FERS pension contribution increase

[Anonymous]

Anonymous wrote:This will get challenged if it passes. Your pay can't get decreased, and this is a decrease in pay because you're required to participate in the retirement system (as compared to benefits like health insurance, which are optional).

Why do you say your pay can’t decrease?

If you work for company A earning 100k and they tell you stating tomorrow, you will earn 95.6K, that is completely legal (absent a contract or something else specific).

You can either choose to work for 95.6k going forward, or you can quit.

Is there something specific about government employment that prohibits this?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How do you think your colleagues already paying 4.4 feel about you getting the same pension for so much less contribution.

I think that was the deal when they joined. It wasn't the deal when I joined.

But yes, important to understand this would only affect contributions going forward.

There was no guarantee that would be the deal forever. You wouldn’t be forced to stay based on these new terms.

Why be so mean. It is extremely stressful for the federal workforce and honestly another slap in the face to the highly educated people trying to do the right thing. Go away

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How do you think your colleagues already paying 4.4 feel about you getting the same pension for so much less contribution.

I think that was the deal when they joined. It wasn't the deal when I joined.

But yes, important to understand this would only affect contributions going forward.

There was no guarantee that would be the deal forever. You wouldn’t be forced to stay based on these new terms.

Why be so mean. It is extremely stressful for the federal workforce and honestly another slap in the face to the highly educated people trying to do the right thing. Go away

It’s because this bucket is full of old crabs 🦀

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How do you think your colleagues already paying 4.4 feel about you getting the same pension for so much less contribution.

I think that was the deal when they joined. It wasn't the deal when I joined.

But yes, important to understand this would only affect contributions going forward.

There was no guarantee that would be the deal forever. You wouldn’t be forced to stay based on these new terms.

Why be so mean. It is extremely stressful for the federal workforce and honestly another slap in the face to the highly educated people trying to do the right thing. Go away

How was that mean? It’s simply true and explains why any challenge to the law, if it passes, would likely fail.

[Anonymous]

Anonymous wrote:Relax, even if you are in the .8% contribution category, you will only lose 3.6% of your income with the new rate.

That’s almost $10k a year for me.

[Anonymous]

Anonymous wrote:

Anonymous wrote:This will get challenged if it passes. Your pay can't get decreased, and this is a decrease in pay because you're required to participate in the retirement system (as compared to benefits like health insurance, which are optional).

Why do you say your pay can’t decrease?

If you work for company A earning 100k and they tell you stating tomorrow, you will earn 95.6K, that is completely legal (absent a contract or something else specific).

You can either choose to work for 95.6k going forward, or you can quit.

Is there something specific about government employment that prohibits this?

DP. There are different rules about pension vs salary. It's the same in public and private sector, so not something that special with government employment. Salary is an agreement going forward to provide labor at a specific rate. Either side can walk away. As PP mentions, pensions are deferred compensation for past work. Companies aren't allowed to just zero out previously promised pension obligations. Otherwise it would be the first cost cut that every corporate raider would do upon acquisition.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This will get challenged if it passes. Your pay can't get decreased, and this is a decrease in pay because you're required to participate in the retirement system (as compared to benefits like health insurance, which are optional).

Why do you say your pay can’t decrease?

If you work for company A earning 100k and they tell you stating tomorrow, you will earn 95.6K, that is completely legal (absent a contract or something else specific).

You can either choose to work for 95.6k going forward, or you can quit.

Is there something specific about government employment that prohibits this?

DP. There are different rules about pension vs salary. It's the same in public and private sector, so not something that special with government employment. Salary is an agreement going forward to provide labor at a specific rate. Either side can walk away. As PP mentions, pensions are deferred compensation for past work. Companies aren't allowed to just zero out previously promised pension obligations. Otherwise it would be the first cost cut that every corporate raider would do upon acquisition.

But they wouldn’t be doing that. They are simply saying that, going forward, you will have to pay 4.4% of your current and future salary. Not only isn’t the government’s pension obligation not zeroed out, it isn’t changed at all. You would get the same pension as you would previously.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This will get challenged if it passes. Your pay can't get decreased, and this is a decrease in pay because you're required to participate in the retirement system (as compared to benefits like health insurance, which are optional).

Why do you say your pay can’t decrease?

If you work for company A earning 100k and they tell you stating tomorrow, you will earn 95.6K, that is completely legal (absent a contract or something else specific).

You can either choose to work for 95.6k going forward, or you can quit.

Is there something specific about government employment that prohibits this?

DP. There are different rules about pension vs salary. It's the same in public and private sector, so not something that special with government employment. Salary is an agreement going forward to provide labor at a specific rate. Either side can walk away. As PP mentions, pensions are deferred compensation for past work. Companies aren't allowed to just zero out previously promised pension obligations. Otherwise it would be the first cost cut that every corporate raider would do upon acquisition.

But they wouldn’t be doing that. They are simply saying that, going forward, you will have to pay 4.4% of your current and future salary. Not only isn’t the government’s pension obligation not zeroed out, it isn’t changed at all. You would get the same pension as you would previously.

There are several things being proposed
1) for changing the withholding from 0.8 or 3.3 to 4.4, I agree with you. That’s about the future and both sides can assess whether it’s a deal to accept
2) changing high3 to high5 potentially changes the value of both previously earned pension components and future ones. I feel the future is fair game if they can do it politically but the previous ones were deferred comp. If they used high3 for anything before the point it changed and high5 after it would be different. And are they planning to retroactively change it for everyone who’s already drawing retirement?
3) same with the SS supplement. Are they going to take it away from retirees already drawing? It’s already scaled based on years of govt service so it wouldn’t be hard for them to freeze it and not allow new years to be added so that it phased out over time

These are the type of steps corporations take when they shut down future pension programs. Sometimes they also buy out the employees with a lump sum

[Anonymous]

Still not seeing where this passed the Senate today. Can OP share the link on Congress.gov?

[Anonymous]

Anonymous wrote:

Anonymous wrote:This will get challenged if it passes. Your pay can't get decreased, and this is a decrease in pay because you're required to participate in the retirement system (as compared to benefits like health insurance, which are optional).

Why do you say your pay can’t decrease?

If you work for company A earning 100k and they tell you stating tomorrow, you will earn 95.6K, that is completely legal (absent a contract or something else specific).

You can either choose to work for 95.6k going forward, or you can quit.

Is there something specific about government employment that prohibits this?

Yes, there is:
https://www.opm.gov/policy-data-oversight/pay-leave/pay-administration/fact-sheets/pay-retention/

[Anonymous]

Anonymous wrote:

Anonymous wrote:This will get challenged if it passes. Your pay can't get decreased, and this is a decrease in pay because you're required to participate in the retirement system (as compared to benefits like health insurance, which are optional).

Are you going to challenge it? If so, good luck!

I left government a few years ago for a hefty pay increase in the private sector, so it makes no difference to me. Good luck to you!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This will get challenged if it passes. Your pay can't get decreased, and this is a decrease in pay because you're required to participate in the retirement system (as compared to benefits like health insurance, which are optional).

Why do you say your pay can’t decrease?

If you work for company A earning 100k and they tell you stating tomorrow, you will earn 95.6K, that is completely legal (absent a contract or something else specific).

You can either choose to work for 95.6k going forward, or you can quit.

Is there something specific about government employment that prohibits this?

Yes, there is:
https://www.opm.gov/policy-data-oversight/pay-leave/pay-administration/fact-sheets/pay-retention/

I’d want to see the definition of “management action,” but that doesn’t appear to apply to a situation like we are discussing because it doesn’t involve an employee moving positions.

Also, although it clearly functions as a pay decrease, requiring you to pay more into a pension doesn’t affect your basic pay, so this may not be considered a pay decrease under this provision.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This will get challenged if it passes. Your pay can't get decreased, and this is a decrease in pay because you're required to participate in the retirement system (as compared to benefits like health insurance, which are optional).

Why do you say your pay can’t decrease?

If you work for company A earning 100k and they tell you stating tomorrow, you will earn 95.6K, that is completely legal (absent a contract or something else specific).

You can either choose to work for 95.6k going forward, or you can quit.

Is there something specific about government employment that prohibits this?

DP. There are different rules about pension vs salary. It's the same in public and private sector, so not something that special with government employment. Salary is an agreement going forward to provide labor at a specific rate. Either side can walk away. As PP mentions, pensions are deferred compensation for past work. Companies aren't allowed to just zero out previously promised pension obligations. Otherwise it would be the first cost cut that every corporate raider would do upon acquisition.

But they wouldn’t be doing that. They are simply saying that, going forward, you will have to pay 4.4% of your current and future salary. Not only isn’t the government’s pension obligation not zeroed out, it isn’t changed at all. You would get the same pension as you would previously.

There are several things being proposed
1) for changing the withholding from 0.8 or 3.3 to 4.4, I agree with you. That’s about the future and both sides can assess whether it’s a deal to accept
2) changing high3 to high5 potentially changes the value of both previously earned pension components and future ones. I feel the future is fair game if they can do it politically but the previous ones were deferred comp. If they used high3 for anything before the point it changed and high5 after it would be different. And are they planning to retroactively change it for everyone who’s already drawing retirement?
3) same with the SS supplement. Are they going to take it away from retirees already drawing? It’s already scaled based on years of govt service so it wouldn’t be hard for them to freeze it and not allow new years to be added so that it phased out over time

These are the type of steps corporations take when they shut down future pension programs. Sometimes they also buy out the employees with a lump sum

Fair enough. The change to high five if not adjusted would arguably be a retroactive change. I was only talking about the potential prospective change to 4.4.

[Anonymous]

For those of us that have already hit the pay cap, this is some shit.

[Anonymous]

where is anyone seeing that this actually passed?

ive heard of all the proposed changes, but has anything actually been passed?

-- leg branch employee