President Trump repeats call to trim federal retirement benefits, switch to DC plan

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President Trump repeats call to trim federal retirement benefits, switch to DC plan – Pensions & Investments







































































<br /> <!-- Swiftype Variables --> <br /> President Donald Trump’s third federal budget proposal is again calling for changes to federal retirement benefits.Hazel Bradford<br /> <br /> President Donald Trump’s third federal budget proposal is again calling for changes to federal retirement benefits that would increase employee contributions and reduce or eliminate increases to cost-of-living adjustments among other changes.</p> <p>The proposal released Monday also repeats a call to reduce the interest rate for the $554 billion Thrift Savings Plan’s G Fund, Washington, and to switch newer federal employees to a defined contribution plan.</p> <p>The White House estimated that between retirement and health-care benefit changes, the government would save $5 billion in 2020 and $102 billion over the next 10 years.</p> <p>TSP spokeswoman Kim Weaver said in a statement that officials there would oppose changes to the G Fund interest rate.</p> <p>The proposal seeks to increase employee contributions to the Federal Employees Retirement System 1 percentage point each year for six years, without any corresponding benefit increase, to reach a 50/50 split with the employer. Participants in the Civil Service Retirement System would have their COLAs reduced by 0.5 percentage points each year. A supplemental annuity for workers retiring early before they can draw Social Security would be eliminated.</p> <p>The National Active and Retired Federal Employees Association said in a statement that the proposed changes would equal $177.1 billion in cuts to retirement benefits already earned, and that COLA adjustments for participants in FERS would cost a typical retiree nearly $250,000.</p> <p>“President Trump’s budget breaks promises to both current and future retirees, reneges on commitments made to our nation’s public servants, and sends a very powerful message about the value this administration places on civil service,” NARFE National President Ken Thomas said in the same statement.</p> <p>Congress has declined to act on the proposals in previous years. </p> <p>

































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