NARFE - Pennsylvania Federation
Pennsylvania Federation President George Shal Welcomes You

On behalf of the Officers and Members of the Pennsylvania Federation of NARFE, I am pleased to welcome you to our website.  Thank you for your interest in and support of the National Active and Retired Federal Employees Association. 

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NEW RETIREMENT PROPOSALS
SEPTEMBER 2017
2nd VP PHILIP R GOLDSTEIN

    This month I will concentrate on just one issue, and attempt to do so in depth. Some of the material was extracted from Government Executive of September 7, 2017.

   Congress is, again, reevaluating the Federal Employees retirement system for current employees. This is once again an attempt to balance the budget on the backs of Federal employees.

   Up until 1986 we had the Civil Service Retirement System (CSRS). This was a defined benefits system that was based on your length of service, the amount you had earned during your service, and your salary of the three highest year’s earnings. You also had your Thrift Savings Plan (TSP) if you so desired, but it was entirely at your expense.

   Starting in 1987 new employees could not enroll in the CSRS. If you were already in that system you could stay. There was a lot of pressure to induce employees to drop out of CSRS and join the new system, the Federal Employees Retirement System (FERS). It had three legs - you could now participate in Social Security, a smaller defined benefits component, and a TSP component that the Government would now contribute up to a specified limit. The advertised benefit of the new plan was that it was portable if you left the government. (Of course, the government would no longer contribute to your TSP if you left Government employment.) Depending on how you managed your TSP, you could wind up with a much larger annuity then you would under CSRS. The down side was that if you had to retire when the stock market was down, or if you had made bad choices as to where you had put your money, you could be in trouble. One of the objectives of the government was that the new system would reduce the overall contribution of the government.

   Now, today, taxpayers spend more than $90 billion annually on retirement benefits for civilian workers, a figure that has made those benefits a prime target for Congressional budget cutters. Under pressure to reduce the federal budget deficit by $32 billion between fiscal 2017 and 2027, the House Oversight and Government Reform Committee earlier this summer asked CBO to evaluate the potential savings associated with changing the retirement system for most federal workers. A report released Tuesday, September 5, 2017, by the Congressional Budget Office outlines some options lawmakers are considering as they seek to rein in costs. The report is 51 pages. I would be happy to email a copy to anyone who requests it. The report has five options:

 Increase the pension contributions to 4.4 percent of salary for all employees. Currently, the rate is 0.8 percent for those hired before 2013; 3.1 percent for those hired in 2013; and 4.4 percent for those hired after 2013. This option would reduce the government’s net costs by 14 percent on a cash basis over the next 10 years.

  1. Decrease the pension contribution rate to 0.8 percent of salary for all employees. While this option would likely help recruiting and retention efforts, it would increase government’s net retirement costs by 10 percent on a cash basis over the next 10 years.
  2. Change the pension formula. Instead of basing retirement benefits on an employee’s three years of highest salary, benefits would be based on an employee’s five years of highest salary. This would reduce the government’s net costs by 1 percent on a cash basis over the next 10 years.
  3. Eliminate the pension, but increase the government’s TSP contribution to 15 percent. This would reduce the government’s net costs by 24 percent on a cash basis over the next 10 years.
  4. Eliminate the pension, but increase the government’s TSP contribution to 10 percent. This would reduce the government’s net costs by 17 percent on a cash basis over the next 10 years.

    There's no guarantee lawmakers will pursue any of the options outlined by CBO, but the White House and some in Congress support cutting federal retirement benefits. It won't happen without a fight though. Others federal employee unions, and NARFE have been sharply critical of efforts to cut federal benefits. 

PHILIP R. GOLDSTEIN
2ND Vice President, Legislation
Pennsylvania Federation
National Active and Retired Federal Employees Association
NARFEPAFedPhilG@prgtag.net

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Legislative Action Highlight: On Wednesday, March 15, 2017, NARFE members from across the Commonweath carried your Federal employee and annuitant concerns  to all 20 Pennsylvania members of Congress, visiting both Senate offices and every one of the 18 Congressional District offices!  We have been spreading the NARFE message and we need you to contact you Member of Congress now and add your voice.

 

NARFE Strategic Planning

NARFE is undergoing many changes and is trying to gain some control over those changes to try to preserve the organization. From time to time we will post items of interest on this page to keep you informed about this process.