National President Dougan Blasts Federal Retirement Cuts in FY 2013 Budget Proposal

FOR IMMEDIATE RELEASE

Contact: Cory Bythrow, Communications Director

Phone: (202) 216-4458

Washington, D.C. – In response to the Administration’s Fiscal Year 2013 budget proposal, which includes a 1.2% increase in federal employee pension contributions and the elimination of the FERS annuity supplement, National Federation of Federal Employees National President William R. Dougan issued the following statement:

“Though we applaud the President for proposing an end to the two-year federal pay freeze, we strongly oppose all budget provisions undermining federal retirement security.

The first proposal, which requires a 1.2% increase in the amount federal workers contribute to their pensions over three years, will have a serious impact on the retirement security federal employees were promised. Asking FERS employees to pay two and a half times more for their pensions in this strained economic environment could mean the difference between keeping a roof over their heads and going into foreclosure. For example, a federal employee making $50,000 in salary would have to pay an additional $600 each year for their retirement, without any corresponding increase in benefits. In the wake of a two-year pay freeze, which effectively cut workers pay by thousands after inflation, another $600 bill to pay would be difficult to bear.

Even when factoring in the proposed 0.5% pay increase for 2013, the increased retirement contributions are a losing proposition for federal workers. For example, that same employee making $50,000 per year would see a 0.4% increase in their retirement contribution along with a 0.5% increase in their pay. This results in a net 0.1% pay increase, amounting to a total of $50 for the year, or $4.16 each month. After adjusting for inflation, this turns into a third year of net pay loss for federal employees.

After two years of frozen pay resulting in $60 billion is savings, it is unfair to ask federal workers to pony up yet again for deficit reduction. Though we applaud the President’s proposal to collect more in taxes from those who can most afford it, it is critical that Washington understands that middle class federal employees simply cannot afford greater sacrifice.

The bill also calls for an end to the FERS annuity supplement for new hires, which provides a critical bridge between federal workers’ retirement date and the day they become eligible for social security. We should not be punishing federal workers who often dedicate 30 years or more to public service by taking away this critical lifeline. NFFE will never support a bill that treats new employees any different than their predecessors.”