Changes for New FED EE’s starting after 12/31/12

Congress on Feb. 17 passed a bill to extend the payroll tax cut that includes a measure requiring new federal employees to pay more into their pensions. President Obama is expected to sign the bill.

The bill, which passed 293-132 in the House, and 60-36 in the Senate, will continue the tax cut and provide funding for unemployment insurance through the end of the year, as well as prevent cuts to Medicare reimbursements paid to physicians.

Under the legislation, new federal employees who are hired after Dec. 31, 2012—and who have less than five years of creditable service at hiring—must contribute 3.1 percent of salary to their pensions—2.3 percent more than the 0.8 percent that current feds contribute to the defined benefit component of the Federal Employees Retirement System. Existing federal employees will not be affected by the new requirement.

Before the vote, Democratic Whip Steny H. Hoyer (D-Md.)—whose district is home to thousands of federal employees—expressed his frustration with the bill in a statement on the House floor.

“Nobody else in this bill, not a millionaire, not a billionaire, not a carried interest beneficiary, not an oil company, nobody in this bill other than federal employees is asked to pay,” Hoyer said in his comments.

“They’ve already paid $60 billion, and by the way, your side of the aisle is not going to give them that half percent the president asked for, so that will be an additional $30 billion,” Hoyer told Republicans.

Colleen Kelley, president of the National Treasury Employees Union, also blasted supporters of the bill for singling out federal workers.

“It is difficult to fathom the rationale for making one group of workers pay benefits to other middle-class families when the wealthy, along with the corporations that helped significantly to create joblessness, are not being asked to share in the cost,” Kelley said in a statement.

Another capital-area lawmaker, Rep. Gerry Connolly (D-Va.), in announcing he would vote against the bill, blamed supporters of the legislation for making it tougher for the government to attract high-quality job candidates.

“They want to create an environment where nobody will be interested in federal service because the pay and benefits are so far below those in the private sector,” Connolly said.

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