Heather Curtis
WMAL.com
WASHINGTON – Federal employees will be paying more towards their retirements if President Donald Trump’s proposed budget passes. The president will present a budget next Tuesday that includes a 2 percent raise for federal employees but numerous cuts to retirement benefits.
If Congress passes the president’s budget, federal workers would contribute more each year to the Federal Employee Retirement System until their contributions equal those made by the government. Cost of living adjustments would be eliminated for employees in that system. FERS employees who retire in 2018 or after would no longer get supplemental payments, which give people who retire before 62 benefits that equal Social Security payments.
“What it’s translating to is that the federal government is doing what the private sector has been doing for many years – shifting the burden of retirement to individual employees. In other words, you really can’t rely on your employer for your future financial security. The burden is on you,” said WMAL financial advisor Ric Edelman who runs Edelman Financial Services, LLC.
The Congressional Budget Office said retirement benefits for the majority of federal workers are significantly higher than they are for people who work in the private sector.
“The federal compensation system is not overly generous and employees do not get wealthy. They are true public servants who diligently do their jobs and are too often portrayed as taking advantage of a system that has denied them pay increases and raised their retirement contributions with no increase in benefits,” the president of the National Treasury Employees Union Tony Reardon told the House Committee on Oversight and Government Reform at a hearing Thursday.
Congressman Gerry Connolly (D-VA) is alarmed by the proposed cuts, especially at a time when one-third of the existing federal workforce will be eligible for retirement in the next four years. He believes cutting retirement benefits will make it more difficult to attract the federal workforce of the future.
Edelman said it’s possible that fewer people will want to take federal jobs if the benefits aren’t as good but believes the government may need to make up for that by paying more to attract qualified people. He added there are some people who are willing to take less compensation because they want to serve the public by working for the government.
“If Ric Edelman believes that, then I look forward to his volunteering to serve under these conditions. I’m sure he’ll give up his private sector benefits and come do public service with his pension under assault, with his compensation frozen with more limitations on his workplace,” Connolly responded.
The congressman hopes Congress carefully considers the cuts and decides against them, but Republicans have been pushing for these kinds of cuts for years.
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