March 20, 2009
Michael Victorian
(202) 639-6405

AFGE Lobbying Efforts Result in Legislation to Significantly Improve Federal Retirement

(WASHINGTON) – The American Federation of Government Employees, (AFGE), today praised Representatives Stephen Lynch (D-Mass.), Jim Moran (D-VA), Ed Towns (D-NY) and Delegate Eleanor Holmes Norton (D-DC) for their extraordinary leadership in making significant improvements in federal retirement benefits. The legislation, H.R. 1256, introduced by Rep. Lynch, Chairman of the Subcommittee on Federal Workforce, Postal Service and the District of Columbia, will allow federal employees to automatically enroll in the federal retirement Thrift Savings Plan and correct longstanding disparities in the federal retirement program.

“We applaud the outstanding leadership of Chairman Lynch. The improvements in federal retirement benefits provided in this legislation will go a long way toward honoring federal employees who have made public service a career,” said John Gage, AFGE national president.

H.R. 1256 ensures that employees covered under the Federal Employees Retirement System (FERS) will receive the same credit for their unused sick leave toward retirement as employees in the Civil Service Retirement System (CSRS). The bill also provides for automatic enrollment of new federal employees in the Thrift Savings Plan (TSP), establishes a Roth-style option for employees participating in the TSP, and corrects a longstanding retirement inequity for employees in the D.C. Court Services and Offender Supervision Agency (CSOSA).

Sick Leave Credit toward Retirement for FERS Employees

An idea long advocated by Representative Jim Moran (D-VA), this bill would equalize the treatment of unused sick leave in the Civil Service Retirement System (CSRS) and the Federal Employees Retirement System (FERS). FERS employees would join their CSRS coworkers in having all of their unused sick leave credited to the length of service that is used for calculating their retirement annuity.

The inequity between the two retirement systems has been a serious concern for both workers and managers, in that it gave FERS employees no incentive to conserve sick leave, and no financial recognition for a career with exemplary attendance.

Automatic Enrollment

Currently, new federal employees have to choose to participate in the TSP. If they do so, they receive significant government agency matches to their own contributions. However, many new federal employees find the explanations about the TSP during their orientations to be confusing, and decide not to enroll, inadvertently losing out on the agency matches to their contributions. The change provided by H.R. 1256 would automatically enroll employees in the TSP, but give them the option to decline enrollment. This change from an opt-in approach to the TSP to an opt-out approach will go a long way toward enhancing the economic circumstances of federal employees.

Retirement Credit for Employees Transferred from District of Columbia Serve to Federal Service

Currently, employees serving in CSOSA do not receive credit for their time in service to the agency prior to it being taken in to receivership by the federal government. Long time employees in the agency, who have diligently served the Washington, DC community, have lost decades of work credited toward retirement. This legislation will credit these employees for their service prior to the agency being under the direction of the federal government.

Roth Plan in TSP

AFGE also supports the addition of a Roth-style option in the TSP for employees. Although a Roth-style plan is not in the economic interests of all federal employees, it is an additional option which will benefit those who expect to have higher income taxes in their retirement years than when they were working.

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