House Panel Approves Bill
To Cut Postal, Federal Pensions

APWU News Bulletin 05-2012, Feb. 9, 2012 | PDF

A House committee approved legislation on Feb. 7 that would cut pensions for postal and federal employees, while increasing the contributions the workers must make toward their retirement. The party-line vote was 22-16, with Republicans voting in favor of the retirement cuts and Democrats voting against.

“This bill is an outrageous attack on postal and federal employees,” said APWU President Cliff Guffey. “Some politicians are quick to cut benefits for middle-class workers, but they fight to the death to protect tax breaks for the super-rich.”

“Despite its name, the ‘Securing Annuities for Federal Employees Act’ would cut retirement benefits for postal and federal workers and make them pay more for less,” said Legislative Director Myke Reid. “This bill would amount to a pay cut for our members.”

The legislation (H.R. 3813) was shepherded through the House Oversight and Government Reform Committee by a pair of politicians who are well-known opponents of postal workers: Committee Chairman Darrell Issa (R-CA) and Rep. Dennis Ross (R-FL). The two are co-sponsors of H.R. 2309, a bill that would destroy the Postal Service as we know it.

Increases Costs, Cuts Benefits

H.R. 3813 would increase the amount postal and federal employees contribute to their retirement by 1.5 percent, with the increase phased in over three years, beginning in 2013.

Employees with less than five years of service would face an increase of 3.2 percent. (Employees in the Federal Employee Retirement System [FERS] currently pay 0.8 percent of salary into the pension fund. Employees enrolled in the Civil Service Retirement System [CSRS] currently pay 7 percent to their retirement system.)

It also would reduce pensions for employees with less than five years of service by calculating annuities based on the average of employees’ high-five salary years instead of their high-three years, which is the current method. In addition, their pensions would be calculated at a lower rate of 0.7 percent per year, down from 1 percent.

The measure would eliminate the supplemental annuity provision, which augments benefits for employees who retire before they are eligible for Social Security benefits at age 62.

Following committee adoption of the bill, the House Rules Committee voted to merge it with the H.R. 7, a $260 billion highway bill, which the House is expected to consider during the week of Feb. 13.

APWU members are encouraged to contact their representative as soon as possible and urge them to oppose the bill as it is currently written.

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