The nation's federal employes would be required to increase their contributions to their pension system from 7 to 11 percent of their salaries by 1985 and wait until age 65 to retire without penalty, under the Reagan administration's 1984 budget proposals.
High administration officials also said yesterday that the budget calls for the government to reduce its contribution to the Civil Service retirement system from the current 30 percent of payroll costs to 11 percent, which would save an estimated $16 billion over the next five years. The savings are to be achieved through reductions in cost-of-living adjustments, the phased-in scale-back of the current retirement age of 55 and a tightening of the formula for calculating the level of annuity benefits.
The proposal, coming on top of a separate plan to place all new federal employes in the Social Security System, is expected to face massive opposition from federal employe groups and run into heavy going on Capitol Hill.
"I don't think anybody on the Hill even takes them seriously," said Stephen Skardon, legislative director of the National Association of Retired Federal Employes. "They'll be about as popular as Attila the Hun."
"The whole package can't possibly go through and the administration knows it," said a Republican staffer in Congress. "They're just throwing out a bunch of killers and hoping they'll get some of them."
The details of the plan, according to sources in the administration and Congress:
* Federal employes, who currently pay 7 percent of their salary into their pension system, would have their payments upped to 9 percent in fiscal 1984 and 11 percent in fiscal 1985.
* Anyone retiring before age 65 would have 5 percent of the annuity to which he is otherwise entitled deducted for each year under 65.
This new minimum retirement age would be phased in over 10 years. Thus, for example, a federal worker aged 54 now with 29 years of service would face only a 5 percent penalty for retiring at age 55.
Someone aged 53 would face a 10 percent penalty, and so on. Someone now aged 45 would face the full 50 percent penalty if he wanted to retire in 10 years at age 55.
* The annuity benefits would be calculated as a percentage of the highest consecutive five years of salary rather than the current three highest. This change is expected to occur in three years.
* There would be a freeze on cost-of-living adjustments (COLA) for all current annuitants in fiscal 1984. After that, details of COLA cutbacks are sketchy. Some sources say future COLAs will be reduced to one-half of the consumer price index for all annuitants, others say the reduction to one-half of the CPI will apply only to annuitants under age 62.
* There may also be another kind of reduction in the formula for setting the level of annuity benefits. Currently, federal employes receive pensions based on 1.5 percent of their highest three salary years for the first five years of employment, 1.75 percent for years 6-10, and 2 percent for all years after that.
Some sources said yesterday that the replacement percentage would be reduced to a constant 1.5 percent for all years worked, but it was not clear if that proposal would be included in the final budget document.
The expected legislative donnybrook over these proposals will be delayed by the fight this spring over the Social Security funding package, which calls for, among other things, including all new federal employes in that system.
The Civil Service retirement system is 63 years old, but its cost to the government has been growing astronomically in the past dozen years, in part to make up for earlier underfunding.
In 1968, the government budgeted just $1.4 billion for the Civil Service retirement system; in 1981, the cost had ballooned to $18.4 billion, and by 1986, without any changes, it is expected to exceed $30 billion.
The fund pays benefits to more than 1.3 million federal and postal retirees and their survivors, including about 63,000 in the Washington area. More than 2.8 million government workers, including 342,000 here, currently pay into the system.