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”

CBO Mandatory Spending—Option 10 Reduce the Amounts of Federal Pensions

Congressional Budget Office

Supporting the congress since 1975

November 13, 2013

OPTIONS FOR REDUCING THE DEFICIT: 2014 TO 2023

Mandatory Spending—Option 10

Function 600 – Income Security

Reduce the Amounts of Federal Pensions

(Billions of dollars) 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2014-2018 2014-2023
Change in Outlays
Military retirement 0 * * -0.1 -0.1 -0.2 -0.3 -0.4 -0.5 -0.6 -0.2 -2.1
CSRS and FERS 0 * -0.1 -0.2 -0.2 -0.4 -0.5 -0.6 -0.7 -0.8 -0.5 -3.5
Total 0 * -0.1 -0.2 -0.4 -0.5 -0.7 -1.0 -1.2 -1.3 -0.8 -5.5

Notes: This option would take effect in January 2015.

* = between -$50 million and zero; CSRS = Civil Service Retirement System; FERS = Federal Employees Retirement System. Continue reading “CBO Mandatory Spending—Option 10 Reduce the Amounts of Federal Pensions”

Federal Budget: 10 Cuts That Would Save the Most

The Fiscal Times

Federal Budget: 10 Cuts That Would Save the Most

By Brianna Ehley December 6, 2013 4:45 AM

The clock is ticking on the Congressional Budget Conference Committee, which only has eight days left to cobble together a budget before the Dec. 13 deadline. And though lawmakers have signaled that they are close to a deal, nothing is certain.

Budgeteers in both parties are aiming for a deal that cancels the second wave of sequester cuts authorized under the Budget Control Act of 2011. To undo those cuts, they’ll have to find savings in other areas. Some potential elements in the emerging deal include raising federal employees’ contributions to their pension funds, or having the Federal Communications Commission auction rights to electromagnetic spectrum, according to congressional aides.

Related: Enter New Budget Deal, Exit Loathsome Sequester

As difficult as it may be for Republicans and Democrats to agree on a narrow package to replace the sequester cuts, much more difficult choices lay ahead. As the Congressional Budget Office put it in a report released last month: “To put the federal budget on a sustainable long-term path, lawmakers would need to make significant policy changes—allowing revenues to rise more than would occur under current law, reducing spending for large benefit programs to amounts below those currently projected, or adopting some combination of those approaches.” Continue reading “Federal Budget: 10 Cuts That Would Save the Most”

Feds’ Tension Over Possible Pension Changes Escalates

Feds’ Tension Over Possible Pension Changes Escalates

Sen. Ben Cardin, D-Md.
Sen. Ben Cardin, D-Md. Carolyn Kaster/AP

Federal employees will find out this week — as soon as Tuesday — whether budget negotiators plan to push for changes to their pension benefits as part of a deal to offset some of the sequester spending cuts.

The congressional budget conference committee led by Rep. Paul Ryan, R-Wis., and Sen. Patty Murray, D-Wash., has until Dec. 13 to present its recommendations for rolling back the automatic spending cuts and extending the continuing resolution funding the government through Jan. 15, 2014. A “small” deal, rather than a grand bargain over tax and entitlement reforms, is expected; the panel is considering requiring federal employees to contribute 1.2 percent more to their pensions, which would save about $20 billion over 10 years, according to the White House and the Congressional Budget Office. The committee reportedly would use those savings to help pay for a partial repeal of the sequester. Continue reading “Feds’ Tension Over Possible Pension Changes Escalates”

Impact of budgetary hit to federal retirement weighed

Impact of budgetary hit to federal retirement weighed

Requiring federal employees to pay more toward their retirement benefits would have an uncertain effect on recruitment of new workers but likely would spur some current employees to leave earlier than they would have otherwise, according to a recent analysis done for Congress.

Increasing the required contributions, and the potential impact of doing so, has been under consideration in negotiations over budget levels for the remainder of the current government fiscal year and for fiscal 2015.