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Federal Employees News Digest : Nov 25, 2013
November 25, 2013 Vol. 63, No. 19 3 Visit us on the Internet at www.FederalDaily.com federal workers with less education are paid more than private-sector workers in comparable occupations, federal workers with professional and advanced degrees are paid less than their private-sector counterparts," the report said. "Thus, smaller across-the-board increases in fed- eral pay would bring federal and private pay closer to parity for less educated workers but widen the gap between fed- eral and private-sector workers in jobs that require more education. For federal employees who are eligible to retire but have not done so, such an action also could reduce the incentive to continue working." Higher contributions Another deficit-cutting option examined in the report would require employees enrolled in the Civil Service Retirement System and those enrolled in the Federal Employees Retirement System before 2013 to contribute an addi- tional 1.2 percent of their salary toward their retirement annuities, while agency contributions would remain the same. The rise in contributions would be phased in over the next three years. The option would not affect FERS employ- ees hired in 2013 or later, because they already make or will make larger con- tributions. About 85 percent of current civilian employees are accruing benefits through FERS. According to CBO estimates, the option would increase federal revenues by $19 billion from 2014 through 2023. Reduced pensions The report also analyzes an option for reducing federal and military pensions for new retirees. Under that option, for those retiring beginning in January 2015, the govern- ment would switch to a high-five rather than high-three average to calculate pen- sions for civilian retirees, and a 60-month average for military retirees rather than the current 36-month average used now. CSRS and military retirees typically continued from page 1 Don’t miss our discussion of weekly news topics. Discuss these stories and more with your fellow federal workers at www.FederalSoup.com. continued on page 5 have larger annuities than FERS retirees, so they generally would see the larg- est reductions in benefits, CBO said. According to the report, if implemented in 2015, the option would affect about 67,000 new FERS retirees, 28,000 in CSRS, and 60,000 in the military. CBO said the change would reduce annuities by an average of about 3 percent for new retirees. The move would save $6 billion from 2015 through 2023, according to CBO estimates. Chained CPI for COLAs CBO also reviews a plan for lower- ing cost-of-living-adjustment outlays by shifting from the Consumer Price Index to the so-called chained CPI for calculat- ing COLAs for Social Security, and mili- tary and federal pensions. CPI also is used to determine vari- ous thresholds, payment rates, and other factors related to eligibility and bene- fits levels for a range of other manda- tory federal programs beyond pensions, including veterans' disability compen- sation, Supplemental Security Income, Medicare, Medicaid, the health insur- ance exchanges established under the Affordable Care Act, Pell grants, stu- dent loans, the Supplemental Nutrition Assistance Program (SNAP), child nutri- tion programs, and other programs. While CBO said a switch to chained CPI would overcome a statistical short- coming of the CPI known as "small sam- ple bias," the report also detailed potential drawbacks of a changeover. "One argument against using the chained CPI, and thereby reducing COLAs in Social Security and other federal retire- ment programs, is that the prices faced by Social Security beneficiaries and other retirees generally rise faster than prices faced by the population at large," the report stated. "That issue may be of particu- lar concern because Social Security and pension benefits are the main source of income for many older people. "BLS [Bureau of Labor Statistics] computes an unofficial price index that reflects the purchasing patterns of older people, called the experimental CPI for Americans 62 years of age and older (CPI- E). Since 1982 (the earliest date for which that index has been computed), annual inflation as measured by the CPI-E has been 0.2 percentage points higher, on average, than inflation as measured by the traditional CPI," the report said. Tricare With spending for military health care increasing, the report also analyzes pro- posals that target Tricare health insur- ance. One proposal examined in the report would raise enrollment fees, deductibles, and copayments for working-age military retirees who want to use Tricare rather than other insurance, such as insurance offered by an employer. A second option would be to make working-age military retirees and their families ineligible for Tricare Prime, which is the most expensive of the Defense Department's three programs. These retirees instead could enroll in Tricare Standard or Extra during open season. Under the first option, CBO said, high- er out-of-pocket costs would cause about 200,000 of these retirees and their family members to leave Prime, with many them switching to other Tricare plans that cost the government less. Under the second alternative, all 1.6 million of this group of retirees and family members currently using Tricare Prime would be disenrolled from the program. CBO estimates that if fees, deductibles, and copayments were modified under to the first alternative, discretionary outlays would be reduced by $20 billion between 2015 and 2023, assuming appropriations would be reduced accordingly. Under
Nov 18, 2013
Dec 2, 2013