Members of Congress and the administration are working to find agreement on a Fiscal Year (FY) 2018 budget resolution, as well as on tax reform legislation, a plan to address the debt ceiling going forward, FY 2018 agency funding after December 8th, and with two hurricanes devastating wide paths in the last two weeks, more recovery aid will also be needed. Therefore, Congress is considering how to pay for all of these items this fall, with potential changes to both mandatory and discretionary spending in December, meaning that changes to federal employee retirement continue to loom large.
The Congressional Budget Office (CBO) produced a recent report that looked at five potential options to change federal retirement, based upon differing desired personnel outcomes. The options are:
- Increase the FERS contribution rate to 4.4% for all current employees;
- Decrease the FERS contribution rate to 0.8% for all employees;
- Decrease FERS pensions by basing the retirement benefit on the five highest years of salary, instead of the highest three years;
- Eliminate the FERS pension, increase the government’s automatic Thrift Savings Plan (TSP) contribution to 8 percent of salary, and require the government to match employees’ contributions up to an additional 7 percent; or
- Eliminate the FERS pension, increase the government’s automatic TSP contribution to 10 percent of salary, and eliminate the government’s matching contribution.
In addition to CBO’s options, members of Congress continue to consider the administration’s recommended changes to retirement benefits from earlier this year, which include increasing FERS contributions by approximately 6 or 7 percent for all employees (thereby reducing take-home pay), moving to a high-5 annuity computation, eliminating the FERS Supplement, and reducing annual cost-of-living adjustments for retiree annuities.
I know that you, like other federal employees, are well aware of the challenges our country faces and have already stepped up to the plate to do your part. You continue to help FDA perform its mission successfully and efficiently, even in the face of continued threats of cuts, government shutdowns, RIFs, and furloughs.
To find out more, please visit the NTEU Legislative Action Center.