House Republicans have laid out their blueprints for reducing the national debt, which requires cuts to the federal workforce, as well as their pay and benefits. Lawmakers estimate the savings from these cuts would amass more than $280 billion over the course of 10 years and slash non-Defense, discretionary spending at agencies by $887 billion through fiscal 2026. Those in opposition believe the plan comes at too great a cost to the nation’s public servants.
The Republican blueprint would require federal agencies to reduce their non-national security employees by 10% through attrition. Agencies would fill just one out of every three vacancies left by employees who retire or leave federal service. The plan would also cut worker pay by 2-5% as it would require federal employees to contribute an equal amount to their pensions as do their agencies.
In addition, Republicans suggested several changes to retirement benefits including phasing out the defined benefits portion of federal retirement packages as well as the Retirement System annuity supplement. Their argument for doing so would be to grant individuals more control and security over their retirement. If you believe any of these changes would possibly affect your retirement package, reach out to a federal benefits specialist here.
Republicans also supported reducing the rate of return on the Thrift Savings Plan’s G fund. By decreasing the interest on riskier, long-term security, Republicans aim to align the G Fund with an appropriate risk profile, a change that would save an estimated $32 billion.
Other benefits affected by the budget framework are the Federal Employees Health Benefits Program. In the Republican blueprint, the government’s share of premiums for retirees would be tied to to inflation rather than the average cost of plans. It also proposes tying retirees’ health benefits to length of service.
Finally, in a change that would amass savings over $10 billion, House Republicans recommended U.S. Postal Service employees contribute more toward their health and life insurance premiums.
House Democrats, and a few Republican Senators are not convinced the measure will reduce federal spending sufficiently, placing the plan in the wake of an unforeseeable future. Those who are opposed to the plan argue that it is the nation’s responsibility to invest in its public servants and that adequate funding must be granted towards such resources. Even if the Republican blueprint were to be approved by opposing sides of the senate, changes would not take place until after fiscal 2017.
If you are concerned about the future of your retirement package Contact MyFed Benefits to ensure you are getting the maximum benefits possible when you are ready to retire.
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