Want the latest retirement plan adviser news and insights? Sign up for PLANADVISER newsletters.
The Markets February 21, 2012
Federal Employee Pension Contributions To Be Increased
New federal employees will pay 2.3% more toward their government pensions under a new deal approved by Congress.
Reported by Tara Cantore
According to news reports, federal employees hired after December 31, 2012, and those with less than five years of federal service will need to contribute an additional 2.3% for a total of 3.1% to their pension plan to help pay for a year-long extension of unemployment benefits and the payroll tax cut extension. The pension hike is a permanent change.
There are still other legislative efforts pending in Congress, which would affect federal pay and benefits. President Obama’s FY 2013 budget proposal recommends increasing the amount federal employees contribute to their pensions by a total of 1.2% over three years starting in 2013.