2013 Budget – Pay Changes – .5% Pay Raise, Increase Retirement Contribution by .4%, FERS Supplement Cancelled

The White House just announced their fiscal 2013 budget request.
Some good recap from GovExec & Washington Post

A couple big pay updates:

1) Pay raise -Bump of .5% pay raise in 2013 for civilians, 1.7 for military

2) Increase retirement contribution – Increase the percentage feds pay into their retirement by 1.2 (.4 percent each year for over 3 years by 2013. This is for the FERS supplement that folks often don’t talk about – it’s a smaller version of t

3) Eliminate the FERS Annuity supplement for new employees – This is a big deal and not getting a whole lot of press. Right now if you have joined the federal government in last decade, you have the Thrift Savings Plan (which is basically a 401k plan) as well as a FERS annuity supplement. The FERS supplement is a defined benefit plan that roughly equals 1% of your salary X number of years you worked. So if you worked for 30 years in govt, you get 30% of your salary + your TSP. Eliminating this piece is big although it is increasingly common these days

What’s your take?

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Terrence (Terry) Hill

Actually, this is better than some of the Congressional proposals. I think it is fair that they only remove the FERS Annuity Supplement for new employees. Taking it away from current employees would break trust. I think it is fair to increase the retirement contribution and easing it over 3 years is better than all at once. I guess a net .1% increase is better than a net decrease.

Terrence (Terry) Hill

I almost forgot to mention that I am most intrigued by the President’s proposal to establish a “Commission on Federal Public Service Reform” that will develop recommendations for reforms to modernize Federal HR policies and practices, including compensation, staff development and mobility, and performance and motivation. Can’t wait to see what they come up with!