GOP budget plan would drastically hike FERS contributions


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.

(Speaking of Simpson-Bowles, CNN reports that there may be some life in it yet … but probably not much. Seems that not even Clint Eastwood can save that plan.)

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.


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  1. James Feynman on

    “Savings”? They take billions more from federal employees, in order to avoid paying billions into the pension fund, and then they have the nerve to call it “savings”!

    They need another word.

  2. Do they remember we pay taxes too so we pay our share, taxpayer share, and get what? Hey Congress — save the plan by giving up your pensions. You get to make all that money we are prohibited by ethics rules from making. I am a professional employee – exemplary performance appraisals – who makes a 40% of what I could earn in the private sector. I do it because the federal government needs people like me and my colleagues who care about law enforcement that we are willing to take most of our pay in job satisfaction – or at least, we were.

  3. Fed employees are expected to make several “savings” adjustments in order to “help” the government pay its bills. Like spending thousands/millions on each “working” vacations the first family takes. Seems like millions are wasted on “thinking” about what to do instead of actually doing something positive about our situation. Then again, who is going to keep friends of the administration in the 1% group if we fed employees don’t support those efforts? Please give!?!?

  4. If only Congress was held to the same rules/guidelines that all Federal Employees are held to… Why can’t they give up all their perks in pay? Why can’t they pay more to their “Pension” plan? Why can’t their pay get frozen through 2015? Why can’t they have the same “health care plan” that other Federal Employees have? Finally, they need to start paying into social security just like all other American’s! It is the old saying: “Do as I say…not as I do”!!!!

  5. Lets see, you contribute 0.8% towards your pensions and your b****ing because they want you to give more toward your own future? No wonder the American people are upset with Federal Employees. You are a bunch of self centered greedy people. You can’t even come close to this retirement plan in the private sector. Stop whinning and be thankful you have a job that offeres a retirement plan. The problem with our country today is everyone wants the handout while not working for it. Save for money people and plan for the future. Don’t rely on others or the goverement to support you from craddle to the grave.

  6. DJ,

    I’d be happy to take my FERS “contributions” and put them in a real 401k instead. Sadly, that’s not allowed.

    0.8% or 6.25%, either way, put it and the share that’s listed as paid by the governments (like the other part isn’t) in to a 401k that I have full control over. Add in my TSP contributions. (I’d be happier if S.S. were added there too).

    People were complaining about a 5.45% pay cut (since FERS contributions are mandatory) As it stands, same crappy system and a smaller pay check.

    While CSRS has a higher contribution, it has a better return for the individual.

    As for the FEHBP changes, fine by me. $11k covers my plan in full (Can I get the rest paid to me?). I’d even go back to the HDHCP if I could get the rest of the $11k put in my HSA.

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