CBO —Option 36 Increase Federal Civilian Employees’ Contributions to Their Pensions

OPTIONS FOR REDUCING THE DEFICIT: 2014 TO 2023

Revenues—Option 36

Increase Federal Civilian Employees’ Contributions to Their Pensions

(Billions of dollars) 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2014-2018 2014-2023
Change in Revenues 0.6 1.4 2.1 2.2 2.2 2.2 2.2 2.2 2.1 2.1 8.5 19.3

Note: This option would take effect in January 2014.

The federal government provides most of its civilian employees with an annuity in retirement through either the Federal Employees Retirement System (FERS) or its predecessor, the Civil Service Retirement System (CSRS). Those annuities are jointly funded by the employees and the federal agencies that hire them. About 85 percent of federal employees participate in FERS, and most of them contribute 0.8 percent of their salary toward their future annuities. The Middle Class Tax Relief and Job Creation Act of 2012 increased the contribution rate to 3.1 percent for most employees hired after December 31, 2012. Federal employees who are still covered by CSRS generally contribute 7 percent of their salary and accrue larger annuities. Agency contributions for FERS and CSRS do not have any effect on total federal spending or revenues because they are intragovernmental payments, but employee contributions are counted as federal revenues. (Annuity payments made to FERS and CSRS beneficiaries represent federal spending.) Continue reading “CBO —Option 36 Increase Federal Civilian Employees’ Contributions to Their Pensions”

President of Largest Federal Union Expresses Outrage Over Increase in Contractor Compensation Cap

President of Largest Federal Union Expresses Outrage Over Increase in Contractor Compensation Cap

Taxpayers can be billed $952,000 per contractor employee under new rule

WASHINGTON – American Federation of Government Employees National President J. David Cox Sr. today expressed his outrage at the news that the cap on annual compensation paid to contractor employees using taxpayer dollars has been increased to an astounding $952,000.

The new limit announced by the Office of Management and Budget reflects a one-year increase of nearly $190,000 and a four-year increase of 55 percent. The compensation cap has nearly quadrupled since the mid-1990s.

“Christmas has come early for federal contractor employees, yet the government’s own employees are looking at stockings full of coal,” Cox said. Continue reading “President of Largest Federal Union Expresses Outrage Over Increase in Contractor Compensation Cap”