Republican Senators Introduce Legislation to Eliminate Federal Pensions


Last week, Senators Richard Burr (R-NC) and Tom Coburn (R-OK) introduced the Public-Private Employee Retirement Parity Act, S. 644, a bill to eliminate federal pensions for all new government hires starting in 2013. Under the deceptively named bill, new employees would no longer receive the pension portion of the Federal Employees Retirement System (FERS). Instead, workers would receive only the Thrift Savings Plan (TSP) portion of FERS in addition to their Social Security.

In a statement released shortly after introducing the bill, Burr claimed that federal retirement benefits are excessive, and must be brought in line with those in the private sector. Unfortunately for Senator Burr, the facts tell a much different tale. When examined closely, it becomes clear that this bill has little to do with parity, and much more to do with unfairly targeting federal employees.

Claims that federal pension benefits are inflated are at best, wrong, and at worst, outright lies. In fact, federal workers’ pensions represent only a modest portion of the larger federal retirement picture. For example, a career federal employee who retires with a final salary of $50,000 dollars per year and 30 years of service will receive a pension of merely $15,000 per year – hardly an exorbitant figure by any measure.

The reason that federal pension benefits are so modest is because they were effectively cut in half in 1983, when the government moved from the old Civil Service Retirement System (CSRS) to FERS. From then onward, new employees received the smaller pension benefit, in addition to the 401(k) style TSP account and Social Security. Often referred to as the “three-legged stool” of federal retirement, these three small pieces coalesce to create the modest retirement plan currently available to government employees.

The result of this legislation would be to destroy federal retirement security and severely hamstring the government’s efforts to recruit the next generation of federal workers. With a retirement wave expected to hit the workforce in the coming years, slashing retirement benefits will make it much more difficult to recruit doctors, intelligence analysts, scientists, and other highly-sought-after workers into the federal service.

“These Senators think they can pit young federal employees against the old,” said Randy Erwin, NFFE Legislative Director. “They want to drive a wedge in the federal workforce so that we will not rise up collectively and make them answer for their shameless attacks on federal employees. But we will not stand for that. An attack on one is an attack on all. We are going to make sure that this divisive piece of legislation goes down in flames.”