NARFE Deplores Assaults on Federal Family

NARFE Deplores Assaults on Federal Family in Fiscal Commission Report

Joseph A. Beaudoin, president of the National Active and Retired Federal Employees Association (NARFE), has denounced the unprecedented assaults on the earned compensation of federal workers and annuitants in the final report voted on December 3 by the National Commission on Fiscal Responsibility and Reform.

“Times are tough, and federal workers and annuitants want to do their part, but not if it means we are singled out for budget cuts while others are not asked to make similar sacrifices,” Beaudoin said. “Of 45 proposals made by the co-chairmen of the commission, the only one unilaterally embraced by the president has been a two-year federal pay freeze. Singling out civil servants for disparate treatment simply makes no sense.”

Beaudoin added: “In reviewing the total package, federal civil service employees and retirees are targeted for wholesale reductions in pay and benefits when, in fact, their dedicated work is not a part of the deficit problem, but rather a part of the solution. At a time when the federal government is facing unprecedented retirements with the aging of its talented work force, we can ill-afford losing the best and brightest in service to the nation.”

Beaudoin said he was particularly troubled by a proposal in the co-chairs’ final report to create a “Federal Workforce Entitlement Task Force” to make recommendations to Congress to cut federal civilian and military retirement benefits by $70 billion over 10 years. The report cited options the task force should consider, including:

  • Basing federal civilian retirement annuities on an employee’s highest five years of salary rather than the highest three years, as under current and longstanding law. According to the Congressional Budget Office, this plan would reduce a Civil Service Retirement System (CSRS) annuity by an average of $1,424 in 2010 and would reduce the average annuitant’s retirement benefit by $7,148 over five years. A Federal Employees Retirement System (FERS) annuity would be cut by an average of $462 in 2010 and by $2,322 over five years.
  • Requiring workers to contribute a much higher share of their salary toward their defined-benefit annuity. This would have the effect of a significant pay cut. The additional contribution would not result in any change in a retirement annuity. While employees currently make contributions from their salary to the Civil Service Retirement and Disability Fund, most medium and large private-sector employers historically have not required their workers to make any contributions toward their defined-benefit pensions.
  • Deferring CSRS cost-of-living adjustments (COLAs) until age 62. Instead, CSRS annuitants would be offered a one-time, catch-up inflation adjustment at age 62 to increase the benefit to the amount that would have been payable had full COLAs been in effect.

Even more disturbing is the report’s plan to require federal employees and annuitants to pay an increasingly higher share of Federal Employees Health Benefits Program (FEHBP) premiums by limiting growth of the government/employer share to the Gross Domestic Product (GDP) plus 1 percent. “Given that increases in FEHBP premiums are likely to outpace the percentage increase in the GDP plus 1 percent, workers and retirees would be forced to pay a higher percent of the premium each year to the point where many could no longer afford health insurance,” said Beaudoin.

In addition, the co-chairs’ proposal to use the so-called “Chained” Consumer Price Index for All Urban Consumers (C-CPI-U) to set COLAs for Social Security (and other indexed benefits) has been estimated by the Congressional Budget Office to lower Social Security benefits by 3 percent after a 10-year period and would likely result in a similar reduction to federal civilian and military retirement COLAs. Rather than adjust the COLA to reflect the disproportionately higher health care costs paid by older Americans, the co-chairs’ proposal to use the C-CPI-U would further erode federal annuitant inflation protection.

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NARFE, one of America’s oldest and largest associations, was founded in 1921 with the mission of protecting the earned rights and benefits of America’s active and retired federal workers. The largest federal employee/ retiree organization, NARFE represents the retirement interests of nearly 5 million current and future federal annuitants, spouses, and survivors.



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