WASHINGTON, D.C. – Today, U.S. Senators Richard Burr (R-NC), Tom Coburn (R-OK), and Saxby Chambliss (R-GA) reintroduced the Public-Private Employee Retirement Parity Act to address long-term liabilities facing the federal government. The legislation would end the defined benefit pension portion of the Federal Employee Retirement System (FERS) for new federal government hires starting six months after enactment, leaving fully in place the Thrift Savings Plan with the current match (up to 5%) for both current and future federal workers. The bill would also apply to Members of Congress.
“Right now, federal government workers receive far more generous retirement benefits than private sector employees. The cost to taxpayers of these benefits is unsustainable and we simply cannot afford it,” said Sen. Burr. “We cannot ask taxpayers to continue to foot the bill for public employee benefits that are far more generous than their own.”
“Generous pension plans for members of Congress have helped turn congressional service into a career rather than a calling,” said Dr. Coburn. “At the same time, federal workers enjoy a better benefits package and higher overall pay than most taxpayers – even at a time when many Americans are still simply looking for a job. This status quo is unsustainable and needs to be reformed.”
“With America now $17 trillion in debt, we simply cannot continue to commit to future government spending,” said Sen. Chambliss. “Americans have demanded their leaders make the necessary changes to our fiscal policies to put our nation on a track to sustain economic growth and real job creation. The Public-Private Employee Retirement Parity Act is a small change that will have a big impact on our debt and deficit.”
Currently, federal workers enjoy both a defined benefit pension and a Thrift Savings Plan (equivalent to a 401(k)) with up to a 5% match, paid for by the taxpayers. The average private sector employee gets a 401(k) with a 3% employer match and no pension. Federal workers also continue to enjoy federal health care benefits (FEHBP) after they retire, a benefit that is becoming increasingly rare in the private sector.
The legislation will require the Administration to make the annual report on the on the actuarial status of the federal retirement system publically available online by January 31st each year. According to the most recent Office of Personnel Management’s Civil Service Retirement and Disability Fund annual report, the FERS system is currently underfunded by $20.1 billion for fiscal year 2012. In the coming years, as more of the retirement burden falls on the FERS system, the required federal government contributions to FERS will skyrocket, especially in comparison to what federal workers will put into the system. In 2012, the Federal government contributed about $22.2 billion to FERS. By 2065, those required contributions will rise to $239.5 billion, with the government paying out $415.3 billion in benefits.
Current federal government employees and retirees would not be impacted by the changes in the Burr-Coburn-Chambliss bill.
Timmy, you are clueless. All of your arguments are wrong. i don’t have enough time to elaborate but you don’t know what you are talking about
Most people in the TSP are not educated to manage their retirement money. With an average of 18.8% increase in the “C” fund in the last 5 years, the majority of people in my workplace had their money in the “G” fund(average of 2.29%). At Boeing, they smartly rejected a contract that would eliminate the pension and put them in the 401k.
I love the word “enjoy” they use to describe the pension and health benefits that we PAY for. They make it sound like its a gift. They are expensive,as well as deceptive. Timmy T does a great job of explaining how the fers retirement works. When fers was created just about 30 yrs ago it was to reduce the gov portion of the retirement and to have the employee contribute more for less. They added 7 years (from 55 to 62)to be able to get the full retirement under fers. That is huge! Now they want to take more! Also the life insurance benefits(x times your pay)is a rip off that they have to be making big money on. There are a lot of postal workers whose premiums triple at 55 haven’t even noticed the change in their check. By that time it is sometimes too late( health reasons make it difficult to make a change that is worth it)to get a new policy. NO ONE AND I MEAN NO ONE THAT IS REASONABLY HEALTHY SHOULD BE PAYING $1800.00 to $2000.00 a year for a 250,000.00 policy. That is what you pay when you turn 55 and have elected 5 x your pay. This should be illegal!
What a bunch of CRAP! Our Retirement pension is not GENEROUS. First of all for FERS, the 1% times the number of years of service times the average of the top 3 years amounts to 1% of nothing. This amount would be equal to what I would be making from Social Security after working up to the age of 65 years old. Craft Employees have not had a decent COLA in years so our average top 3 years has gone nowhere. Second of all the TSP is a rip off since it is money that is not taxed inwhich the Employee will have to pay the tax at a time in their life when they need it the most, when they retire and are on a fixed income. Third of all the Post Office and the Government Officials did not tell you that for every dollar you contribute to TSP that it will reduce your Social Security monthly annuity when you turn 62/65. Social Security stopped sending you the yearly statements because it showed the drop in your monthly anticipated monthly annuity if you contributed to the TSP. Your better staying out of the TSP because you Employer pays 100% (they match you dollar for dollar)of what they are deducting from you for Social Security versus the matching of 5% for TSP. Also you will be taking home more money per pay check inwhich you can use to pay off high interest credit cards or put the money in the bank for your rainy day fund. The only people that will benefit from this Bill are the FAT CATS in Washington who have ripped the country off and put their retirement money in off shore bank accounts. Last but not least, being in FEHB is not generous. Your retirement premium will double what your paying now since the pool of retired Federal Workers is far less than those of the current working Federal Workers. If the law makers really want to take care of the Federal Workers, they should increase the 1% to the 2% of what Civil Service retired employees get. That would make up for the loss in Cola’s over the years of ones career employment.
Leave it to the rich senators from the GOP to crap on us all.