The take-home pay of 300,000 federal workers will drop nearly 6 percent this week unless the Senate and White House can reach agreement on a supplemental pension plan for persons hired since January 1984.
An interim pension agreement, which required federal employes hired since 1984 to pay for full Social Security coverage but excused them from making full payments to the civil service retirement fund, expires Thursday.
Congressional sources say that unless the White House okays a compromise pension plan -- tentatively approved by the Senate and House -- those new hires will be required to start making full contributions to both the Social Security system and civil service system beginning Thursday. The White House had objected to the cost and early-retirement features of the compromise plan.
The compromise plan would base future benefits on Social Security, a modified civil service pension and earnings on an optional tax-deferred thrift plan. Under that feature, employes could shelter up to 10 percent of their salary each year by putting it into an investment program. The government would match up to 5 percent of those contributions.
The new system would be mandatory for those employes hired since 1984, and it would become optional for persons hired before then who are already covered by the existing civil service pension program. It is designed to go into effect next January -- assuming Congress and the White House approve it.
Pre-1984 federal workers contribute at least 7 percent of their salaries to the civil service retirement fund plus 1.45 percent for Medicare coverage.
Workers hired since 1984 pay the full Social Security tax, 7.15 percent, but they contribute only 1.3 percent of salary to the civil service retirement fund.
If Congress and the White House agree soon on a new retirement plan, Congress will extend the current financing arrangement, meaning no increase in contributions for employes. Otherwise, affected employes will have to make full payments to both systems starting this week, and that would continue until a new retirement package is approved for them. Holiday Furloughs
The American Federation of Government Employees union and the National Federation of Federal Employees are trying to block Agriculture Department plans to furlough 7,000 meat and poultry inspectors on Memorial Day, Independence Day and Labor Day.
The department says the payless holidays are the most painless way to comply with the deficit reduction act without losing actual work time. The unions contend the payless holidays are illegal and bad for morale.
AFGE, exclusive bargaining agent for the employes, is asking a U.S. District Court judge in Philadelphia to block the holiday furlough plan. The NFFE is trying to get the Senate and House Appropriations committees to order Agriculture to find another way to save money. Job Fear Index
The April issue of Federal Career Insights newsletter has an excellent rundown on the hiring, layoff and firing plans of federal agencies. Most federal offices are required by the deficit reduction act to cut their budgets, and many are planning to make the cuts through furloughs, layoffs and/or hiring freezes. If you are concerned about getting, or keeping, a federal job, free copies of the budget outlook issue can be had by calling 281-0200 tomorrow.