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House Republicans Propose Significant Cuts to Federal Workers’ Retirement Benefits
Last week, House Republicans put forth a proposal aimed at implementing further reductions to the retirement benefits of federal employees. This plan includes the introduction of a pension surcharge that would apply unless new hires choose to work in an at-will capacity.
The House Oversight and Reform Committee is scheduled to convene on Wednesday to review its segment of the GOP’s budget reconciliation strategy, which seeks to prolong and broaden tax cuts initially introduced during President Trump’s first administration.
At the forefront of the proposed benefit reductions is a gradual increase in employee contributions to the Federal Employees Retirement System (FERS) over the next four years. When the contribution rises were first established over a decade ago, they applied only to federal workers hired after December 2013, with those hired during 2013 contributing 3.1% of their salaries toward their FERS annuity. The planned changes would now extend to all employees.
Alongside the hikes for current federal workers, new hires would face distinctive alterations. The proposal suggests an increase in their FERS contribution rate to 9.4% of their basic salary—up by five percentage points—unless they opt for an at-will position, thereby forfeiting certain civil service protections.
Committee estimates indicate that these modifications could lead to a reduction of approximately $35.2 billion in federal expenditures. This occurs as President Trump is anticipated to announce a pay freeze for federal employees in 2026, potentially resulting in an effective pay cut for agency workers next year. These adjustments to the cost associated with federal workers’ pensions are occurring simultaneously with efforts to diminish the overall pension benefit value.
Additionally, the committee has proposed eliminating the FERS supplement for federal employees retiring before the age of 62, with exceptions for law enforcement and certain occupations requiring early retirement, such as air traffic controllers. Another significant change involves recalibrating the calculation for retirees’ annuity payments, shifting from averaging their highest three years of salary to using the top five years instead.
Moreover, the proposal includes directing the Office of Personnel Management to undertake a “comprehensive audit” of the Federal Employee Health Benefits Program, aiming to identify dependents who may no longer be eligible for coverage.
Chairman James Comer, R-Ky., defended the committee’s actions, asserting that they advance President Trump’s America First agenda and ensure that taxpayer dollars are utilized effectively. Comer emphasized that the legislation aims to produce a meaningful victory for fiscal accountability and to contribute to a reduction of the federal deficit exceeding $50 billion.
Conversely, Ranking Member Gerry Connolly criticized the reconciliation proposal just days before his intention to step down due to health concerns. He characterized it as a “billionaire giveaway,” condemning Republicans for targeting essential federal programs and the dedicated civil servants who keep government operations running smoothly.
“House Republicans are perpetuating the Trump-Musk administration’s harmful and arbitrary actions against vital federal programs that serve the public,” Connolly stated. “This is an assault on the workers responsible for delivering Social Security payments promptly, ensuring veterans receive necessary benefits, protecting national security, and supporting families in need—all to provide tax breaks for the wealthy and impose their radical, cost-increasing agenda on the American populace.”
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