Federal employees' 3.6 percent average raises in 1999 will be offset slightly by increases in employees' payroll reductions for their retirement plans.
Under the 1997 Balanced Budget Act, all federal employees covered by the Civil Service Retirement System (CSRS) and the Federal Employees Retirement System (FERS) will pay 0.25 percent more of their basic pay toward retirement each pay period in 1999. For most FERS employees, that means an increase from 0.8 percent to 1.05 percent of basic pay. For most CSRS employees, that means an increase from 7 percent to 7.25 percent of basic pay.
Federal employees will see the change reflected in their checks for the first pay period beginning on or after Jan. 1, 1999.
A GS-13, step 1, manager, for example, will see payroll deductions totaling $134 more in 1999 than he or she would have if the change did not go into effect.
Under the Balanced Budget Act, deductions will increase an additional 0.15 percent in 2000 and another 0.1 percent in 2001. The increases are only a temporary budget-cutting measure. On Jan. 1, 2003, the withholding rates for both CSRS and FERS employees are supposed to revert back to their current rates.
Payroll deductions vary for law enforcement officers, air traffic controllers, congressional employees and some other special groups. Deductions for special groups under FERS are 0.5 percent higher than other FERS enrollees, while deductions for special groups under CSRS are as much as 1 percent higher than other CSRS enrollees.
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