This post has been updated.
Contributing more toward civil service retirment benefits, as federal workers could be required to do under legislation being considered in the House, means voluntary retirement savings would take a hit for some federal workers.
Others say the sacrifice would have to come at the expense of something — anything — besides their retirement savings.
Eric Yoder on Monday explained the proposed legislation that would require federal workers to raise their involuntary contributions to retirement benefit funds by 5 percent. As this week’s Federal Buzz question of the week, we asked if raising the required contribution for federal workers would mean they would cut back on saving for retirement in their voluntary Thrift Savings Plans.
“Probably yes, without a raise to offset rising costs.” — Marian Huber, Environmental Protection Agency
“I would definitely not cut back on my TSP contributions. I came to government work late in life (mid-fifties), and TSP is a God-send for me. I’ll never understand why everyone doesn’t take advantage of this program.” — Nina G. Fiore, Government Printing Office
“If forced to contribute more toward retirement benefits, I will take one of a couple of options. I will not contribute to TSP at all, as I will be forced to find a more lucrative position in the private sector.
“This year I was denied a step promotion due to me for longevity and service because the budget could not afford it. My performance was found to be excellent and I did receive a performance award. I cannot take another 5 percent hit in take-home pay.
“Another option open to me is to quit school so I can pay the 5 percent increase in contribution. I am currently going for my master’s degree. I cannot afford to do both. With gas prices as high as they are, my budget is that tight.” Employee , Public Works/Engineering Division, Fort Meade
“If my Federal Employment Retirement System contributions are increased 5 percent I will not decrease my TSP contributions. My FERS pension is so small as it is, I need all the TSP I can get. I will, however, have to cut the money I put in savings to pay for home maintenance and medical care and for other emergencies. There will not be one penny extra in my budget.” Maggie Smith , HQ ARPC/DS, Buckley Air Force Base, Colo.
“My contributions to TSP are the last thing I’ll cut or reduce. As it is I’ve reduced my charitable giving to zero. It was $50 per pay period two years ago, then $25 and now zero just to offset the pay freeze and increases in other deductions. The reduced Social Security deduction has helped but that can’t last. As the deductions per pay-period go up I reduce the money I set aside for entertainment, eating out and non-necessity items. In the end it means more austerity for me and less money I put into the local economy (and forget taking a vacation, we now just hang out in the back yard for barbecue and enjoy our Zoo membership more often).” — James Knowlton , Defense Security Cooperation Agency
“No. I would eliminate my union dues that aren’t worth a hoot.” — Dan Ketter , Department of Defense
“No, but only because I am single and within two to three years of retirement. If the most often proposed version (a gradual increase) is passed, I will probably be gone before it completely takes effect. In any event, the impact, though negative, will be manageable. But I can imagine the thinking of some younger colleagues.” — Joe O’Bryan, Internal Revenue Service
“Dropping my investments in the TSP would just be doubling the damage to myself because the increased contributions don’t come with a corresponding bump in the FERS annuity. I would look toward more discretionary expenses such as restaurant spending and (unfortunately) charity and CFC contributions.” — Leon Rhodes , U.S. Patent Office
How would increasing the required contributions affect you? Tell us on Twitter using #FedBuzz.