Association of Letter Carriers Legislative Fact Sheet on Contributions to CSRS/FERS
Background It has been estimated that
Federal employees, Federal Retirees and their families have contributed more than $200
billion towards deficit reduction since 1980 through cuts in pay, health care benefits and
retirement benefits. Federal employees have been on the front-line of efforts to reduce
the budget deficit.
The 1997 Budget Reconciliation bill, as
part of the deficit reduction effort, enacted a temporary increase in Federal employees'
contribution to the Civil Service Retirement System and the Federal Employee Retirement
System. The result is phased-in, temporary increases in employee retirement payments of .5
percent through December 31, 2002.
As of January 1, 1999, half of the .5
percent increase has already taken effect. An additional .15% increase is scheduled to
take effect on January 1, 2000, followed by another .10% increase in 2001. The sole
purpose for the increased contribution to the retirement system was to achieve deficit
reduction. Federal employees received no additional benefits from their increased
HR 2631 and S 1472
A bipartisan, bicameral group of
legislators has acknowledged the sacrifice made by Federal employees by introducing
measures that would do away with the increased contribution to the retirement system. The
result is HR 2631, introduced by Rep. Tom Davis (R-VA) and S 1472, drafted by Senator Paul
In light of the projected budget surplus,
and with Congress considering hundreds of billions of dollars in tax cuts, it is clear
that this tax increase on Federal employees is no longer necessary. Federal employees
should not be forced to continue to contribute more than their fair share at a time when
others are having their taxes reduced.
The NALC strongly supports passage of HR
263 1 and S 1472 and encourages letter carriers to contact their representatives to
express their support.
If you would like more information,
please contact the NALC legislative department at (202)393-4695