On The Chopping Block: Federal Worker Pensions - by Stephen Lendman
Bipartisan support endorses ending vital social benefits incrementally, principally Social Security, Medicare, Medicaid, healthcare for those who can't afford it, and public pensions.
Notably, deep Medicare cuts were made. Much more is planned, including slashing Medicaid. Now federal pensions are being targeted. Civilian federal employees receive benefits under the Federal Employees Retirement System (FERS), consisting of three components:
-- a FERS annuity defined benefit plan;
-- mandatory Social Security participation; however most Civil Service Retirement System (CSRS) employees aren't part of Social Security unless they qualify separately from additional private sector employment; and
-- the Thrift Savings Plan (TSP), a 401(k) type defined contribution plan.
On March 19, Senators Tom Coburn (R. OK) and Richard Burr (R. NC) introduced S. 644: Public-Private Employee Retirement Parity Act to prohibit federal annuities for employees hired after 2012. In other words, beginning January 1, 2013, they want defined pensions for newly hired federal workers ended, eventually eliminating unfunded ones altogether.
Although the other two FERS components are maintained, S. 644 is another step toward halting all federal obligations to working Americans to provide more funds for imperial wars, corporate handouts, and greater tax benefits for America's super-rich. But don't expect Congress, Obama, or major media reports to explain.
Coburn justified S. 644, claiming federal workers earn over 20% more than private sector ones. In fact, according to a National Institute on Retirement Security (NIRS) study titled, "Out of Balance? Comparing Public and Private Sector Compensation Over 20 Years:"
Wages and benefits for public workers are lower than for private sector ones with comparable earnings determinants, such as education and work experience. Moreover, the pay gap widened over the last 15 years. Other studies agree, saying public workers can earn more by using their skills in private sector jobs.
As a result, the National Federation of Federal Employees (NFFE) called S. 644 unfair. For example, a federal employee earning on average $50,000 in his or her three highest earning years, with 30 years of service, gets a $15,000 annual pension, hardly a generous amount.
NFFE also said FERS pensions are less than under the Civil Service Retirement System (CSRS), the one FERS replaced in 1986 for new hires.
Coburn and Burr claim defined benefit federal pensions are going broke. Last September, in fact, the Congressional Research Service (CRS) denied insolvency problems, saying FERS and CSRS (for eligible employees) will be able to meet their obligations "in perpetuity." Moreover, CRS expects their assets to grow for decades, reaching $15.3 trillion in 2080, far exceeding outlays.
Nonetheless, congressional Republicans, known as "You Cutters," plan other slash and burn efforts to:
-- cut federal pay;
-- freeze hiring;