REGULATION/LEGISLATION

House considers federal pension, civil service reforms

Shifting the federal retirement system to defined contribution approaches from defined benefit were some ideas offered at a hearing Thursday by the House Government Operations Subcommittee, whose members are considering reforms to the federal employee system.

The hearing focused on how federal employee compensation compares to the private sector and an April Congressional Budget Office report that found federal employees earn 17% more.

Chairman Mark Meadows, R-N.C., said that “there will be civil service reform,” but he has not taken a position yet on the direction those reform efforts should take. “We need a federal retirement system that is responsive to the needs of the transient millennial workforce. In an era when employees are highly mobile and can frequently change jobs, it makes no sense to have an archaic pension system that is designed for a workforce that stays in place for decades,” he said.

Jacqueline Simon, policy director for the American Federation of Government Employees, said that her union has been told that President Donald Trump’s budget — expected to be submitted next week — will increase employees’ contributions to the defined benefit plan to as much as 9% of salary, reduce cost-of-living increases and reduce the rate of return for the $490 billion Thrift Savings Plan’s internally managed G Fund by shortening the maturity period, among other changes. Currently, workers pay 0.8% to 4.4% of salary, depending on when they were hired.