At Work

Oh those horrible GOP cost cutters

Read the following. Do you think these are drastic or unfair changes?

Before you answer, keep in mind you are paying for these benefits and for most federal civilian workers their total compensation is now 44% or more higher than average in the private sector.

The fact is none of these proposed changes are drastic given the generous nature of the benefits. After they are implemented the benefits will still be above the level of the private sector, even for private sector workers who are lucky to have an employer pension.

In the real world where money matters and you can’t endlessly add to debt, or demand money from your neighbors, these are far from significant cuts.

President Trump’s 2019 budget proposal included asking Congress to approve a 2019 pay freeze for all civilian employees and several significant cuts to retirement benefits, including:

β€’ increase federal employee contributions to the Federal Employees Retirement System (FERS)

β€’ by 6 percent — phased in over period of six years

β€’ eliminate cost of living adjustments (COLAs) for FERS retirees, and would reduce CSRS retiree COLAs by 0.5 percent

β€’ Eliminate the FERS Special Retirement Supplement for those who retire before age 62

β€’ Calculate future federal retirement benefits on the average of an employee’s highest five years of salary for those retiring later than 2019 (it is currently is based on the highest three years salary)

The White House’s 2019 budget proposal also included implementing a pay-for-performance model of compensation and slowing the in-grade pay step increases. Source: my federalretirement.com

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3 replies »

  1. At every level of education, from some high school through masters degree (except for professional degrees), the public sector employees receive greater total compensation than private sector employees – in terms of averages AND medians. That means, the “typical” federal employee is paid substantially greater total compensation than the “typical” private sector employee – whose taxes fund their compensation.

    And, again, that holds true for the high school dropout and the masters degree holder.

    From my perspective, the challenge here is that if I were a public sector employee, I would prefer having a choice – to choose a lesser level of benefits or to pay more. So, for example, If I could waive medical coverage (and be covered under a spouse’s plan) while receiving an opt out financial incentive, that might be used to cover the higher contributions to retirement.

    Obviously, members of the Trump Administration know little about employee benefits and total rewards – consistent with the past decades of other administrations who dug this hole.

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  2. I am a retired federal employee. I agree with each and every change included in the new budget for 2019. Federal employees have enjoyed on average annual pay raises above the rate of inflation for the last decade and a half. In addition to the annual raises, most employees get what amounts to automatic “step increases” on average every two years. Tax payers pick up 75 per cent of health care premiums for federal employees. I was, and am, a beneficiary of the generosity of the federal government. Way back in the middle of the last century, benefits were high in part because federal salaries were indeed low. Back then health care premiums were very low and retirement modest due to the low salaries they were based on. This however has not been the case for the past forty years. It pains me to hear the whining and complaining from federal unions and their bought and paid for congressmen and senators from states and districts with a high number of federal employees. If these correctives are not passed by Congress this year, they likely won’t be for a long time as many predict the House will go Democrat in 2019. If all the changes are passed, working for the federal government will still be a good deal for employees. But the pay and benefits won’t be as out of whack with those of the taxpayers who pay them.

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