• Main change: The bill would raise FERS (Federal Employees Retirement System) employee contribution requirements up to 4.4% of an employee’s salary, for all employees.
The FERS contribution rate is currently a tiered system based on the employee’s hire date. Employees hired on or after January 1, 2014, contribute 4.4% of their salary. Employees hired in 2013 contribute 3.1% of their salary and employees hired in 2012 or earlier contribute 0.8% of their salary.
• Benefit calculation: The current retirement benefit system is based on a federal worker’s highest three years of pay. The bill would change that to a federal employee’s highest five years of pay, with that provision starting in full on Jan. 1, 2027.
• Early retirement: The FERS annuity supplement, which provides additional benefits to employees who retire for up to five years before age 62, will be eliminated under the new bill. Without the supplement, federal employees who retire before age 62 will face a reduction in their retirement income until they qualify for Social Security benefits.
• How many Ohio workers will this affect? About 83,500 workers in Ohio were employed by the federal government at the end of 2024, or about 1.5% of the state’s nonfarm payroll.
About one in 20 workers in the Dayton region were employed by the federal government at the end of 2024 (5% of the total workforce).
• Projected cost savings: The plan would save over $51 billion over 10 years.
• Where the bill stands: The Oversight Committee passed the measure Wednesday. It now goes to the House Budget committee for possible inclusion in a final reconciliation package.
• Local opposition: U.S. Rep. Mike Turner, R-Dayton, voted against the legislation, saying, “I oppose any and all efforts to reduce federal spending by taking money from the hard-earned pensions of federal workers,” the Dayton Republican added. “These pensions are not giveaways — they are promises to federal workers in exchange for their dedicated service."
