Federal budget deal hits worker pensions
12/11/13 03:00 PM—Updated 12/11/13 05:52 PM
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By
Ned Resnikoff
New federal employees are going to feel the sting from the
federal budget deal unveiled on Tuesday. Of the proposed legislation’s nearly $1 trillion in savings, an estimated $6 billion comes out of the pensions of any federal workers hired after Dec. 31, 2013. Those newer workers would have to pay for 4.4% of their retirement benefits, more than five times what older employees would pay.
Shortly before the details of the budget plan were announced, National Treasury Employees Union president Colleen Kelly told msnbc that changing her members’ retirement benefits would be “unacceptable.”
“There are too many in Congress who do not value and respect federal employees and the work they do,” she said. Kelly’s union estimates that federal workers have already lost some $113 billion to deficit-reduction efforts, thanks in part to a
multi-year pay freeze lasting from 2010 to
the end of the 2013 government shutdown.
Many federal employees also lost money to unpaid furlough days as a result of the across-the-board budget cuts known as sequestration. In addition, federal employees hired after 2012 already
contribute more to their own pensions than those hired before, thanks to a bill Congress passed in February of that year. Whereas older hires pay 0.8% of their salaries into the federal retirement system, those hired after the law went into effect contribute 3.1%.
