The Republican Study Committee yesterday proposed steep increases to the amount federal employees would contribute to their pension plans.
The committee’s budget plan for next year — called “Cut, Cap and Balance: A Budget for Fiscal Year 2013″ — calls for federal employees to split the cost of their pensions with taxpayers. Federal Employees Retirement System employees now contribute 0.8 percent of each paycheck toward their pensions; the government covers the remaining 11.7 percent. This would mean FERS employees would pay 6.25 percent of each paycheck toward their pension. (Plus another 6.2 percent towards Social Security, of course, and their regular Thrift Savings Plan contributions if they choose to participate.)
Employees under the older Civil Service Retirement System would be unaffected, since they already pay the same 7 percent toward their pensions as the government.
The Republican Study Committee said this would save $110 billion over ten years.
The proposal also calls for switching to a so-called chained CPI method for inflation-based adjustments to federal pensions, which the GOP said would save $26 billion over a decade.
And it wants to turn the Federal Employees Health Benefit Program to a premium support system, which it expects would save $27.6 billion over ten years. Under this plan, the government would cover the first $5,000 of premiums for a self-only health plan, or the first $11,000 for a family plan, and federal employees would cover the rest. The GOP plan doesn’t say whether or by how much those subsidies would increase in the future, but when the bipartisan Simpson-Bowles deficit committee considered a similar plan for FEHBP, it proposed increasing subsidies by the gross domestic product plus one percentage point. Critics of that plan said the growth would not keep up with inflation, eventually shifting the bulk of health care costs onto federal employees.
Last year’s Republican Study Committee budget proposal would have frozen pay for five years and cut the workforce by 15 percent. But yesterday’s plan does not include those provisions.