Mixed Reviews for Proposed Pension Contribution Hikes
- By Eric Katz December 12, 2013
The budget deal has been struck.
To review, the compromise package to roll back sequestration cuts required by the 2011 Budget Control Act for two years targets federal employees’ pensions as expected. While current workers were spared, civil servants hired after 2013 would pay 4.4 percent of their annual salaries toward their defined retirement benefit. This marks a 1.3 percent increase from the current contribution requirement for new hires, though any employee hired in or before 2012 pays only 0.8 percent of their salary toward their pension.
Military retirees’ pensions would also take a hit, as the deal requires a less generous annual cost of living adjustment. Overall, the plan takes $12 billion in savings from federal workers. Continue reading “Mixed Reviews for Proposed Pension Contribution Hikes”