Plan to Cut Federal Employee Pensions Advances in House

The House Committee on Oversight and Government Reform has advanced a proposal that would revamp the federal pension system by gradually reducing benefits.

The panel voted 22 to 21 on Wednesday to pass the measure, voting mostly along party lines, with Representative Michael Turner, R-Ohio, joining Democrats in opposition.

“I oppose any and all efforts to reduce federal spending by taking money from the hard-earned pensions of federal workers,” Turner said in a statement issued prior to the vote. “These pensions are not giveaways—they are promises to federal workers in exchange for their dedicated service.”

The proposal serves as the House Oversight Committee’s portion of the GOP’s budget reconciliation process, with goals of extending President Donald Trump’s 2017 tax cuts and severely cutting government spending.

During Wednesday’s hearing, Turner doubled down on his dissent, expressing confidence that the proposals will not end up in the larger reconciliation bill, based on his conversations with fellow Republicans.

“I do not think that [the proposal] is fair and represents either Republican values or American values,” he said.

The House Oversight Committee’s proposal, detailed last week, would make several changes to how federal civilian employees pensions work.

Representative James Comer, R-Kentucky and chairman of the Oversight Committee, said during the hearing that the changes were necessary, since federal employees’ retirement benefits outpace those received by private sector workers.

He justified the cuts by citing a 2024 Congressional Budget Office study that compared federal and private sector employees benefits from 2022, finding that federal employees received 43% more in benefits than private sector employees. Comer did not mention that federal employees have 10% lower wages than private sector employees, which was also outlined in the report.

“All of these benefits are funded by hardworking taxpayers in the private sector and, increasingly now, federal government borrowing,” Comer said during the hearing.

The bill advanced by the Oversight Committee includes raising all federal and postal employees’ retirement contribution rates to 4.4%. The current rates range depending on the employee’s date of hire as follows: 0.8% if hired before 2012; 3.1% if hired in 2013; and 4.4% if hired in 2014 or later, according to the U.S. Department of Commerce.

New federal retirees would also lose out on the extra annuity payment currently offered to those who retire before age 62, which lasts until they reach retirement age.

The proposal would also reduce benefit payments by averaging the highest average five years of salary, compared with the current highest average of three years. In total, according to the House Oversight Committee, the measures would reduce the budget by $50.9 billion.

The bill will now head to the House Budget Committee Budget for further consideration as part of the larger budget reconciliation package.