NFFE Supports Bill to Rollback Unfair Pension Cuts

Last Thursday, Representative Donna Edwards (D-Md.) introduced a bill that would rollback recent increases to pension contributions for federal employees. The bill would restore pension contributions made by federal employees to pre-2012 levels of 0.8 percent. In the current system, employees hired in 2013 pay an additional 2.3 percent towards their pensions (for a total of 3.1 percent) while employees hired after 2013 are forced to pay 4.4 percent of their salaries towards their pensions. These pension cuts cost agency new hires $1,000 or more each year for no added pension benefit.

 

Originally, increasing federal employee pension contributions in 2012 was used as a way to pay for extending unemployment insurance. Then, members of Congress decided to take the increased contributions a step further in 2013 as a method to balance the budget. Congress once again proved it had no problem balancing the budget on the backs of federal employees. To many in Congress, federal employees are little more than an ATM-machine.

 

These increased pension contributions came amid pay freezes and furloughs, and added insult to injury as Congress continued its reckless budgeting. 

 

Now, as a result of these numerous increases, federal employees are forced to work in a system that has a tiered retirement system. A federal employee hired in 2014, on average, makes $2,800 less than someone at the same grade and step hired two years prior. New federal employees are treated as second-class, and the inequitable system can create a splintered workplace environment.

 

Representative Edwards’ bill seeks to end this inequity, and would do so by closing tax loopholes provided to corporations that are headquartered overseas.

 

“The pension contribution hikes recently imposed by Congress creates second- and third-class employees and breeds contempt in the workplace,” said NFFE National President William R. Dougan. “Balancing the budget on the backs of federal employees is unacceptable, and Congresswoman Edwards’ bill provides a solid stepping stone to reconcile the floundering workplace morale of federal employees. This bill will be one of NFFE’s top legislative priorities in the 114th Congress.”