Forget the pay freeze. Brace yourself for a pay cut too!
Most federal workers would see their take-home pay drop 5 to 6 percent under legislation the Senate is scheduled to take up next week.
The proposal requiring employees to pay a larger share of their retirement costs is part of the budget that has already passed the House as part of the fiscal year 2012 budget resolution. It also calls for a reduction, via attrition, of 155,000 employees. That, according to House Budget Committee Chairman Paul Ryan (R-Wisc.) is the number of federal workers hired since the Obama administration took office.
Critics say that figure doesn’t take into account thousands of feds who quit or retired over the last two years.
Under the plan, people who are covered by the old Civil Service Retirement System (about 20 percent of the total workforce) would see their retirement contributions (the amount deducted from their biweekly paychecks) go from 7 percent to 12.5 percent.
The majority of employees, who are under the Federal Employees Retirement System, would see their retirement contributions now 0.8 percent go to 5.75 percent.
According to government data, Uncle Sam now contributes 18 percent to the annuity of CSRS employees and 11.5 percent to finance the FERS benefit.
In effect the House action would split the cost 50/50 between the government and individual employees.
Unions and groups representing federal and postal workers at all levels are taking the threat seriously. Federal Managers Association president Patricia Niehaus told the Senate Budget Committee that the proposal to make feds pay more for their pensions “is nothing less than a poorly disguised pay cut…” Niehaus said that trimming the federal workforce would hurt taxpayer-customers from the IRS to Social Security.
“When the Clinton administration imposed sweeping arbitrary workforce cuts (of about 172,000) in the mid-1990s” she said, officials and politicians quickly learned that “the workload didn’t change,” and outside contractors had to be hired to take up the slack.
The National Active and Retired Federal Employees Association, which represents both working and retired feds, has mounted what it hopes will be a massive grass roots operation that will touch every congressional office. NARFE, which traditionally has had one of the largest PACs (political action committee funds) calls it ” Protect America’s Heartbeat”. It’s set up a system that will generate letters and e-mails to individual members of Congress, especially targeting the Senate. You can find it on their website, NARFE.org
More??? Coming soon from Congress. Votes on plans to extend the current two year pay freeze an additional one to three years, and the plan to reduce future retirement benefits by basing employees’ annuity payments on their highest 5-years of service. Under current rules pensions are based on the employees high-3.