House Republicans Revise Proposed Retirement Cuts for Federal Workers

House Republicans have made important changes to legislation affecting federal workers’ retirement benefits, aiming to address backlash from bipartisan lawmakers and public employee groups. The revisions were part of the GOP’s budget reconciliation plan, which seeks to cut federal spending to finance tax cuts and a crackdown on immigration.

Concerns Over Initial Proposals

Previously, the budget proposal included significant cuts to retirement benefits for federal employees, particularly targeting those hired before 2014. These employees had been exempt from contributions mandated by changes implemented in the past decade. The original plan would have required them to contribute 4.4% of their basic pay to the Federal Employees Retirement System (FERS), similar to newer hires.

Other proposed changes included:

• Elimination of the FERS supplement for early retirees before age 62.
• A shift in how annuities are calculated—from the highest three years of salary to the highest five years.
• New federal employees being forced to choose between at-will employment with no civil service protections and contributing nearly 10% of their salary toward their pension.

Such proposals generated considerable criticism from federal employees and their representatives, who argued that these changes would unfairly reduce benefits for individuals who had already earned their pensions.

Key Amendments Made

In response to the outcry, House Republicans announced modifications to the bill that parse out some controversial provisions. The most notable changes include:

• Retention of Existing Benefits: The plan to un-grandfather employees hired before 2014 has been dropped. This means they will not be required to increase their contributions.

• FERS Supplement Exemption: The exemption for federal workers needing to retire early has been broadened. Now, all employees who face mandatory retirement will retain access to the FERS supplement, regardless of whether they are forcibly retired due to age.

• Implementation Date Adjusted: The implementation date for these changes has shifted from the enactment of the bill to January 1, 2028. This adjustment allows employees to maintain eligibility for their earned benefits until that date.

• Delaying Annuity Calculations Change: The transition from the high-3 to high-5 average salary model for calculating annuities has also been delayed by one year, set for January 1, 2028. ## Reactions from Stakeholders

John Hatton, staff vice president for the National Active and Retired Federal Employees Association, acknowledged the revisions as a positive step. However, he emphasized the need for further protections for employees who have already invested in their retirement benefits. He stated, "While it’s definitely an improvement, the elimination of the FERS supplement and the high-5 proposal still disrupts promises made to federal retirees."

Rep. Mike Turner (R-Ohio) had previously indicated his opposition to the initial proposal due to concerns over benefits for long-serving public employees. His comments highlight the growing recognition among lawmakers of the importance of ensuring fair treatment for federal workers who have diligently contributed to their retirement plans.

Next Steps in Legislation

As the revised reconciliation package moves forward, it will undergo further discussion and voting in the House. Lawmakers will continue to negotiate the balance between fiscal responsibility and the rights of federal workers, as public sentiment remains a significant component of the decision-making process.

Overall, this situation underscores the ongoing dialogue surrounding federal employment policies, financing, and the need to safeguard the interests of public servants who’ve dedicated their careers to serving the nation.

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