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OPM lays out proposed changes to fed benefits

Office of Personnel Management Director Jeff Pon has proposed changes to federal employees’ retirement benefits to more align them with that of the private sector.

In a letter to House Speaker Paul Ryan (R-Wis.), Pon proposed four main changes to federal employee retirement benefits that will affect 2.6 million federal retirees and survivors who receive monthly annuity payments:

1) Eliminate the Federal Employees’ Retirement System annuity supplements for new retirees and survivor annuitants;

2) Increase the Civil Service Retirement System and FERS average pay period to five years from three years;

3) Increase FERS employees’ contribution to their retirement to one percent each year until they reach 7.25 percent of basic pay; and

4) Reduce or eliminate retirement cost-of-living adjustments.

The agency expects to save an estimated $143 billion over ten years if all four proposes are enacted.

“The Office of Management and Budget (OMB) has advised there is no objection to the transmittal of these legislative proposals to the Congress and that their enactment would be in accord with the program of the president,” Pon said in the letter.

He asked that Congress give “prompt and favorable” consideration of the proposals.

Read the full letter and more details on each proposal here.

Reader comments

Mon, May 14, 2018

The federal government could save a lot of money fast by implementing the following: 1) Reduce the number of congress and senate representatives by 1 for each state. 2) Reduce the congress and senate's salaries by $120,000 per year. 3) Have them work a true 40 hr week and they would have to clock in and out. 4) No more free parking at air ports, gym and taxpayer supported cafeterias. 5) Reduce travel to congress and senate, they do nothing in DC why should they travel and do nothing other places. 6) Reduce the number of ineffectual management bloats in government, reduce the number of political appointees. 7) Imposed term limits on congress and senate and reduce benefits to what is available to the rank and file federal employees. Now on the other hand place those monies saved into reasonable cost of living raises and protection of retirement benefits. This wont happen because the swamp is just that so many bottom feeders per square inch!

Sun, May 13, 2018

Reducing earned benefits, such as the promised pension COLAs, is a contract breach. The effect is the same as the federal government seizing a portion of everyone's 401k by reneging on their tax-free status

Fri, May 11, 2018 Mary Alvarez

No matter how you put it, this is an erosion of benefits promised to the federal employee. First they created this new "FERS" retirement with "TSP" as an added factor. To entice the federal employee to contribute to TSP to increase their retirement. Offering TSP matching to FERS employees up to 5% (dollar for dollar). That has since changed to 3% dollar for dollar and .50 cents on the dollar for the remaining 2%. Now they want to do away with the supplement and increase our retirement contribution plus continue to pay full social security. What will remain of our pay checks?

Thu, May 10, 2018 David H Converse, TX

Another instance of balancing the budget on the backs of the middle class. I don't believe we should have to pay for the tax cuts for the 1%. Hopefully, this won't pass.

Wed, May 9, 2018

I'd like to see some of the give away programs cut before the things that people actually were promised and worked for be slashed. But, that won't get any of the politicians any votes.

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Edward A. Zurndorfer Certified Financial Planner
Mike Causey Columnist
Tom Fox VP for Leadership and Innovation, Partnership for Public Service
Mathew B. Tully Legal Analyst

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