December 11, 2013
DEFINING THE CONTRIBUTION:
Budget Deal Asks New Feds to Contribute More to Pensions (Kellie Lunney December 10, 2013, Government Executive)
New federal employees and military retirees would have to contribute more to their pensions under the bipartisan deal the congressional budget conference committee unveiled Tuesday evening.Federal workers hired on or after Jan. 1, 2014, with less than five years of service would have to pay 4.4 percent toward their defined retirement benefit -- 1.3 percent more than the current 3.1 percent that employees hired after 2012 contribute.Military retirees under the age of 62 would see a decrease, phased-in over the next two years, to the calculation of their cost-of-living adjustment, equal to inflation minus 1 percent. "This change would be gradually phased in, with no change for the current year, a 0.25 percent decrease in December 2014, and a 0.5 percent decrease in December 2015," according to a summary of the deal. The change would not affect service members who retired because of injury or disability.The proposal also caps the amount the government can reimburse contractors for executive compensation at $487,000. The current cap is more than $900,000.The deal requires new civilian federal workers and military retirees to contribute $12 billion in savings overall -- $6 billion from each group -- to help partially repeal the sequester for fiscal 2014 and fiscal 2015. That $12 billion figure is part of the total proposed $63 billion in savings to offset the automatic spending cuts for two years.
A typical bipartisan Third Way reform..Posted by Orrin Judd at December 11, 2013 11:36 AM