House Democrats Pen Letter Blasting Proposed Federal Retirement Cuts
June 15, 2017
More than 100 Democratic members of Congress sent a letter to House Speaker Paul Ryan and Minority Leader Nancy Pelosi Thursday to oppose the cuts to federal employee retirement programs as outlined in President Trump’s fiscal 2018 budget proposal.
Lawmakers, led by Reps. Jamie Raskin, D-Md., and Gerry Connolly, D-Va., described Trump’s budget request as an “assault” on federal workers, retirees and their families, calling the proposed reforms to employee retirement programs “tantamount to a pay cut.”
While the Trump budget would give civilian federal employees a 1.9 percent pay hike in 2018 and military personnel a 2.1 percent raise next year, it proposes a 1 percent increase in employees’ contributions to the Federal Employees Retirement System each year for the next six years. It also would reduce by O.5 percent cost of living adjustments for Civil Service Retirement System beneficiaries, and eliminate COLAs altogether for FERS employees and retirees.
Other proposals in the budget would change the calculation for pension payments to be based on federal employees’ highest five years of salary instead of the current highest three, and eliminate the supplement for employees who retire before Social Security kicks in at age 62.
The Democratic coalition particularly called out the decision to target both current and future employees and retirees’ benefits as unfair.
“This breaks a promise,” they wrote. “We should not alter policies that families have planned their lives around, particularly when it affects current retirees with limited ability to make up for unforeseen reductions in expected income.”
The letter to House leadership is just the latest backlash against the Trump administration’s proposals on federal workers’ retirement benefits. Federal unions and management groups roundly criticized the measures upon the budget request’s release, and some Democrats—including Connolly—have already spoken out in opposition.
Officials with the American Federation of Government Employees announced Wednesday that they recently sent letters to every member of Congress urging lawmakers to fight the retirement cuts.
Read the article HERE.
MyRetirementPayCheck Website: How are Social Security benefits calculated?
-First, a worker’s previous earnings are restated in terms of today’s wages to reflect wage growth.
-Second, earnings for the highest 35 years are averaged and divided by the number of months in 35 years to arrive at Average Indexed Monthly Earnings (AIME).
-Third, the Social Security benefit formula is applied to AIME to produce the Primary Insurance Amount (PIA), the benefit payable at Full Retirement Age (FRA).
Retirement Benefits: The amount of a person’s retirement benefit depends primarily on his or her lifetime earnings. We index such earnings (that is, convert past earnings to approximately their equivalent values near the time of the person’s retirement) using the national average wage index. See how we use earnings to compute a retirement benefit amount.
Amount per month of retirement checks: The maximum monthly Social Security benefit payment for a person retiring in 2016 at full retirement age is $2,639. However, the maximum allowable benefit amount is only payable to those who had the maximum taxable earnings for at least 35 working years. Depending on when you retire and how much you made while working, your benefits may be considerably less. The estimated average monthly benefit for “all retired workers” in 2016 is $1,341.
Government Retirement Services:
How it is computed:
BASIC FERS: Under Age 62 at Separation for Retirement, OR
Age 62 or older With Less Than 20 Years of Service 1 percent of your high-3 average salary for each year of service
Age 62 or Older at Separation With 20 or More Years of Service 1.1 percent of your high-3 average salary for each year of service.
(Not having any background in benefits, I used the Social Security calculator assuming birth at 1951 and retiring 2018. Remember though that is based on 30 years of work and whatever else Social Security is using in the calculation.)
According to the Social Security calculator a citizen making $58,000 might expect to receive around $1,274 per month in 2017 dollars. One making $86,000 may see a check of about $1,688. Whereas someone currently retired having been born in 1951 and with an ending salary of $36,000 would only be receiving about $1,140 right now. If like many lower middle class that person only ended up making about $25,000 (poverty level for a household of four) just before they retired, then the most they would receive per month according to the calculator would be $950 or at individual poverty level of $12,000, about $650 currently in 2017 dollars.
Senate.gov: The compensation for most Senators, Representatives, Delegates, and the Resident Commissioner from Puerto Rico is $174,000. Members of Congress receive salaries only during the terms for which they are elected. They do not receive salaries beyond their terms of office.
Since January 1, 1984, participation in Social Security has been mandatory for all Members of Congress. The amount of any benefit and required retirement contribution varies depending on retirement plan, age, and length of service (with a minimum of at least five years of service for any benefit).
According to the same Social Security calculator, a retirement amount of $174,000 would be about $2,712 per month using 2017 dollars.
Permissible “outside earned income” for Representatives and Senators is limited to 15% of the annual rate of basic pay for level II of the Executive Schedule. According to the House Ethics Committee and Senate Ethics Committee, the 2016 limit is $27,495.
DownSizingGovernment: Chris Edwards, September 20, 2016
The federal government employs 2.1 million civilian workers in hundreds of agencies at offices across the nation. In 2015 federal workers earned 76 percent more, on average, than private-sector workers.
In 2015 federal civilian workers had an average wage of $86,365, according to the U.S. Bureau of Economic Analysis (BEA). By comparison, the average wage for the nation’s 112 million private-sector workers was $58,726.
A 2010 USA Today analysis of more than 200 occupations found that federal workers typically have wages 20 percent higher than private sector workers. The analysis found that “federal employees earn higher average salaries than private sector workers in more than 8 out of 10 occupations.” (mentioned also was that federal workers “might be less educated” than private sector.
Private industry workers, unless they have specific contracts, have to worry every day about whether they will have a job the next morning, for many reasons like poor management decisions, accidents, being laid off, phased out due to economy, or as temporary workers. Most go to work not knowing what tomorrow will bring unless they are in unions which brings a new set of work-related problems.
Federal employees have tenure rights unlike many private sector jobs. This has opened federal employment to retain poor workers along with the ones who are doing a good job. They have no risk of job loss for miscalculations, poor performance skills, or errors of judgement.
Elected officials who stay in public office as career politicians certainly have managed for the most part to “feather” their nests beyond the acceptable limits through devious means or through inheritance. There is no way a politician beginning a career and having only worked in lower level positions prior to taking office can build up a net worth of millions of dollars during his political career otherwise.
Federal retirement is above the social security retirement compensation the average business person can hope to make. So why are they so worried? Social Security has been drained by congress when it was supposed to be a protected account just as some of those on government payroll have found ways to divert our taxpayer dollars into other avenues or wasteful spending.
Now the average Joe has to worry about IF he will even be given a Social Security check or not–but government employees don’t. He also has to worry because employers have had to make cost-cutting, bone-deep decisions like fewer hours for their workers and sometimes twice the work and responsibilities piled upon those they retain just to keep doors open and be competitive.
If those same federal workers had been following the same actions and rules as private sector workers, then maybe there would not have been so many lackadaisical attitudes or so much corruption. Maybe they would have been more likely to know their jobs and do the best they could to make sure their work was completed and mostly accurate. Maybe they would have been less inclined to fall into “socialized government,” “subversive activities,” and union work on taxpayer time. Maybe they would have been more inclined to work on the job they were hired to do and get it done efficiently and effectively.
Those congress members should have been paying closer attention to doing their jobs correctly and then we would perhaps have been in less of a financial mess than we are now. Frankly, congress members should fall under the same rules as any other Social Security groups…if they have greater assets than say $1 million dollars at retirement, they should have their federal retirement checks curtailed or removed to compensate.
No one wants to see some person lose what they worked for in their retirement years, but we ALL face that daily and without the government umbrella and soft landing mattress to protect us. Why should we pay for others to be guaranteed a life of better living based on retirement figures than we ourselves have to deal with?
I do not feel we as taxpayers should have to pay for federal overspending, stupidity, and corruption. President Trump is tackling exactly what he said…defending the rights of the taxpayers. If this means less federal workers but more responsible, effective employees actually working more efficiently, then good.