Of all the budget threats aimed at the federal retirement package, which is the most likely to make it into law?
• Eliminate the FERS (federal employee retirement system) annuity supplement.
• Base future annuities on the employee’s highest five-year average salary, instead of the current high-three formula.
• Reduce future COLAs ( (cost-of-living adjustments) for current and future CSRS (Civil Service Retirement System) retirees by 0.5 percent below the actual rate of inflation, as measured by the Bureau of Labor Statistics.
• Eliminate future COLAs for the current and future FERS retirees.
• Force workers under the FERS retirement program to pay more for their benefits. Currently, FERS workers hired before 2013 contribute 0.8 percent of their salary into the civil service retirement fund. Those hired in 2013 contribute 3.1 percent and those hired in 2014 and since contribute 4.4 percent. Under the Trump administration budget proposal, their contributions would go up 1 percent each year for the next six years. Prior House budget proposals had no such phase-in, and would have impacted CSRS employees as well.
As far as feds and retirees go, all of the proposals are horrible. And represent a breach of contract, at least in their minds.