Pension contribution levels rise
By
Kellie Lunney klunney@govexec.com
October 5, 2011 -- GovExec.com
The amount the government contributes to the pension plans of federal
employees, including lawmakers, is increasing slightly this month.
For most federal employees, the amount agencies contribute to their pensions
under the Federal Employees Retirement System rose from 11.7 percent to 11.9
percent at the start of fiscal 2012. The amount the government contributes to
congressional members' pension plans increased from the current rate of 17.9
percent to 18.3 percent. Individual contribution rates -- 0.8 percent of their
wages for most of the federal workforce and 1.3 percent of wages for lawmakers
-- remained the same.
The total cost of FERS pensions, adding individual and agency contributions,
for most federal employees will be 12.7 percent in fiscal 2012; for lawmakers,
the total is 19.6 percent. The changes took effect at the beginning of the first
pay period on or after Oct. 1.
Individual contributions to FERS are fixed in law. The law requires the rate
of the government contributions to be equal to the cost of the FERS pension as
estimated by the Office of Personnel Management minus the individual
contribution. OPM computes the total amount of funding required for FERS plans,
known as the "normal cost," based on economic and demographic data for the
following categories of federal employees:
| Category |
FERS Agency Contribution Rate (%) |
|
Current |
Oct. 2011 |
| Regular Federal Employees |
11.7 |
11.9 |
| Members |
17.9 |
18.3 |
| Congressional Employees |
16.4 |
16.7 |
| Law Enforcement Officers |
25.7 |
26.3 |
| Air Traffic Controllers |
25.5 |
26.0 |
| Military Reserve Technicians |
14.5 |
14.9 |
| Employees Under Section 303 of the 1964 CIA Act for
Certain Employees (When Serving Abroad) |
16.8 |
17.2 |
The amount of money allocated for FERS plans -- and the portion that federal
employees contribute -- has been at the center of the debate over deficit
reduction.
President Obama released a proposal
Sept. 19 that recommended
increasing the amount federal employees contribute to their pensions by 1.2
percent over three years beginning in 2013 -- a rate of 0.4 percent each year
during that time. The president also recommended eliminating the Federal
Employees Retirement System Annuity Supplement for newly hired employees.
Other proposals floating around would require even more sacrifice from
federal employees. The version of the fiscal 2012 budget resolution the House
passed included a recommendation that would require federal employees to pay for
half the defined benefit they receive with their pensions at retirement. Sens.
Richard Burr, R-N.C., and Tom Coburn, R-Okla., have introduced legislation that
would end the Federal Employees Retirement System-defined benefit plan for new
government employees, including new members of Congress, starting in 2013.
The government announced the new
contribution levels this summer in the Federal Register.