NTEU Backs Bill To End Higher Federal Pension Contributions

Press Release February 5, 2015

Washington, D.C.—The National Treasury Employees Union (NTEU) endorsed a House bill today that would end a congressional mandate under which recent and new federal hires must make bigger pension contributions than long-time employees.

Congress raised Federal Employees Retirement System (FERS) contributions for new hires in 2012 to help pay for an extension of unemployment insurance, and again in 2013 to help offset spending as part of a budget agreement. FERS, which covers most federal workers, is considered a model pension program for many reasons, including the fact that it is adequately funded.

The NTEU-backed bill, which would repeal the higher contribution limits, was reintroduced in the 114th Congress by Rep. Donna Edwards (D-Md.) and a growing number of co-sponsors.

“Forcing newer employees to pay more toward their retirement is unfair and unnecessary. It reduces their take-home pay and is a tax increase imposed selectively. We applaud Rep. Edwards and others for once again taking action to end this discriminatory treatment faced by the newest members of the federal workforce,” said NTEU National President Colleen M. Kelley.

Eliminating the pension contribution increases is one of NTEU’s top legislative priorities this year. Hundreds of NTEU delegates who came to Washington to attend the annual legislative conference made their case to congressional lawmakers and staff during numerous visits over the course of the three-day conference, which ended today.

“As NTEU delegates told lawmakers over and over this week, it is not right to force additional burdens on the federal workforce, which is already contributing $159 billion toward budget savings and deficit reduction through higher pension contributions and a three-year salary freeze. No other group in the nation is being asked to make such a big sacrifice,” the NTEU leader said.

“It is not as though the higher contributions came with bigger benefits. Quite the contrary. The benefits remained unchanged,” she added.

Federal employees hired after Dec. 31, 2012, pay an additional 2.3 percent toward their pensions. On top of that, those hired after Dec. 31, 2013, contribute an extra 1.3 percent toward retirement. New employees now pay an additional 3.6 percent of their salaries for the same benefit.

As the largest independent federal union, NTEU represents 150,000 employees in 31 agencies and departments.

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