FWA Letter to Payroll Tax Conferees: Feds Have Sacrificed

Dear Conferee:

On behalf of the Federal Workers Alliance (FWA), comprising 22 unions representing over 300,000 federal employees, we ask you to reject financing the Social Security payroll tax extension at the expense of the federal employees whom we represent. The House-passed bill, H.R. 3630, funds these extensions by penalizing federal workers in a number of ways.  The Senate version of this legislation rejected these harmful “pay-fors,” and we ask that you reject them in the conference committee.

First, we ask that you reject the extension of the pay freeze. Federal employees have already contributed $60 billion to deficit reduction through the existing two-year pay freeze. Based on a two percent calculation for cost-of-living adjustments, the pay freeze results in nearly a

$20,704.35 pay cut for a federal worker earning an annual salary of $50,000 over the next decade, and a $ 47,137.93 pay cut over 20 years.  This significant loss in pay is an unjust burden on the nurses who care for our veterans, law enforcement officers who patrol our borders, civilian defense workers who support our troops’ missions, and inspectors who ensure the safety of our food and medicines.

Second, we ask that you reject the proposed increase in the pension contribution.  H.R. 3630 would require federal workers to contribute an additional 1.5% of their salary to their retirement without any corresponding increase in benefits. Currently, a federal worker who makes $50,000 per year will receive a federal pension of just $15,000 per year after 30 years of service.

Third, we ask that you reject the elimination of the Federal Employee Retirement System (FERS) minimum Social Security supplement for workers not subject to mandatory retirement.  Many workers must retire early for reasons outside their control, such as illness or to care for a sick spouse or parent.  These workers have counted on these funds when planning their retirement and eliminating it now would compromise their retirement security.

Finally, we ask that you reject a proposal to establish a new retirement system for federal employees hired beginning in 2013. This new system would change the pension calculation from the employees’ “high-3” to a “high-5” salary and would increase the current employee contribution from .08 percent to 4 percent. It is estimated that these changes would lower pension values by approximately 30 percent despite a much higher contribution on the part of those workers. Data shows that current retirement benefits, such as FERS, are one of the key ways that the federal government recruits and retains the best and brightest workers.  These changes would compromise that important standard.

We ask that you reject these provisions in H.R. 3630 that would freeze pay and cut benefits for federal workers in the House-Senate conference committee.  Thank you for your consideration of this request.

Sincerely,

William R. Dougan

Chairman