Trump proposes pay freeze and retirement cuts for federal workforce

By on 18/03/2019
No civil service pay rise next year according to documents (Image courtesy: Gage Skidmore/Flickr).

President Trump has renewed his attempt to impose a pay freeze for US civil servants in his 2020 budget proposals, and added new proposals to cut retirement benefits and reduce leave.

According to Government Executive, detailed documents released today show employee leave entitlement is also under attack by the president.

The documents reveal a plan for annual and sick leave to be pooled reducing the total number of days workers could take off during the year.

His plans for the 2020 budget, unveiled last Monday, made no mention of a civil service pay rise next year, with the president instead reiterating his intention to roll out performance related pay.

“The administration is exploring broad alternatives that better target pay increases and incentives toward recruitment and retention of top performing employees that have critical skill sets,” a senior administration official told Government Executive.

Renewed assault

Trump’s plans for a pay freeze in the 2019 budget eventually fell after Republican and Democrat legislators found common ground on the topic. Federal employees were awarded a 1.9% pay rise in the deal brokered to end the longest ever partial government shutdown.

But the White House has returned to the fray, adding a raft of changes to federal workers’ non-salary benefits. Employees would be required to pay more towards their pensions, and in future those who retired from work early would lose some retirement benefits. Government Executive has noted that under the new plans, workers hired on temporary contracts would no longer be eligible for a federal pension at all.

A range of further cost-cutting measures to existing pension plans were also put forward, such as cancelling cost-of-living increases in one scheme and reducing the annual cost-of-living adjustments in another. Many would see a reduction to their pension pots under plans to base annuity calculations on the average of their highest five years of salary, rather than the highest three years.

Hostile reaction

If all the changes were to go through, the government would save $102.5bn over the next decade. However, with the House now under Democrat control, Trump will face stiff opposition; and federal worker’s unions have been lining up to condemn the plans. 

“For anyone still looking for proof that this administration is hostile to its frontline federal workforce, look no further than the FY 2020 budget proposal,” said the National Treasury Employees’ Union (NTEU) President, Tony Reardon. 

“It would deprive federal employees of the resources they need to do their jobs, slash their retirement benefits, reduce their take-home pay and generally make 

their lives – and the lives of the taxpayers they serve – more difficult,” he added.

The American Federation of Government Employees (AFGE) called the proposed budget “a kick in the teeth” to workers.

About Natalie Leal

Natalie is a freelance journalist whose work has been published by The Sun Online, The Guardian, Novara Media, Positive News, and Welfare Weekly, among others. She also writes reports and case studies on global business trends for behavioural insights agency, Canvas8. Prior to working as a journalist Natalie worked for the public sector in social services for several years. She switched careers in 2013 after winning a fully funded NCTJ in a national writing competition. She holds a Masters degree in social anthropology from Sussex University where she specialised in processes of social change and international conflict and reconciliation processes.

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