Big Cuts to Federal Retirement Benefits

The President's 2018 budget proposes significant reductions in federal employees retirement programs and calls for employees to pay more for retirement. The proposals, which would take affect October 1, 2017, include:

• Increasing FERS employee contributions by one percent a year for six years until the employee contribution and the government's contribution are equal.
• Calculating future retirement benefits based on high-five year salary, rather than the current high three-year salary.
• Eliminating the cost-of-living adjustments (COLA) for current and future FERS employees and cut the COLA for CSRS employees by 0.5 percent from what the formula would allow.
• Eliminating the supplemental payments for FERS employees who retire in 2018. The supplement is for employees who retire before age 62.

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