Federal Employee Issues 2019
on Pay and Retirement Benefits
Position:
Federal employees have sacrificed a tremendous amount in the name of deficit reduction in the last decade. They were forced to accept frozen pay from 2011 - 2013. Since then, annual adjustments have ranged between 1% and 2.1%, but the annual adjustments have lagged far behind private sector wage increases in the same time period. Years of substandard pay adjustments has led to federal workers making an average of 31% less than private sector workers performing the same jobs, according to the Federal Salary Council. This is unsustainable. The Federal Adjustment of Income Rates (FAIR) Act (H.R. 1073/S. 426), introduced in February of this year, would provide federal workers with a modest but much needed 3.6% average pay adjustment in 2020. Since 2011, federal employees have sacrificed over $195 billion in the name of deficit reduction. Federal workers deserve an adequate pay adjustment. NFFE strongly supports the FAIR Act.
If the 35-day partial government showed us anything, it demonstrated that a high percentage of federal employees live paycheck to paycheck. The country witnessed firsthand the panic and desperation of hundreds of thousands of federal workers as they struggled to pay for rents, mortgages, medications, heating, childcare, and food. While some in Congress mischaracterize federal workers as over-paid, the shutdown demonstrated that clearly is not true. The 31% pay gap that favors the private sector is factual, and any disruption in pay or annuities to federal families is devastating. Public servants deserve better. At minimum, they deserve fair pay.
After three consecutive years of pay freezes followed by meager annual adjustments, federal workers have seen their incomes decrease by nearly 15% with respect to inflation over the past decade. Yet, the Trump Administration continues to order pay freezes. Based on data collected by the Bureau of Labor Statistics that was reported by the Office of Personnel Management, private sector workers continue to have a significant salary advantage over federal employees. This advantage has grown significantly in the last decade. This ballooning pay gap not only frustrates the federal workers at many of our critical government agencies, but it also discourages younger job-seekers from looking towards the federal government for stable, competitive employment.
In 2005, the President’s Pay Agent reported that the public-private pay gap was just 13%. Today, the federal pay gap stands at 31%. So, federal workers have lost 18% of pay relative to the private sector since 2005, and the methodology to calculate these gaps has been virtually unchanged. To keep our country on a sustainable path forward, federal agencies and departments must be able to recruit and retain a qualified and talented workforce. Providing inadequate pay adjustments year after year makes this difficult, if not impossible, to accomplish. As a result of the squeeze on federal workers’ pay, morale in the federal workforce has fallen dramatically, and critical services to the American people are suffering.
Federal employees have made significant financial sacrifices in the name of deficit reduction - nearly $100,000 per federal employee - which is hurting communities where federal employees reside across the country. This effects every congressional district and state. Support a 3.6% or greater pay increase for FY20 (H.R. 1073, S. 426) consistent with the Federal Adjustment of Income Rates [FAIR] Act of 2019, sponsored by Rep. Connolly in the House and Sen. Schatz in the Senate.
NATIONAL
Position:
In a shocking affront to working Americans, the White House budget proposal for FY 2020 again requests devastating cuts to federal employee retirement, including cuts to the annuities of current retirees. Without any meaningful fiscal logic, the Administration proposes the elimination of COLAs, a 6% increase in retirement contributions without an annuity increase, elimination of the FERS social security supplement, lower annuities based on ‘High 5’ calculations, lowering the rate of return on the TSP G Fund, and increasing FEHBP employee contributions (on top of the current average annual premium increase of 6.5%). Together, these cuts will take $200 to $300 billion more from federal employees, retirees, and their families over the next ten years. NFFEIAM strongly opposes these measures.
Congress has established a four-tiered pension for federal employees – CSRS and 3 different FERS systems. This means workers hired in 2013 unfairly pay 2.3% more than original FERS employees, and those hired in/after 2014 pay 3.6% more. These increases in employee contributions come with no increase in retirement benefits. In addition, past Administration budgets have attempted to cut pensions, including doing away with the FERS defined benefit altogether for new hires. NFFE-IAM urges support for the Federal Employee Pension Fairness Act (bill number pending), sponsored by Maryland Representative Anthony Brown in the last Congress to bring federal pension contributions back to pre-2012 levels for all employees.
There are numerous provisions contained in the budget request that would erode the basic financial security of middle-class federal workers, retirees, and their families who live and work in virtually every community and congressional district. These proposals renege on the government’s commitments to its current and former employees in exchange for their hard work over long careers. The proposals in the budget would undoubtedly make it harder (if not impossible) for federal employees to have a secure retirement. Federal workers would in effect be required to work for more years, reducing government savings and delaying the career progression of younger employees. In addition, these proposals would undermine our government’s ability to recruit and retain an effective and well-qualified workforce to serve our nation’s needs by slashing workers’ take-home pay and undermining retirement security.
Federal employees have consistently been the target of political attacks from lawmakers seeking to cut government spending at the expense of those who allow the government to function properly. They have been an easy scapegoat for legislators, already having lost $200 billion in earnings due to pay freezes, pension cuts, and other methods. They have been punished for economic problems they did not create, and singling them out for further pain and sacrifice is not only wrong, but detrimental to the effectiveness and competitiveness of the federal workforce.
Congress must stop this ‘race to the bottom’ for working Americans. NFFE-IAM strongly opposes any further cuts to federal employees’ retirement security.
NATIONAL
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NFFE
National Federation of
Federal Employees
Chicago, IL
