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Obama signs federal pension provision

It’s official—President Obama on Feb. 22 signed into law the requirement that employees who join the federal workforce after Dec. 31, 2012, pay a higher percentage of their salary toward their pensions.

It’s official—President Obama on Feb. 22 signed into law the requirement that employees who join the federal workforce after Dec. 31, 2012, pay a higher percentage of their salary toward their pensions. Current federal employees will not be affected by the new requirement.

Those new employees hired after Dec. 31 who have less than five years of creditable federal service will pay 3.1 percent toward their pensions, 2.3 percent more than the 0.8 percent paid by current employees under the Federal Employees Retirement System.

The change was part of H.R. 3630, the Middle Class Tax Relief and Job Creation Act, which extends through Dec. 31, 2012, the payroll tax cut, funding for unemployment insurance benefits, and a delay in the reduction of Medicare payments paid to physicians.

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