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National Active and Retired Federal Employees Association

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NARFE Reaction to President Trump’s First Budget: An Egregious, Unprecedented Attack on Federal Employees and Retirees
FOR IMMEDIATE RELEASE Contact: Jessica Klement
May 23, 2017 jklement@narfe.org
  703-838-7760


Alexandria, VA
– The National Active and Retired Federal Employees Association (NARFE) expressed outrage following the release of President Trump’s first budget request to Congress. NARFE President Richard G. Thissen issued the following statement:

“President Trump’s first full budget is nothing short of an egregious, unprecedented attack on federal employees and retirees. It goes far beyond previous attacks on the federal community by taking aim at the already-earned benefits of our nation’s public servants. This does not just change the rules of the game going forward; it breaks an implicit bargain by eroding the value of hard-earned pensions that were promised to federal employees in exchange for their service to this country.

“While the president purports to defend government annuities, such as Social Security, he singles out federal annuitants by limiting and even eliminating cost-of-living adjustments (COLAs) for those already retired and living on fixed incomes. This is nothing more than punishment for those who have served their country through federal service and a broken campaign promise to protect retirement security. Denying federal retirees the opportunity to have modest pensions that keep pace with inflation will hardly make America great.

“At the height of hypocrisy, the budget promotes tax cuts yet forces a tax on mostly middle-class federal employees through an increase in retirement contributions. I remind the president that federal employees are taxpayers, too. Additionally, nearly 25 percent of current federal workers are veterans. The disrespect this budget shows to those who defend our country undermines morale and denigrates the integrity and commitment of those civil servants who serve in every American community.

“This administration and this country need a quality and experienced civil service to ensure the faithful execution of our laws and the delivery of services critical to hardworking taxpayers. Arbitrarily decreasing benefits will lead not only to an exodus of experienced employees, but also will threaten the very safety of our nation.

“While this budget proposal contains some positive proposals for federal workers – notably, a 1.9 percent pay raise and six weeks of paid parental leave – overall, it is unconscionable. I urge Congress to recognize the president’s budget as a flawed document. Every day, federal employees and retirees put country first. Our spending priorities should as well. This budget is a giant leap in the wrong direction.”

NARFE objects to the following fiscal year 2018 budget proposals:

  • COLAs for current and future Federal Employees Retirement System (FERS) retirees would be eliminated altogether.
  • COLAs for Civil Service Retirement System (CSRS) retirees would be reduced by 0.5 percent each year from what it would have been otherwise.
  • Federal employees covered under FERS would see employee contributions to their annuities increased by 1 percent each year for the next six years, without any corresponding benefit increase. This will cost FERS employees $71.2 billion over the next 10 years, and more thereafter.
  • The FERS Annuity Supplement would be eliminated for new retirees starting in fiscal year 2018.
  • Federal pensions would be based on the average of the highest five years of salary instead of the highest three.

NARFE analysis of these proposals:

Limiting COLAs for CSRS retirees and eliminating them for FERS retirees would drastically reduce the earned retirement benefits of public servants with long tenures. When combined, these proposals save $41.8 billion over 10 years – at a cost of lost income and earning power to federal retirees. When the historical average for COLAs over the past 40 years is applied to the median annual 2016 CSRS annuity of $37,416 and the median annual FERS annuity of $12,984, the data shows that these policies would deprive retirees of a substantial amount of their earned benefits over time, as shown below.

The average FERS annuitant would lose:
•    $23,430 over 10 years
•    $99,471 over 20 years
•    $246,185 over 30 years
•    $487,829 over 40 years

The average CSRS annuitant would lose:
•    $12,598 over 10 years
•    $60,576 over 20 years
•    $169,874 over 30 years
•    $381,418 over 40 years

This clearly shows that the Trump budget will cost federal retirees, cumulatively, hundreds of thousands of dollars over their years of retirement, and is nothing less than the theft of promised and hard-earned pensions from our nation’s dedicated public servants. 

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The National Active and Retired Federal Employees Association (NARFE), one of America’s oldest and largest associations, was founded in 1921 with the mission of protecting the earned rights and benefits of America’s active and retired federal workers. The largest federal employee/retiree organization, NARFE represents the retirement interests of nearly five million current and future federal annuitants, spouses and survivors.

 

National Active and Retired Federal Employees Association
NARFE (National Active and Retired Federal Employees Association)
606 N. Washington St., Alexandria, VA 22314, Phone: (703) 838-7760, Fax: (703) 838-7785.

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