Elimination of Federal pensions by 2013

Sen. Richard Burr, R-N.C., on Thursday introduced a bill (S. 644) that would eliminate the pension portion of the Federal Employees Retirement System for all new government hires beginning in 2013. The legislation would not affect Thrift Savings Plan benefits and agency-matching contributions. Nor would it affect FERS pensions for current federal employees and retirees. It would, however, apply to members of Congress.

"Right now, federal government workers receive far more generous retirement benefits than private sector employees," Burr said. "The cost to taxpayers of these benefits is unsustainable, and we simply cannot afford it. We cannot ask taxpayers to continue to foot the bill for public employee benefits that are far more generous than their own."

Federal employees are eligible for pensions, retirement savings plans with up to 5 percent in matching contribution and retiree health care benefits above and beyond those available to private sector workers, according to Burr. He also asserted that FERS is underfunded by almost $1 billion and the Civil Service Retirement System by $673 billion.

According to Tom Trabucco, director of external affairs for the Federal Retirement Thrift Investment Board, the agency match for FERS participants is dollar for dollar on the first 3 percent of pay contributed to the TSP, and 50 cents on the fourth and fifth percentage points contributed. Agencies also automatically put in 1 percent of basic pay for all new FERS enrollees regardless of the employee contribution. He noted, however, that the arrangement is not equal to a 5 percent total match.

The assertion that federal pension programs are underfunded is rejected by John Gage, national president of the American Federation of Government Employees, who called the bill "cruel and useless."

"Sen. Burr is wrong on the facts and wrong on morals," Gage said. "Eliminating pensions for future employees would do absolutely nothing for the fictional unfunded liabilities that the fact-challenged senator imagines he is resolving. Worse, Sen. Burr's bill is a mean-spirited attempt to deprive future employees of any hope of a dignified retirement after they have spent a lifetime in public service."

By Emily Long elong@govexec.com March 18, 2011