching the COLA calculation to a method that takes into account changes in consumer purchasing patterns with inflation, resulting in smaller inflation adjustments.

All of those proposals have been raised in the past by some congressional Republicans and by the White House during the Trump administration, only to make no progress. However, the document does send a signal of what House Republicans likely would again advocate if they take control of that chamber in the November mid-term elections.

Other familiar provisions of the document include making it easier to fire employees and repealing some of their current appeal rights, eliminating within-grade raises, ending paid time for certain union-related activities, tightening standards for receiving awards and bonuses, and more.

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