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”

Republican Senators Propose Eliminating New Feds’ Pensions

Republican Senators Propose Eliminating New Feds’ Pensions

The Public-Private Employees Retirement Parity Act was introduced by Sens. Tom Coburn, R-Okla. (left); Richard Burr, R-N.C.; and Saxby Chambliss, R-Ga. (not pictured)
The Public-Private Employees Retirement Parity Act was introduced by Sens. Tom Coburn, R-Okla. (left); Richard Burr, R-N.C.; and Saxby Chambliss, R-Ga. (not pictured) J. Scott Applewhite/AP

A group of Republican senators has introduced a bill to slash retirement pensions for new federal employees, saying the current system unfairly compensates public-sector workers as compared to their private-sector counterparts.

The Public-Private Employees Retirement Parity Act, introduced by Sens. Richard Burr, R-N.C.; Saxby Chambliss, R-Ga.; and Tom Coburn, R-Okla., would eliminate the defined benefit portion of the Federal Employees Retirement System for all new government workers hired six months after its enactment. New employees would still receive matching agency contributions into their Thrift Savings Plan of up to 5 percent.

“Right now, federal government workers receive far more generous retirement benefits than private-sector employees,” said Burr, who sponsored a similar bill in 2011 that never made it out of committee. “The cost to taxpayers of these benefits is unsustainable and we simply cannot afford it. We cannot ask taxpayers to continue to foot the bill for public employee benefits that are far more generous than their own.”

Continue reading “Republican Senators Propose Eliminating New Feds’ Pensions”

Thousands of Feds Withdrew Retirement Investments During Shutdown

Thousands of Feds Withdrew Retirement Investments During Shutdown

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Federal employees turned to their retirement investments for cash during the government shutdown, with thousands of workers taking hardship withdrawals to support themselves through the unpaid period.

Nearly 3,000 more feds withdrew from their Thrift Saving Plans during the shutdown than did in October of 2012, officials said at a Federal Retirement Thrift Investment Board meeting Monday. When the shutdown began, roughly 900,000 federal employees were unsure if they would get paid for the time they missed, though Congress has since agreed to issue retroactive pay to the furloughed workers. Employees required to work during the shutdown also did not receive pay until the government reopened, though they were guaranteed back pay from the outset.

Furloughed federal employees were prohibited from contributing to their TSPs during the shutdown, but those contributions will be paid retroactively as a result of the back pay. The workers were allowed to make withdrawals of at least $1,000 due to “financial hardship.” Continue reading “Thousands of Feds Withdrew Retirement Investments During Shutdown”

Furloughs and Your Retirement

Well, it’s furlough time — or, as my friend Herb Hayes calls it, “furl-ouch.” Suddenly, every day feels like a snow day. But where I live in Northern Virginia, the sun is shining and it’s as hot as a summer day in mid-July. When government shutdowns happen, it is not as much fun to have a day off as some people seem to think. The emotions are many: fear (will I be paid?), curiosity (how is everyone handling the situation?), and anger (why would our government allow this to happen?).

While I’m not currently a federal employee, I am a government contractor who also is affected, because there are no employees at work to attend my pre-retirement seminars. I always try to look on the bright side of any situation, but there are many people — feds as well as those who depend on the government to stay in business — that will not see any bright side to this situation. Continue reading

Feds Furloughed By Shutdown Cannot Contribute to Retirement Fund

Feds Furloughed By Shutdown Cannot Contribute to Retirement Fund

Kenishirotie/Shutterstock.com

Federal employees forced onto unpaid leave due to a government shutdown must cease payments into their federal retirement plan accounts upon entering non-pay status.

Employee contributions into the Thrift Savings Plan must come from payroll deductions, meaning employees on furlough cannot make payments into their plans. Agencies are also prohibited from matching contributions into their employees’ plans during this time.    Continue reading “Feds Furloughed By Shutdown Cannot Contribute to Retirement Fund”