Federal negotiators stuck a deal in mid-February to significantly increase future federal employees’ retirement contributions which will help pay for an extension is unemployment benefits.
According to the American Federation of Government Employees, newly hired and rehired federal employees would have 3.1% of each paycheck put toward their Federal Employees Retirement System pensions. The current contribution rate is only 0.8%, so that amounts to a 2.3% increase.
The increase will affect new hires and rehires beginning in 2013. The increase is expected to raise $15 billion to cover part of the cost of a $30 billion boost to unemployment benefits offered by the federal government.
Unions have criticized the deal, saying that federal employees have already sacrificed $60 billion over a decade because of a two-year pay freeze currently in place. However, some in Congress have said that because the contribution increase will apply to new hires and rehires only, current employees will not feel any further impact in their paychecks.