GOP plan would end defined-benefit pension for future feds

November 15, 2013

Updated 3:53 p.m., Nov. 15.

A group of Republican senators this week proposed legislation to end the defined-benefit pension program for future federal employees and lawmakers.

Sen. Tom Coburn (R-Okla.) -- Melina Mara/Washington Post.
Sen. Tom Coburn (R-Okla.) (Melina Mara/The Washington Post)

The measure, introduced by Sens. Tom Coburn (Okla.), Richard Burr (N.C.) and Saxby Chambliss (Ga.), would only affect new hires who start work six months after the bill’s potential enactment.

The lawmakers pitched the legislation as a way of reducing projected spending and achieving parity between public- and private-sector workers, saying the government provides federal employees with greater retirement benefits than those typically available these days outside of civil service.

“We cannot ask taxpayers to continue to foot the bill for public employee benefits that are far more generous than their own,” Burr said in a joint statement from the senators.

Under the bill, retirement benefits for affected workers would include the Thrift Savings Plan — similar to a 401(k) program — and monthly Social Security payments.

Current federal employees are promised those benefits, plus a pension that pays 1.1 percent of their top-three consecutive years of pay multiplied by the number of years served. Workers hired before 2012 contribute 0.8 percent of their salary toward their plans, while those hired later give 3.1 percent.

The federal-employee pension programs are underfunded by $673 billion, according to a 2012 report from the nonpartisan Congressional Research Service. However, the Office of Personnel Management has projected that the balances are growing and will ultimately reach about 20 times the amount of the annual benefit payments, meaning the programs are not in danger of becoming insolvent.

In a statement on Friday, American Federation of Government Employees national president J. David Cox described the GOP bill as a “a mean-spirited legislative proposal” that would “deprive future federal workers of any hope of a dignified retirement after they have spent a lifetime in public service.”

“If these lawmakers really were interested in having parity among public and private-sector employees, they would be encouraging more companies to offer pensions to their workers instead of trying to take them away from federal employees,” Cox added.

National Treasury Employees Union president Colleen M. Kelley also issued a statement opposing the plan, saying it would be “a significant step backward for a nation whose population already faces a retirement savings crisis.”

“It is well-documented that Americans are not saving enough for retirement, and we should not be taking any steps to make that problem more difficult for working people,” Kelley said.

Follow Josh Hicks on TwitterFacebook or Google+. Connect by e-mail at  josh.hicks@washpost.comVisit The Federal Eye, The Fed Page and Post Politics for more federal news. E-mail federalworker@washpost.com with news tips and other suggestions.

Josh Hicks covers the federal government and anchors the Federal Eye blog. He reported for newspapers in the Detroit and Seattle suburbs before joining the Post as a contributor to Glenn Kessler’s Fact Checker blog in 2011.
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