A bill proposed in the Senate would end the defined benefits pension portion of Federal Employee Retirement System (FERS) for new hires starting in 2013.
Existing federal employees will not be affected by the Public-Private Employee Retirement Act of 2011, introduced Friday by Sens. Richard Burr (R-N.C.) and Tom Coburn (R-Okla.). The bill will also apply to members of Congress.
The cuts would not impact feds’ Thrift Savings Plan, leaving intact the 5 percent employer match. In comparison, the average private sector employee gets a 401(k) with a 3 percent employer match and no pension, according to statement by Burr.
Under the proposed legislation, federal employees will continue to have federal health care benefits after they retire.
Federal workers receive “far more generous retirement benefits than private sector employees,” Burr said in his statement.
“The cost to taxpayers of these benefits is unsustainable and we simply cannot afford it,” Burr said. “We cannot ask taxpayers to continue to foot the bill for public employee benefits that are far more generous than their own.”
In an emailed statement, Colleen Kelley, president of the National Treasury Employees Union, called the legislation “unwise.”
The legislation is “just another in a series of bills attacking federal compensation and related matters that would, if enacted, make it even more difficult for federal agencies to compete for and retain the talented employees they need to serve the public,” Kelley said in the statement.