Obama Seeks to Raise Employee Contribution Rate For Federal Worker Retirement Plans

Under the plan, the employee contribution would increase by 1.2 percentage points over three years beginning in 2013, generating $21 billion in savings over 10 years. This totals half of the $42.5 billion in savings Obama is seeking by making changes to benefit programs for civilian employees and military personnel, the Post said.

The American Federation of Government Employees (AFGE) is calling the plan unfair.  “Asking federal employees to accept additional cuts to their take-home pay is unfair, especially at a time when citizens are demanding more services from their government,” said AFGE President John Gage, according to the news report. “This is a double whammy for federal employees, who are facing the same economic hardships as most other Americans. Enough is enough.”

Federal employees already are under a two-year pay freeze, which was imposed in January.

Obama also called for capping payments to individual contractors at the annual pay level of the senior-most federal civil servants, which is now $200,000.