The first indication of how Republicans on Capitol Hill might change federal retirement benefits came in April, when the House of Representatives approved a fiscal 2015 federal budget raising federal employees' pension contributions, in part to counter revenue lost from reduced corporate and personal tax rates.
Under the direction of House Budget Committee Chairman Paul Ryan, R-Wis., the budget called for federal workers to contribute up to 6.35% of their salaries to their defined benefit plan, and for newer workers to be only in a defined contribution plan.
People participating in the CSRS would see their contributions rise to 12.5% from the current 7%. The measure did not advance to the Senate for final enactment.
On Oct. 29, Mr. Ryan and Darrell Issa, R-Calif., chairman of the House Oversight and Government Reform Committee, wrote a letter to Douglas Elmendorf, director of the Congressional Budget Office, asking the CBO to develop model projections of the long-term impact of the federal retirement system on the federal budget.
They also asked for “different options” for reform, including some of the ideas in the Ryan budget proposal.
“The report should include, but not limit itself to, adjusting the retirement contributions of federal employees, altering the formula for computing pension benefit payments, and expanding the defined contribution component while reducing the defined benefit component,” the letter said.
“CBO should be prepared to provide specific information about the long-term budgetary effects of substantial proposed changes,” they said in the letter.
A Democratic congressional staffer who declined to be identified said, “The letter seems to suggest the majority plans to make deeper budget cuts to the federal retirement system.”
“They have made it pretty clear that this (further cuts in federal retirement) is on their priorities list,” agreed Ms. Kelley of NTEU. “I do not think they have their facts right, and there's no recognition of the retirement crisis in this country in general. We think that FERS is a model retirement program for both the employees and employers,” she said in an interview, noting FERS replaced CSRS, which had more generous benefit formulas.