On May 4, 2018, the Director of OPM, Jeff Pon, appointed by President Trump, proposed $143.5 billion in cuts to the compensation package of federal employees. As reported in the Washington Post, in a letter to House Speaker Paul Ryan, the OPM Director made four proposals to significantly cut retirement benefits “to bring federal benefits more in line with the private sector.” Specifically, Director Pon proposed:
- Eliminating supplements for FERS annuitants who retire before being eligible for Social Security benefits
- Reducing federal pensions by basing them on workers basic pay 5-year averages instead of 3-year averages
- Increasing employee retirement contributions with no increase in benefits. The proposal increases employee contributions from 0.8% by 1% per year until the employee contribution reaches 7.25% of basic pay
- Eliminating the COLA adjustments to FERS retirement benefits and shrinking the COLA adjustment to CSRS retirement benefits for current and future retirees.
The proposals by Director Pon were also contained in President Trump’s budget plan submitted to Congress in February and reflect the priorities of the President and Dick Mulvany, the Director of OMB (the Office of Management and Budget).
We oppose many aspects of the President’s budget, including these substantial cuts to federal employee retirement benefits. First, it is not clear that the total compensation package for federal employees is out of line with the private sector. Regardless, many federal employees are in unions, and these unions should be able to negotiate over these terms and conditions of employment. Federal employees should contact their unions to discuss the most effective action to take to oppose these cuts. Finally, we recommend that people contact their senators and representatives in Congress to oppose these cuts.
Andalman & Flynn represents federal and postal workers on disability retirement applications and related employee disputes throughout the country. Contact Elliott Andalman and Peter Casciano at our disability benefits department for a free consultation in Maryland: call 301-563-6685 or email us at [email protected] or [email protected]
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