The US president Donald Trump thanked the federal employees with a pay cut in their retirement plans. Last Sunday, a letter was sent from Trump administration to Congress about the possible cut in the retirement plans of federal employees. On Friday, Jeff T.H. Pon the Personnel Management Director sent a letter to the House of Speaker Paul Ryan in which it was stated that over the period of 10 years, this proposal will cut down the benefits of almost $2.6 million federal employees.
While commenting on his proposal, Pon said the pay cut will be applicable to only those federal employees who retire before being eligible for SSB (Social Security Benefit). He further said that the cutting down of pension will be based on average 5-year service instead of 3 years. With this plan, Federal employees will contribute 0.8% more from their pensions, said Pon.
Pon further said that the rate of deduction from Federal employees will increase by 1% each year until it reaches 7.25%. It was also reported that other than retirement cuts, Trump administration is also planning to freeze federal pays from next year. The same happened to the FEDS in the reign of Obama when they faced a freeze on their basic pays for three years. In response to Pon’s proposal, president of the American Federation of Government Employees, J. David Cox Sr. said that the retirement cuts and freeze on payments would give a benefit of $246 billion to the Trump administration.
Cox highly criticized Trump over this retirement cuts as he said that the president had no limits to his war on federal employees. He further said that wealthiest are getting a break in their taxes while the working employees who are actually running the government are facing yet another cut and this time in their retirement.
When the signed letter was received by Ryan, he did not give his opinion on it but the ranking Democrat Elijah E. Cummings was very upset on this proposal as he labeled this proposal as a draconian act of Trump administration. Cummings further said that this proposal would be a betrayal to the families of middle-class federal employees who give their whole lives for the government and in response, the government is cutting their retirement funds.
Pon signed the proposal and his signature made this proposal more controversial. Pon had a conference talk with the reporters last week, and in that meeting, Pon asked to have the data of the federal employee from the federal union. And then Pon signed on the cutting proposal without any agreement over data required of Federal employees.
In April, a Federal Salary Report was published, in which it was stated that federal employees pay lags behind private sector by 32%. And according to a congressional budget report, federal employees were paid 3% more than other employees but the ratio of the payment was differing according to the qualification. Those federal employees having a degree no more than high school was paid one third more than their private-sector counterparts. While those with a professional degree were paid one quarter less than their counterparts.
Other than that, Pon also suggested a complete change in civil service system and according to him, the system must have compensation in it. While speaking to the media, Pon said that he would try his best to bring the wholesale changes in the civil service system before the midterm elections and he also criticized the previous proposals made over this matter.
However, Pon faced a lot of criticism from his counterparts as one of them said that why did Pon agree to cut the pensions if he already had an overhaul plan ready? During a telephonic interview, Pon only answered those question which was already planned and didn’t answer any other question as he was supposed to answer only prepared questions.
While speaking on this matter, the president of National Active and Retired Federal Employees Association, Richard G. Thissen said that the federal employees work for their whole lives and in return, the government pays them a decent amount as a pension on their retirement. And that pension is not a gift but the right of an employee.