New federal employees would see their contribution to retirement funds drop by hundreds of dollars under legislation introduced Feb. 5 by Rep. Donna Edwards, D-Md.
The Federal Employee Pension Fairness Act would reverse pension increases passed under the Bipartisan Budget Act of 2013, which requires federal employees hired after January 2014 to pay 4.4 percent of their salaries into the Federal Employees Retirement System. Those hired in 2013 pay 3.1 percent. Employees hired before 2013 contribute 0.8 percent.
The bill is co-sponsored by Reps. Gerry Connolly, D-Va., Elijah Cummings, D-Md., Marcy Kaptur, D-Ohio, Keith Ellison, D-Minn., Charlie Rangel, D-N.Y., Betty McCollum, D-Minn., Grace Napolitano, D-Calif., and Delegate Eleanor Holmes Norton, D-D.C.
Federal employees have endured years of pay freezes, unpaid furloughs, the elimination of benefits and the increases in pension contributions, Edwards said. The legislation duplicates a bill she introduced in 2014.
"Enough is enough. It is our duty to ensure the fair treatment of the federal employees who have served our nation so well, especially during times of economic strain. We must stop saddling our federal workers with such disproportionate burden, and start asking wealthy corporations to pay their fair share," Edwards said in a statement.
The legislation would pay for the reductions in contributions by closing tax loopholes for companies incorporated overseas but managed in the United States.
Federal employee groups have been pushing for the repeal of the pension contribution increases, arguing that it squeezes federal employees. For example, A Border Patrol agent hired today at a starting salary of about $48,000 a year will pay $1,700 more for his or her pension each year than someone in the exact same job and location hired in 2012 or before, according to the American Federation of Government Employees.
"While these higher retirement contributions were sold as a way to fund temporary increases in unemployment insurance and to pay for the stimulus that got the nation out of the great recession, Congress made them permanent," Cox said, AFGE president J. David Cox said in a statement. "These higher retirement contributions make it more challenging for agencies to recruit and retain new employees," he added.
Federal employees have already contributed $120 billion toward deficit reduction efforts and the bill would help roll back the trend of cutting federal worker salaries and benefits, said Richard Thissen, the president of the National Active and Retired Federal Employees association.
Overall the pension contribution increases will amount to a $21 billion loss in take-home pay for federal employees over a 10-year-period, Thissen said.
"These increases in retirement contributions came at a time when federal employees' pay was frozen, sequestration budget cuts threatened their jobs and unpaid furloughs undermined their earnings," Thissen said. It's time we compensate them commensurate with their service and sacrifice and repeal these arbitrary retirement contribution increases."
