OPM pushes cuts to federal retirement benefits

Image: Shutterstock/vipman

The Office of Personnel Management is moving ahead with a series of changes to employee benefits that it estimates will save more than $143 billion over 10 years.

In a letter to House Speaker Paul Ryan (R-Wis.), OPM Director Jeff Pon lays out four legislative proposals for changing federal employees’ retirement calculations, which align with the changes proposed in the White House’s fiscal year 2018 budget, “for the consideration of the Congress.”

First, OPM proposes eliminating Federal Employees’ Retirement System annuity supplements “for new retirees and … for survivor annuitants.”

The personnel agency is also pushing changing the pension calculation, which currently includes an employee’s three highest salary years, to incorporate the five highest.

Another change would be for FERS employees to fund a greater portion of their retirement benefit. Under the proposal, employees’ deduction rates would increase one percent each year until they reach 7.25 percent of basic pay.

Lastly, OPM proposes reducing or eliminating retirement cost-of-living adjustments.

Exactly how much feds make compared to their private sector analogues is under dispute, and those disagreements between OPM and federal unions extend to these proposals as well.

OPM says the changes would bring federal retirement benefits “more in line with the private sector,” but National President of the American Federation of Government Employees, the largest federal employee union, J. David Cox blasted them.

“Federal offices across the country are struggling to recruit and retain workers because federal wages and benefits are falling further behind the private sector,” Cox said in a statement. “Yet the Trump administration wants to freeze employees’ wages next year and now is proposing to take away the retirement benefits they’ve worked a lifetime to earn.”

Cox also alleges the administration wants to attach the proposals to the must-pass National Defense Authorization Act for fiscal year 2019, “even though these changes would affect all current and retired federal employees.”

In addition to the retirement cuts, the White House’s fiscal year 2019 budget floats the prospect of a pay freeze for civilian employees, and a 2.6 percent pay raise for military members.

"It's the wrong way to do it and it's the wrong thing to do," Rep. Gerry Connolly (D-Va.), ranking member on the Government Operations Subcommittee of the House Oversight Committee told FCW. He said that cuts to annuities for current retirees "breaks faith" with former feds and "exponentially harms our efforts to recruit and retain talent" for the federal government in a time of 3.9 percent unemployment.

Connolly said that he didn't doubt the bill could wind up in the NDAA, but warned that the inclusion of the measure "that pits service members against civilian federal employees" could "weigh down" the bill with Democrats like Connolly who typically support bipartisan annual defense measures.

The proposed changes comes as military and civilian agencies alike are looking for ways to attract scarce IT and cybersecurity talent.

Correction: Due to an editing error, this article incorrectly described Rep. Gerry Connolly's role on a House committee.

FCW executive editor Adam Mazmanian contributed reporting to this article.

About the Author

Chase Gunter is a former FCW staff writer.


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