Retirement Plans Employee Contributions Should be Raised, Obama Says
Employee contributions to federal workers’ retirement plans should be raised to help pay for the jobs creation package, President Obama said Monday.
Under the plan, the employee contribution would increase by 1.2 percentage points over three years beginning in 2013, generating $21 billion in savings over 10 years.
The American Federation of Government Employees called the plan unfair. An employee with an annual salary of $47,500 would have $570 taken out of their pay annually, AFGE told The Washington Post.
“Asking federal employees to accept additional cuts to their take-home pay is unfair, especially at a time when citizens are demanding more services from their government,” AFGE President John Gage told the Post. “This is a double whammy for federal employees, who are facing the same economic hardships as most other Americans. Enough is enough.”
Federal employees already are under a two-year pay freeze that was imposed in January.
Obama also called for capping payments to individual contractors at the annual pay level of the senior-most federal civil servants, which is currently $200,000.
“Setting the cap at this level would result in estimated savings of at least $300 million annually, and would bring greater parity between federal and contractor executives’ compensation,” the White House told the Post.