3/24/11: NTEU National President Colleen Kelley yesterday took sharp issue with a legislative effort to eliminate the defined benefit portion of the annuity earned by federal workers under the Federal Employees Retirement System (FERS). In this letter to all senators, President Kelley said S. 644, introduced by Sen. Richard Burr (R-N.C.), “is based on a great deal of misinformation.”

The NTEU leader said it is incorrect to say that federal employees receive far more generous retirement benefits than private sector employees; and similarly not true that the FERS system is underfunded. On the contrary, she said, “The FERS annuity is fully pre-funded, with zero money having to be transferred from general revenues.”

Regarding any claims otherwise, she said that “Just because you keep saying something doesn’t make it true.” Kelley added: “The current political atmosphere, where politicians seek a ‘race to the bottom’ for the American people, has to stop.” FERS is comprised of three elements: the defined benefit, a Social Security payment and a portion from the Federal Thrift Savings Account.

The Burr proposal is another in a series of legislative attacks on the pay and benefits of federal workers and on the funding necessary for their agencies to carry out their missions on behalf of the public.

President Kelley noted that federal employees, under FERS—who make up the vast bulk of the federal workforce—pay 6.2 percent of their salary to Social Security, just as private sector employees do. They also pay 0.8 percent of salary toward the FERS defined benefit, noting that private sector employers pay about 98 percent of the cost of their defined benefit plans, an amount she called “very similar to the FERS employer-employee split.”

In addition, she noted that workers retired under FERS in 2007 received an average monthly annuity of $944, or less than $12,000 per year.

“Federal employees seek a safe and healthy retirement, like every American,” she wrote. “It is unfortunate that this goal cannot be realized by some in these tough economic times, but as the employer of the federal workforce, Congress cannot shirk its responsibility to provide a decent retirement system for its workforce.”