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Trump Thanks Federal Employees with $143.5 billion in Retirement Cuts

Office of Personnel Mgmt Director Jeff Pon wrote a letter to House Speaker Paul Ryan late last week requesting a number of legislative changes that would cut retirement benefits for federal workers.  “In summary, the employee retirement landscape continues to evolve as private companies are providing less compensation in the form of retirement benefits,” the OPM chief stated. “The shift away from defined-benefit programs and cost-of-living adjustments for annuitants is part of that evolution.”

In other words, they want to get rid of pensions altogether.

The letter included plans to eliminate Federal Employees’ Retirement System (FERS) supplements for federal employees who retire before Social Security kicks in at age 62, change the basis of a retiree’s defined benefit annuity payments from their highest three years of salary to their highest five years; and increase the amount federal employees contribute to retirement by 1 percentage point per year until they reach an overall contribution level of 7.25 percent, matching the government’s contribution.

OPM also proposed the elimination of cost-of-living adjustments for FERS retirees—both current and future—and the reduction of Civil Service Retirement System COLAs by 0.5 percent. Pon also recommended eliminating a provision of the law that requires FERS disability annuities to be reduced by the recipient’s “assumed disability insurance benefit” through Social Security, instead basing the reduction on the individual’s actual Social Security benefits.

The American Federation of Government Employees blasted the proposals Monday as a “war on working people.” The Trump  2019 budget request calls for a pay freeze for all federal civilian workers next year and significantly reducing the rate of return on the Thrift Savings Plan’s G Fund.  “Federal offices across the country are struggling to recruit and retain workers because federal wages and benefits are falling further behind the private sector,” said AFGE National President J. David Cox. “Yet the Trump administration wants to freeze employees’ wages next year and now is proposing to take away the retirement benefits they’ve worked a lifetime to earn.”

Officials at OPM did not respond to a request for comment Monday.

Read more: Government Executive

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