Downsizing your pay/pension for life

In what’s become the administration’s evergreen budget plan, the White House has again proposed that federal workers kick in more of their salary — as in a lot more — toward their retirement plan in return for smaller — as in much smaller — lifetime annuities that are frozen when they retire.

In other words they would pay more for a reduced benefit that would be stripped of any protection from inflation regardless of how long the retiree lived.

If you retired on $2,000 a month this year, for example, your monthly benefit would still be $2,000 a month in February 2030 or 2040 regardless of how much medical costs, health premiums, your cable bill or basics, like food, had gone up.

Currently, Civil Service Retirement System retirees get full cost of living protection and Federal Employees Retirement System retirees get a full COLA up to 2%, then are subject to a diet COLA formula. Losing any, much less all inflation protection, would be a financial disaster for current and future retirees.

In a worst case scenario it could trigger thousands of workers to retire early while at the same time making it financially impossible for others to retire as planned — if ever.

The FY 2021 budget plan is similar to previous proposals in that offers civilian federal workers a smaller January 2021 pay raise of 1%, than the 3% proposed for the uniformed military.

It would also change the way retirement benefits are calculated basing them on the employees’ highest five-year average salary instead of the current high-three formula. The National Active and Retired Federal Employees estimated this would cost future retirees $8 billion over the next decade.

The plan puts the FERS supplement benefit on the chopping block again. It is a payment that FERS employees get if they retire before they are eligible to collect Social Security. That gap payment, often worth tens of thousands of dollars, would be a gut punch to air traffic controllers, law enforcement officers, firefighters and others who are forced to retire up to five years before they are eligible for Social Security. NARFE puts the financial loss to them at almost $20 billion over 10 years.

Tony Reardon, president of the National Treasury Employees Union called the proposals a”slash and burn” approach to government. Everett Kelley, head of the American Federation of Government Employees, said the package is “punitive and ridiculous.”

For a complete rundown on the budget checkout my colleague Nicole Ogrysko’s report. To learn more about its prospects in Congress tune into our Your Turn radio show at 10 a.m. EST today. My guests are Kenneth J. Thomas, president of NARFE and Jessica Klement, vice president for advocacy.

If you have questions for them email them to me before showtime at If you can’t listen today the show will be archived on our home page so you can listen when it works for you.

Nearly Useless Factoid

By Amelia Brust

The Sámi people, an indigenous people inhabiting the northern regions of Scandanavia, pioneered the sport of skijoring, wherein a person on skis is pulled by dogs, a horse or a motor vehicle. It is similar to water skiing or wakeboarding. Several towns in Montana hold competitions in equine skiijoring each year, although this year’s championships at the Whitefish Winter Carnival were cancelled due to unseasonably warm weather.

Source: Wikipedia


Your Turn with Mike Causey


Learn about everything from pay, benefits and retirement, to buyouts, COLAs and pay freezes. Call the show live Wednesdays from 10-11 a.m. at 202-465-3080 with your questions. Dial 605-562-0264 to listen live from any phone. Follow Mike on Twitter and send him an email with your questions and comments. Subscribe on Apple Podcasts or Podcast One.

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Sep 17, 2021 Close Change YTD*
L Income 23.2077 -0.0415 4.43%
L 2025 12.0240 -0.0418 8.33%
L 2030 42.5522 -0.1952 10.54%
L 2035 12.7953 -0.0643 11.50%
L 2040 48.4773 -0.2641 12.46%
L 2045 13.2947 -0.0772 13.28%
L 2050 29.1552 -0.1795 14.12%
L 2055 14.3671 -0.1053 17.18%
L 2060 14.3671 -0.1053 17.18%
L 2065 14.3671 -0.1054 17.18%
G Fund 16.6644 0.0006 0.88%
F Fund 21.0666 -0.0298 -0.55%
C Fund 66.6676 -0.6128 21.56%
S Fund 85.0861 -0.0794 16.31%
I Fund 39.4469 -0.3006 11.70%
Closing price updated at approx 6pm ET each business day. More at
* YTD data is updated on the last day of the month.