Senate Committee preserves Federal Retirement supplement

The Senate Homeland Security and Governmental Affairs Committee has released its version of a key spending bill that would preserve the Federal Employees Retirement System (FERS) special retirement supplement. This supplement, which provides support for FERS employees who retire before age 62 until they can begin drawing Social Security, was targeted for repeal in the House-passed budget reconciliation bill. The Senate committee’s version does not mention the retirement supplement, effectively disapproving the House’s plan to eliminate it for those retiring in January 2028 or later, with exceptions for specific special retirement provisions. According to the Congressional Budget Office, the supplement is valued at an average of $18,000 a year for retirees receiving it. However, the Senate version accepts or modifies several other House-passed provisions and introduces new ones. One new provision would require new hires, post-enactment, to choose between paying an additional 5 percentage points of their salary toward their civil service retirement benefits or accepting “at-will” employment status, giving up rights such as challenging disciplinary actions via the Merit Systems Protection Board (MSPB).

Senate committee preserves FERS supplement

The House version maintains the standard FERS contribution at 4.4 percent of salary for those who accept the at-will status, while the Senate version proposes even higher contributions: an extra 5 percentage points for those who accept at-will status and an extra 10 percentage points for those who refuse it. The Congressional Budget Office estimates that three-quarters of new employees would prefer to accept the at-will status to avoid the significantly higher contributions. Federal employee organizations warn that this shift could erode civil service protections, although certain protections, such as those against discrimination under civil rights law, would likely remain intact. The Senate version also retains House provisions to impose a $350 fee for filing an appeal with the MSPB, refundable to employees who win their appeals, and to conduct a full audit of the Federal Employees Health Benefits (FEHB) enrollments to identify and remove ineligible individuals covered as family members. Republican leaders in the Senate aim to bring the bill to a floor vote by July 4. If it passes, the differences between the House and Senate versions would need to be reconciled before final passage.