Office of Personnel Management (OPM) Lays Out Proposed Cuts to Federal Retirement Benefits
In the wake of Office of Personnel Management Director Jeff Pon has proposed changes to federal employees’ retirement benefits to more align them with that of the private sector.
In a letter to House Speaker Paul Ryan (R-Wis.), Pon proposed four main changes to federal employee retirement benefits that will affect 2.6 million federal retirees and survivors who receive monthly annuity payments:
1) Eliminate the Federal Employees’ Retirement System annuity supplements for new retirees and survivor annuitants;
2) Increase the Civil Service Retirement System and FERS average pay period to five years from three years;
3) Increase FERS employees’ contribution to their retirement to one percent each year until they reach 7.25 percent of basic pay; and
4) Reduce or eliminate retirement cost-of-living adjustments.
The agency expects to save an estimated $143 billion over ten years if all four proposes are enacted.
“The Office of Management and Budget (OMB) has advised there is no objection to the transmittal of these legislative proposals to the Congress and that their enactment would be in accord with the program of the president,” Pon said in the letter.
He asked that Congress give “prompt and favorable” consideration of the proposals.
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