Two year pay freeze would really mean three

Federal Drive

Two year pay freeze would really mean three

This year\'s salary could well become next year\'s and the year after. Senior Correspondent Mike Causey explains.

Federal News Network Staff

November 30, 2010 8:40 am

< a min read

Federal News Radio Senior Correspondent Mike Causey told the Federal Drive that a two-year freeze actually translates into a three-year freeze.

Federal employees’ pensions are based on the highest three-year average salary (usually the last three years worked). If that figure is frozen it could mean smaller than expected benefits when workers do retire.

“People’s high-three won’t go up,” Causey said.

Federal employees will “be getting a salary but their retirement annuities won’t go up,” Causey said.

A freeze could affect other groups of workers, he said. Federal pay is tied to the salaries of federal contractors, foreign embassy employees and Washington-based unions.

Causey said the freeze would have a “rippling effect” but added, “This won’t have a crippling effect.”