Senators urge OPM not to cut retirement benefits for federal workforce

Senator Urge OPM Director Not to Balance Budget On Backs of Federal Workforce

WASHINGTON – U.S. Sen. Mark R. Warner (D-VA) and a group of 25 Senators wrote a letter to Director of the Office of Personnel Management (OPM) Jeff Pon, urging the Trump Administration not to cut retirement benefits for the nation’s federal workforce. This letter comes after OPM Director Pon outlined an Administration plan to freeze federal employee pay and cut retirement benefits for 2.6 million federal retirees and survivors over the next ten years.

“Together, the proposals you have made would cut $143 billion over ten years from federal employee retirement programs, while offering nothing to employees in their place. We fear that these cuts are motivated by an ongoing effort to balance the budget on the backs of federal workers rather than an effort to provide a comprehensive approach to modernizing federal employee compensation,” the Senators wrote in the letter.

“As you continue to develop legislative proposals related to the compensation of federal employees, we urge you to move past draconian cuts that harm the financial security of federal employees in every state across the country, and instead commit to comprehensive reforms that modernize our government’s compensation system in a way that encourages the best and brightest talent to join the ranks of our dedicated civil servants,” the Senators concluded.

Joining Sen. Warner on the letter are Sens. Tim Kaine (D-VA), Tom Carper (D-DE), Mazie Hirono (D-HI), Elizabeth Warren (D-MA), Cory Booker (D-NJ), Sherrod Brown (D-OH), Chris Van Hollen (D-MD), Patty Murray (D-WA), Chris Coons (D-CT), Richard Blumenthal (D-CT), Kirsten Gillibrand (D-NY), Ed Markey (D-MA), Jeanne Shaheen (D-NH), Brian Schatz (D-HI), Dianne Feinstein (D-CA), Claire McCaskill (D-MO), Maggie Hassan (D-NH), Jack Reed (D-RI), Bernie Sanders (I-VT), Tom Udall (D-NM), Bob Menendez (D-NJ), Tammy Duckworth (D-IL), Ben Cardin (D-MD), Heidi Heitkamp (D-ND), and Martin Heinrich (D-NM).

The text of the letter can be found below …

The Honorable Jeff T.H. Pon
Director
Office of Personnel Management
1900 E Street, NW
Washington DC 201415

Dear Director Pon:

We write to you opposing the changes to federal employee retirement benefits included in your May 4, 2018 letter to Speaker Paul Ryan, and to voice our strong concern for the impact these proposals would have on the financial planning of active and retired federal employees and on the federal government’s ability to recruit and retain a strong civilian workforce.

Your letter calls for increased Federal Employee Retirement System (FERS) contributions from employees, eliminating the FERS supplement for employees who retire beginning in 2018, basing retirement calculations on the average of the highest 5 years of salary instead of the current 3, and reducing or eliminating cost-of-living adjustments. These proposals affect employees who have dedicated decades of service to the federal government, and in the case of the FERS supplement, employees who are required to retire early because of the physical demands of their job, including Customs and Border Protection Officers, firefighters, and air traffic controllers. It is clear that they would reduce the ability of employees to save going forward and significantly alter the financial planning of federal workers, retirees, and their families.

Our understanding is that your justification for these proposals is to bring federal employee compensation in line with the private sector. The President’s FY19 Budget justification for these proposals states that federal employees are compensated with combined pay and benefits higher than the private sector, relying solely on an April 2017 Congressional Budget Office (CBO) Report. This is a gross oversimplification of the findings and implications of that report. The report concludes that total compensation costs among workers with a professional degree or doctorate were actually 18 percent lower for federal employees than for similar private-sector employees. To further increase this differential would hamper our ability to hire experts in mission-critical areas. Furthermore, CBO states that the scope of their analysis is limited to selected benefits, and does not include, for example, the stock options that some private-sector firms provide to their employees.

Together, the proposals you have made would cut $143 billion over ten years from federal employee retirement programs, while offering nothing to employees in their place. We fear that these cuts are motivated by an ongoing effort to balance the budget on the backs of federal workers rather than an effort to provide a comprehensive approach to modernizing federal employee compensation.

We are also concerned about the effects that these cuts would have on the federal government’s ability to recruit and retain top talent at agencies across the United States. As you know, just 17 percent of federal workers are under 35 years old, and nearly one-third of permanent career federal employees will be eligible to retire next year. At the same time, the 2017 Federal Employee Viewpoint Survey, a government wide survey conducted by the Office of Personnel Management, found that only 42 percent of federal employees feel they can recruit people with the right skills. In the face of a potential brain drain from our federal agencies, and in a time where top talent has a wide variety of options for global employment, we feel strongly that the impact of across-the-board pay freezes and continued threats to earned benefits will be devastating to retention and recruitment. Modernizing the federal workforce and the package of benefits offered to our federal employees is a worthy goal; however, if enacted, these proposals would not be a modernization, but would instead reverse course by making the federal government a less attractive place to work.

As you continue to develop legislative proposals related to the compensation of federal employees, we urge you to move past draconian cuts that harm the financial security of federal employees in every state across the country, and instead commit to comprehensive reforms that modernize our government’s compensation system in a way that encourages the best and brightest talent to join the ranks of our dedicated civil servants. We would welcome the opportunity to work with you in accomplishing that important goal.

 

Sincerely,

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Benefits: These retirement cut proposals threaten millions of federal workers

Dan Caplinger, The Motley Fool Published 10:00 a.m. ET June 12, 2018

The number one company for pay and benefits is…Costco! Elizabeth Keatinge has more. Buzz60
Find out how the White House is looking to make major benefit cuts.
There’s a lot of debate about the differences in working conditions that public-sector and private-sector workers face. Some private-sector workers who have seen many of their employee benefits deteriorate or disappear entirely over the years believe their public-sector counterparts get benefit packages that are too expensive for taxpayers to maintain. Public-sector employees can point to base salaries that have historically often been lower than what they could make in the private sector as a justification for additional benefits to make up the difference.  Recently, the White House issued a new threat to federal worker benefits that added to the controversy. A letter [opens PDF] from the director of the administration’s U.S. Office of Personnel Management to House Speaker Paul Ryan laid out a series of proposals for legislation that would make reductions to many of the retirement benefits that federal workers who are eligible for the Civil Service Retirement System (CSRS) or Federal Employees Retirement System (FERS) receive. The moves would help to narrow budget deficits, but opponents argue that federal workers have already sacrificed through pay freezes and compensation adjustments that have lagged what their private-sector counterparts receive. Here’s a closer look at the four proposals that lawmakers might consider in the near future.

1. Requiring larger employee contributions toward benefits
Historically, many private-sector companies offered pension benefits that employees didn’t have to pay for with contributions of their own. Many employers have simply phased those pensions out in favor of 401(k) plans that put more of the onus on retirement saving on the worker. However, public-sector pensions often call for at least modest employee contributions to support payments. Currently, most longer-tenured employees who are part of FERS pay 0.8% of their pay into the program, with those hired after 2012 paying either 3.1% or 4.4%.

Under the proposal, employees under FERS would see their contribution percentages rise by 1 percentage point per year until they reached 7.25% of pay. That works out to half of the total pension cost of 14.5% under the program. That matches up with the way Social Security payroll taxes are allocated 50/50 between employee and employer, but over time, the fact that some workers would pay an additional 6.45% of their salaries would lead to effective pay cuts of thousands of dollars each year while leaving actual benefit payouts unchanged. This measure would cut deficits by an estimated $69 billion over the next 10 years, with further savings beyond that point.

2. Lengthening the calculation period for determining pension amounts
Under current law, CSRS and FERS workers have their pension benefits determined by taking the highest average annual amount of pay over a consecutive three-year period, typically at the end of their careers when most workers’ earnings are highest. The new proposal would lengthen that period, requiring averages taken over a consecutive five-year period.

The result of the longer calculation period will generally be to reduce the average, which in turn would lead to a lower starting payout that will then persist throughout retirement. Proponents of the measure can point to the way Social Security calculates benefits using a full 35-year earnings history rather than the latest few years, although pensions in the private sector have historically determined benefits in a manner similar to the current public pension rules. The measure would save an estimated $6 billion over the next 10 years.

3. Cutting cost of living adjustments for pensions
Just as Social Security has cost of living adjustments for retirees, pension benefits for federal workers currently are increased along with the rate of inflation. This helps to ensure that those payments keep up with the regular living expenses that recipients face.

The proposal would reduce CSRS cost of living adjustments by half a percentage point and eliminate them entirely for FERS benefits. The total reduction in benefits would amount to an estimated $50 billion over the next decade, with further savings expected beyond that point.

4. Elimination of supplemental annuities
FERS provides some workers with supplemental annuity benefits if they leave service before turning 62 and becoming eligible for Social Security benefits. The supplement is intended to approximate what a corresponding Social Security benefit would be. The proposal would eliminate most of these payments, resulting in about $19 billion in savings over the next 10 years.

Look to Washington
The White House only has the ability to suggest legislation, not to pass it, so it’s now up to the House to decide what the next steps for these proposals will be. With many calling for deficit reduction, it’s likely that these or similar proposals will find their way into bills considered by legislators. Federal workers will likely fight the proposals hard, but it’s certainly possible that they’ll have to endure these cuts if their proponents successfully navigate opposition in Congress to get those bills passed.  If you’re like most Americans, you’re a few years (or more) behind on your retirement savings. But a handful of little-known “Social Security secrets” could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $16,728 more…each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we’re all after. Simply click here to discover how to learn more about these strategies.

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OPM Proposes Legislation to Cut Retirement Benefits for Current and Former Feds

OPM Proposes Legislation to Cut Retirement Benefits for Current and Former Feds  Posted on May 8, 2018 by postal
Office of Personnel Management Director Jeff Pon wrote a letter to House Speaker Paul Ryan late last week requesting a number of legislative changes that would cut retirement benefits for federal workers.
The request, which Pon said would save taxpayers $143.5 billion over the next decade, comes on the eve of the White House’s planned introduction of $15 billion in spending cuts as part of a rescission package. Pon said his plans, which are a laundry list of previously proposed cuts to federal employee retirement programs, would “bring federal benefits more in line with the private sector.”
Pon wrote that the proposed changes reflect the move by private sector businesses away from defined-benefit pensions in recent years.
source:  Largest Federal Union Assails Trump Administration’s Latest Attack on Working People
Hiding wage and retirement cuts in defense bill is politics at its worst
WASHINGTON – American Federation of Government Employees National President J. David Cox Sr. issued the following statement in response to new legislative proposals that the Office of Personnel Management has submitted to Congress:
“President Trump’s war on working people knows no limits. As Wall Street shareholders are reporting record profits and the wealthiest 1 percent are basking in their massive tax cuts, President Trump believes the career employees who keep the government running deserve another cut, this time to their retirement.
“Federal offices across the country are struggling to recruit and retain workers because federal wages and benefits are falling further behind the private sector. Yet the Trump administration wants to freeze employees’ wages next year and now is proposing to take away the retirement benefits they’ve worked a lifetime to earn.  “Legislative proposals submitted to Congress by Office of Personnel Management Director Jeff Pon would cut $143.5 billion in wages and benefits from current and retired workers over the next 10 years. That’s on top of the $246 billion in cuts to wages and benefits that have been made this decade, including next year’s proposed pay freeze.
“These proposed cuts come at a time when federal employees lag further and further behind their private-sector counterparts in comparative compensation. Federal employees today bring home 5 percent less than they did at the start of the decade, when adjusted for inflation, and they earn roughly one-third less than they would make doing comparable work in the private sector.
“The Trump administration wants to force current federal workers to pay substantially more into their retirement accounts while cutting the size of those benefits for current and future retirees. Plus, the administration would eliminate retirement payments that go to law enforcement officers and other workers who retire before Social Security kicks in.
“While the proposals themselves are bad enough, so is the way the administration is trying to ram them through Congress. The administration wants these proposals attached to the Department of Defense’s fiscal 2019 authorization bill, even though these changes would affect all current and retired federal employees. This is an insidious attempt to trick the American public and polarize members of Congress who support federal workers.
“These shameful proposals must be rejected outright. The women and men who keep our government running every day should be able to earn a decent living while they’re working and be able to retire with the benefits they earned and were promised.”
From OPM:
I have enclosed legislative proposals for consideration of the Congress. OPM is responsible for administering the Civil Service Retirement System (CSRS) and the Federal Employees Retirement System (FERS) under chapters 83 and 84 of title 5, United States Code, respectively. These programs serve nearly 2.6 million Federal retirees and survivors who receive monthly annuity payments. These legislative proposals would amend chapters 83 and 84 oftitle 5, United States Code, to bring Federal benefits more in line with the private sector  Feds
Posted on May 8, 2018 by postal
Office of Personnel Management Director Jeff Pon wrote a letter to House Speaker Paul Ryan late last week requesting a number of legislative changes that would cut retirement benefits for federal workers.
The request, which Pon said would save taxpayers $143.5 billion over the next decade, comes on the eve of the White House’s planned introduction of $15 billion in spending cuts as part of a rescission package. Pon said his plans, which are a laundry list of previously proposed cuts to federal employee retirement programs, would “bring federal benefits more in line with the private sector.”
Pon wrote that the proposed changes reflect the move by private sector businesses away from defined-benefit pensions in recent years.
source:  Largest Federal Union Assails Trump Administration’s Latest Attack on Working People
Hiding wage and retirement cuts in defense bill is politics at its worst
WASHINGTON – American Federation of Government Employees National President J. David Cox Sr. issued the following statement in response to new legislative proposals that the Office of Personnel Management has submitted to Congress:
“President Trump’s war on working people knows no limits. As Wall Street shareholders are reporting record profits and the wealthiest 1 percent are basking in their massive tax cuts, President Trump believes the career employees who keep the government running deserve another cut, this time to their retirement.
“Federal offices across the country are struggling to recruit and retain workers because federal wages and benefits are falling further behind the private sector. Yet the Trump administration wants to freeze employees’ wages next year and now is proposing to take away the retirement benefits they’ve worked a lifetime to earn.  “Legislative proposals submitted to Congress by Office of Personnel Management Director Jeff Pon would cut $143.5 billion in wages and benefits from current and retired workers over the next 10 years. That’s on top of the $246 billion in cuts to wages and benefits that have been made this decade, including next year’s proposed pay freeze.
“These proposed cuts come at a time when federal employees lag further and further behind their private-sector counterparts in comparative compensation. Federal employees today bring home 5 percent less than they did at the start of the decade, when adjusted for inflation, and they earn roughly one-third less than they would make doing comparable work in the private sector.
“The Trump administration wants to force current federal workers to pay substantially more into their retirement accounts while cutting the size of those benefits for current and future retirees. Plus, the administration would eliminate retirement payments that go to law enforcement officers and other workers who retire before Social Security kicks in.
“While the proposals themselves are bad enough, so is the way the administration is trying to ram them through Congress. The administration wants these proposals attached to the Department of Defense’s fiscal 2019 authorization bill, even though these changes would affect all current and retired federal employees. This is an insidious attempt to trick the American public and polarize members of Congress who support federal workers.
“These shameful proposals must be rejected outright. The women and men who keep our government running every day should be able to earn a decent living while they’re working and be able to retire with the benefits they earned and were promised.”
From OPM:
I have enclosed legislative proposals for consideration of the Congress. OPM is responsible for administering the Civil Service Retirement System (CSRS) and the Federal Employees Retirement System (FERS) under chapters 83 and 84 of title 5, United States Code, respectively. These programs serve nearly 2.6 million Federal retirees and survivors who receive monthly annuity payments. These legislative proposals would amend chapters 83 and 84 oftitle 5, United States Code, to bring Federal benefits more in line with the private sector

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OPM announces new regulations for weather-related leave

By Amelia Brust   April 10, 2018 11:17 am 2 min read
New weather and safety leave regulations from the Office of Personnel Management are cutting off teleworkers in most instances.
The regulations, announced announced Tuesday, said that employees who participate in a telework program will usually not be granted weather and safety leave.
“Because employees who are participating in a telework program under applicable agency policies are typically able to safely perform work at their approved locations (e.g., their homes), such an employee will generally not be granted weather and safety leave,” the announcement said.
Under the Administrative Leave Act of 2016, agencies may grant weather and safety leave due to an “act of God”, a terrorist attack or other emergency condition which prevents employees from safely traveling to or performing work at the office or other work site. In an attempt to restrict leave permissions — which Congress determined to be too broad and overused — the legislation broke OPM’s leave permissions into three primary categories: Administrative, investigative and notice, and weather and safety.
The new regulations take effect May 10 — 30 days from the time of publication — according to the Federal Register. An exception is if the agency determines a teleworking employee could not “reasonably have anticipated” the disruptive conditions and could not prepare to telework productively.
OPM also said it expected a delay in the enforcement of agencies reporting weather and safety leave separately from other administrative leave until 270 days after the regulations were published.
Interagency working group to reconvene
OPM also announced its interagency working group for dismissal and closing procedures would reconvene to update the agency’s “Washington, DC, Area Dismissal and Closure Procedures.”
OPM made no changes to these guidelines so far this year. But Tuesday’s announcement said the working group will help incorporate the new weather and safety leave regulations into the closure procedures for D.C. area employees.
Currently the procedures promote incorporating telework into agencies’ emergency plans and likewise recommend taking steps to ensure those employees can access IT systems and networks without posing cybersecurity risks.

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