Deficit Goals Achieved by Balancing Employee Contributions to Retirement
Brings Public Retirement Share into Parity with Private Sector
(WASHINGTON)—In accordance with the House adopted FY2013 budget plan, the House Committee on Oversight and Government Reform will act Thursday on legislation to achieve deficit reduction goals. Once passed out of the Committee, the legislation will be included as part of a broader House “reconciliation” package. The Committee plans to reduce the deficit $82 billion over ten years.
“Like Social Security, the Civil Service Retirement and Disability Fund is not a store of wealth, it’s a line on the Treasury’s ledger. If the federal government’s out of control spending is not curbed, these accounts will prove just how empty they really are–we need to secure these earned employee benefits and reduce the deficit at the same time,” Oversight Chairman Issa (R-CA) said.
The Committee’s plan directs federal employees to contribute an additional five percent of pay toward their defined benefit pension plan phased-in over five years. This will be achieved by employees contributing an additional 1.5 percent of salary in 2013, an additional .5 percent of salary in 2014, and an additional 1.0 percent of salary in calendar years 2015-2017.
Members of Congress and their staff enrolled in the Civil Service Retirement System (CSRS) will pay an additional 8.5 percent of salary over five years. Members of Congress enrolled in the Federal Employee Retirement System (FERS) will pay an additional 8.5 percent of salary over five years, and congressional employees enrolled in FERS will pay an additional 7.5 percent of salary over five years.
The legislation also eliminates the FERS special supplement for new hires who voluntarily retire before age 62. Under current law, the FERS system pays workers more if they retire before reaching Social Security retirement age.
Additional information on the Committee Business Meeting is available here.