The budget that Congress signed into effect in the last moments of 2013 legislative session substantially changes how new federal employees will fund their pensions, according to

The 2013 Bipartisan Budget Act increased pension contributions for federal employees hired after Jan 1, 2014 to 4.4 percent of their salaries, meaning the Federal Employment Retirement System now has three tiers of contribution rates. Employees hired after 2012 pay in 3.1 percent, and all other employees contribute a paltry 0.8 percent.

If that seems unfair, new employees may now have to go into debt to their pension programs because of bureaucratic inefficiency. The Obama Administration previously announced it would delay the higher deductions until the software updates throughout federal agencies can account for the new three-tier pension system, the news site said.

Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.

  • Critical BenefitsPRO information including cutting edge post-reform success strategies, access to educational webcasts and videos, resources from industry leaders, and informative Newsletters.
  • Exclusive discounts on ALM, BenefitsPRO magazine and events
  • Access to other award-winning ALM websites including and

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.