The Congressional Budget Office (CBO) released a report last week outlining ways to trim the federal deficit over the next ten years.
Some of those recommendations put the cross-hairs on the retirement benefits of federal workers.
More from the Washington Post:
Options specific to federal employees and retirees include:
– Basing the calculation of retirement benefits for those who retire in 2016 and later on the highest five consecutive salary years rather than the currently used three years, for a 10-year saving of $3.1 billion.
– Shaving a half-percentage point off the annual federal employee raises indicated by a pay law’s formula — which has not been used in pay-setting decisions of recent years in any event — for a 10-year saving of $53.6 billion.
– Allowing federal agencies to fill only one of every three vacancies, with certain exceptions, until the workforce is reduced by 10 percent, for a 10-year saving of $49.4 billion; agencies would not be allowed to backfill with contractors.
Also, one option, changing to the “chained” Consumer Price Index, would impact federal retirement along with Social Security, military retirement and various other programs indexed for inflation. That measure is designed to take into account changes in what consumers buy as the prices of certain goods rise. Using that measure would hold down the rate of increase by a quarter of a percentage point each year compared with the current method, meaning spending $116 billion less over 10 years, CBO said.
The full report can be read here.
Photo Credit: 401(K) 2012 via Flickr Creative Commons License
