Legislative Committee

Legislative Committee

LEGISLATIVE COMMITTEE REPORT
SDASCOE FALL BOARD MEETING
BROOKINGS, SD October 13-14, 2011

sdascoe@yahoo.com

SDASCOE

There are a lot of unknowns at this point.   President Obama has proposed increasing the
retirement contribution required of all federal employees by 1.2 percent of salary, phased in over
three years starting with a 0.4 percentage point increase in 2013. The proposal is part of a large
package of spending cuts and tax increases the White House put on the table for the
congressional deficit-cutting "super committee." Various formulas for increasing contributions
have been considered for more than a year, and proposals for an even larger increase still could
be put forward.

Several other aspects of the administration's proposal would affect federal employees: the Social
Security payroll tax for all workers who pay into that system such as those under FERS and
under CSRS Offset, typically 6.2 percent but 4.2 percent this year, would be further cut to 3.1
percent for 2012; the special retirement supplement, which goes to some FERS employees who
retire before age 62, would be eliminated for those hired after a future, unspecified date; and a
civil service reform commission consisting of members of Congress, employee organizations and
other experts would be formed to find ways to modernize pay, "staff development and mobility,
and personnel performance and motivation." OPM would be allowed to contract directly with
providers of prescription drugs in the FEHB program in an attempt to command better prices and
eliminate middlemen known as pharmacy benefit managers.

The administration's plan also is notable for not including a number of policy proposals that have
been in circulation. It would not change the formula for retirement benefits (such as by changing
the base from the average of the highest three straight years of salary to the highest five or
changing the multiplier used); it would not change the COLA benefit (such as by switching to a
less generous inflation index); it would not change the cost-sharing formula for FEHB premiums;
Similarly, it would not set higher retirement contributions for newly hired employees than for
current employees, nor would it require higher retirement contributions from FERS employees
than from CSRS employees. However, each of those ideas has supporters and there will be
numerous opportunities for advancing those ideas in the months ahead.

The amount the government contributes to the pension plans of federal employees is increasing
slightly this month.   For most federal employees, the amount agencies contribute to their
pensions under the Federal Employees Retirement System rose from 11.7 percent to 11.9
percent at the start of fiscal 2012. Individual contribution rates -- 0.8 percent of their wages for
most of the federal workforce remained the same. The total cost of FERS pensions, adding
individual and agency contributions, for most federal employees will be 12.7 percent in fiscal
2012. The changes took effect at the beginning of the first pay period on or after Oct. 1.
Individual contributions to FERS are fixed in law. The law requires the rate of the government
contributions to be equal to the cost of the FERS pension as estimated by the Office of
Personnel Management minus the individual contribution.

Now is the time to take action, if we wish to keep the jobs and benefits that we currently enjoy we
must become active participants in the legislative process NOW. There are several ways to
become involved and many of them can be done from the comfort of your home.

Sign up for CAPWIZ. CAPWIZ is an effective tool that is currently being underutilized. CAPWIZ is
a way for you to individually contact your representative and bring important issues to the
forefront. Talk to Doug Hofer about signing up for CAPWIZ , or you can go to the NASCOE
website at nascoe.org   Click on Legislative on the left side, scroll down and click on sign up for
CAPWIZ. Make sure you do this from your HOME computer only.

Enroll in the PAC, you can also find out more about that on the Legislative page of NASCOE’s
website, or visit with any SDASCOE board member.

Contact your SDASCOE directors with questions, ideas or suggestions.

With all of the unknowns out there, we need everyone to be vigilant and take action when called
upon. One voice doesn’t make a lot of noise, but a unified voice can be heard from miles
away…..

Respectfully submitted
Bill Chase and EJ Goetz, Co-Legislative Chairs