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  • Writer's pictureLynette A. Whitfield

OPM Director Proposes Cuts to Federal Employee Retirement Programs

In less than two months since his appointment to the position of Office of Personnel Managment (OPM) Director, Jeff T.H. Pon has proposed $143.5 billion dollars in cuts to Federal Retirement Programs. In his May 4, 2018, memo to Paul D. Ryan, Speaker of the U.S. House of Representatives, Director Pon outlined four legislative proposals that would result in substantial cuts to federal retirement benefits, in an effort to bring them more in line with the private sector.

The legislative proposals put forth by Director Pon include the elimination of the Federal Employees' Retirement System Annuity Supplement for new retirees and the supplementary annuity for survivor annuitants. The proposals would also increase the time in service used to calculate an annuitants average pay from the current "high three" salary to a proposed "high five" salary by averaging the employee's basic pay over a five-year period. The proposal would also require FERS employees to fund a larger portion of their retirement benefit, and would reduce the cost of living adjustments (COLAs) for CSRS employees and with the exception of FERS disability annuitants, the proposals would eliminate COLAs altogether for FERS employees.

As noted in a Washington Post article, although Director Pon signed the memo, these proposals were included in the Administration's budget proposal which was released in February, before Director Pon was in office. Director Pon's memo was released by J. David Cox Sr., Presiedent of the American Federation of Government Employees (AFGE), after he received it from a congressional source.

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