Federal Pensions Reportedly in the Crosshairs as Debt Ceiling Negotiations Take Shape; Employee Contribution May Increase Seven-Fold


Details began to emerge this weekend from White House and congressional negotiators with regards to the shape of a long-term deficit reduction plan to coincide with the raising of the national debt ceiling. After weeks of negotiations, it appears that lawmakers will return to a familiar source to find the savings they are looking for: the federal workforce.

Administration officials have reportedly agreed to Republican demands for federal workers to contribute more to their pensions, though a definitive number has yet to be chosen. Republican negotiators are pressing for FERS employees to contribute a full six percent of their salary toward their pensions, or more than seven times the 0.8 percent they contribute today. Democrats will likely support a more modest figure, likely in the two to three percent range. Nonetheless, it appears that both parties have conceptually agreed to place the burden of debt reduction on the backs of hardworking federal employees once again.

“Instead of making any serious effort to address the deficit, Washington politicians have decided to take a second drink at the federal employees’ well,” said NFFE National President William R. Dougan. “Federal workers have already accepted a serious pay reduction, and now our elected officials are asking for five percent more. Where does it stop?”

If the full six percent pension contribution is enacted, federal workers would see their pay automatically reduced by five percent. Coming on the heels of a two-year pay freeze, this proposal would serve as a de facto extension of the wildly unpopular policy.

“I am sick and tired of politicians squeezing federal workers time and time again instead of spreading the burden around,” said NFFE Legislative Director Randy Erwin. “The special interests have been prioritized over dedicated public servants for too long, and it cannot continue.”

NFFE remains starkly opposed to any proposal that would reduce federal employees’ retirement security, a position that was reiterated in a letter written to members of the U.S. Senate early last week. NFFE will continue to oppose legislation that unfairly targets the retirement security that federal employees have earned through years of dedicated public service.

“Federal employees earn their retirement,” said Erwin. “We‘ve got to do all we can to keep the politicians’ hands off of it.”