NAPS Leg/Reg Update - February 17, 2012

Congress Requires New Postal and Fed Workers to Pay More for Pensions

Congress today approved a three-fold increase in the pension contributions of new employees who start work with the Postal Service and the federal government beginning in 2013.  

The new pension contribution level -- 2.3 percent  -- will rise from the current 0.8 percent for FERS employees to 3.1 percent.  The increase in pension contributions, estimated to raise $15 billion over the next 10 years, was used by Congress to pay half the cost of extending unemployment benefits through the end of the year.  It was included in a legislative package (H.R. 3630) that also extends the payroll tax holiday and Medicare reimbursements for doctors through the remainder of 2012. 

NAPS and other postal and federal employee groups opposed the financing of short-term federal spending on the backs of postal and federal workers.  Several lawmakers in both chambers spoke out against the federal pension provision.  “Our federal employees  are not a piggybank. We should not reach into their pockets every time we have to pay for something,”  said Rep. Elijah Cummings (D-MD). 

 

Originally, the financing proposal began as a larger intiative that would have increased the pension contributions of all current employees and future workers.  The efforts of Rep. Chris Van Hollen (D-MD) and Sen. Ben Cardin (D-MD) in the House-Senate conference committee negotiations on the bill were pivotal in trimming back the scope of the final legislation to only future employees.

The House voted 293-132 to approve the conference report; the Senate approved it on a vote of 60-36.  To see how your House Member voted, click here; to see how your Senator voted, click here. 

But there are still several other pending legislative proposals in Congress that could affect retirement benefits.  President Obama’s fiscal 2013 budget proposal, released earlier this week, recommends increasing the amount that current postal and federal employees contribute to their pensions by a total of 1.2 percent over three years beginning in 2013.  The administration estimates the increase would save the government $27 billion over the next decade.  NAPS opposes the administration's proposal.

H.R. 3813, introduced by Rep. Dennis Ross (R-FL), would require postal and federal workers and members of Congress to contribute a total of 1.5 percent more over three years, beginning in 2013, to their defined retirement benefits and eliminate the Social Security supplement for postal and federal workers who retire before 62.  When Congress returns from its week-long recess on Feb. 27, that legislation could wind up  as part of a massive highway funding bill the House is considering, as a way to pay for the highway bill.  NAPS has joined with 28 other postal and federal employee groups in opposing this initiative.

So far this year, Congress has proposed using postal worker paychecks to offset the costs of the payroll tax holiday, unemployment benefits, new highways and bridges, the Pentagon budget and even the Postal Service itself.  NAPS will continue to fight these initiatives, in league with other postal and federal employee groups.