Panel debates cuts to federal retirement benefits

A House panel continued debate Wednesday on plans to tighten up pensions for both federal workers and members of Congress.

Proposals to cut a defined pension plan under the Federal Employees Retirement System drew the ire of congressional Democrats and labor union groups, while suggested reductions to lawmaker benefits were more warmly received at a House Oversight and Government Reform Subcommittee on the federal workforce Wednesday.

"It is clear that the federal taxpayer cannot afford the current federal pension cost structure in the long term," said Rep. Dennis Ross, R-Fla.

The current FERS defined benefit pension is calculated by taking the retiree's three highest salaries and dividing it by years of service and a variable pension accrual rate. That rate is currently 1.1 percent for federal employees and 1.7 percent for members of Congress.

Under Ross' plan, which was discussed Wednesday, that number would change to 0.7 percent for FERS employees. This would apply only to future employees. Ross also supports basing federal workforce annuities on an employee's average salary over five years instead of three years.

Labor unions representing federal workers argued the proposals amounted to more efforts by House Republicans to shield wealthy Americans from contributing to deficit reduction efforts.

Noting a $60 billion contribution to deficit reduction from federal workers over the next 10 years and continuing federal pay freezes, National Treasury Employees Union President Colleen M. Kelley said increasing pension contributions for federal workers would "defeat the purpose" of the stimulus generated by a payroll tax holiday.

"Before other groups have even contributed a dime to deficit reduction efforts, some in Congress have returned to attack the federal pension system and attempt to squeeze an additional $65 billion in cuts from this middle-class group of taxpayers," Kelley said in testimony submitted Wednesday.

American Federation of Government Workers President John Gage issued a statement arguing that FERS is fully funded and "poses no additional tax burden on the American public."

"Congressman Ross is right about one thing -- the American public is outraged," Gage said in a statement. "They're outraged by lawmakers who are more worried about protecting their millionaire and billionaire campaign donors than creating jobs for the millions of unemployed workers."

Rep. Stephen Lynch, D-Mass., noted that although President Obama has favored increasing the amount civilian federal employees contribute to their own pensions as part of his deficit reduction proposal, "he introduced those ideas in the context of asking the wealthiest in this country also to kick in, to pay a little bit more."

Lynch said he was in favor of proposals that slimmed pensions for lawmakers, a number of which were introduced at Wednesday's hearing. The crux of Rep. Ross' plan also pledges to make lawmakers "equal to rest of the workforce," Fred Piccolo, a spokesman for Ross told Government Executive.

Under the Ross plan, the government would contribute 4 percent less to a lawmakers' salary, Piccolo said. Other proposals introduced Wednesday by committee members include a bill that would give lawmakers a choice to participate in the Thrift Savings Plan without a matching taxpayer contribution; one that ensures lawmakers who commit felonies do not receive pension benefits; and one that would end congressional defined benefit pension plans for future and recently elected but not yet vested members of Congress.

Piccolo said the committee is still waiting for "Senate leadership" on the proposals.

CORRECTION: An earlier version of this story suggested President Obama mentioned federal pensions in his State of the Union address; he did not.