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NTEU Opposes Increased Pension Contributions
Posted On: Oct 13, 2011

 The White House released the "President’s Plan for Economic Growth and Deficit Reduction," which the president will submit to the super committee, the congressional group charged with finding up to $1.5 trillion in deficit reduction over the next 10 years.

The president is proposing a permanent 1.2 percent increase in federal employee retirement contributions to the FERS and CSRS retirement systems phased in over a three-year period beginning in 2013. The increase would be implemented in 0.4 percent yearly contribution increases.

The proposal also calls for eliminating the FERS supplemental payment for employees who retire before age 62. It is our understanding that the FERS supplemental change would apply only to new hires. There were no proposals to change the high-3 to the high-5, nor were there any changes in the annuity formulas.

The White House estimates that these changes will save $21 billion.

In a letter sent today to the super committee, I characterized the president’s proposals as ill-advised and inequitable. (ReadNTEU's previous letter to the super committee.)

Federal employees are already under a two-year pay freeze—which amounts to a $60 billion contribution from federal workers over the next 10 years—and now they are being asked to contribute additional money to their retirement without an increase in benefits.

NTEU also raised specific concerns about the impact of this proposal on federal employees covered under the CSRS who will not receive the 3.1 percent payroll tax holiday being proposed for all other American workers. CSRS employees will be excluded from the president’s tax cut proposed under the American Jobs Act because they do not receive or contribute to Social Security.

NTEU believes this unequal treatment of federal employees is unfair, and will press for relief for CSRS employees. NTEU has already raised this concern with the super committee. (Reada statement of support from House Minority Whip Steny Hoyer (D-Md.))

We will continue to work with the committee to shape a plan that does not unfairly single out federal employees in the quest for deficit reduction. For more information and to find out what you can do go to www.NTEU.org.


Colleen M. Kelley,NTEU National President
 


 
 
NTEU Chapter 143
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