New 2020 budget calls for eliminating pensions for some new feds

A senior administration official has confirmed that the Trump administration's fiscal year 2020 budget request would establish a new retirement program for some federal workers that would bring federal benefits more aligned with the private sector, which often does not offer pensions, Government Executive reports.

Under current system, term employees are all enrolled in the Federal Employees Retirement System, which consists of a defined benefit annuity, the TSP, and Social Security, and under the proposal, all new term appointments would receive access to the TSP and a higher employer contribution, but they would not be able to benefit from the defined benefit portion of FERS, according the to the report.

The report notes that a National Active and Retired Federal Employees Association official said that while it seems to be a good idea, she is concerned about what it means for employees who use term appointments as a spring board into a career in civil service, adding that under the current system, anyone who renews their term employment could gain access to the FERS annuity after five years of federal service, but that would no longer be possible under the proposed change, and term employees who eventually join the competitive service get no credit toward retirement for the time they spent under contract.

2021 Digital Almanac

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