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Proposals to Reduce the Deficit and Achieve Savings for American Taxpayers Submitted to the President of the United States By Republican Leader John Boehner & Republican Whip Eric Cantor June 4, 2009 REFORM FEDERAL PERSONNEL POLICIES TO REFLECT PRIVATE SECTOR PRACTICES Update The Formula For Federal Pensions To Reflect Private Sector Practices Initial pension benefits for federal civilian employees are calculated based on the average of employee’s highest earnings over three consecutive years. It is common practice in the private sector to base benefits on a five year average. The Congressional Budget Office has estimated that moving to a five year average would save taxpayers $1.2 billion over five years. Eliminate Full-time Union Representatives From Federal Payroll Under current law, Federal employees who are part of a collective bargaining unit may be granted “official time” to perform representational duties on behalf of the union. While on official time, the employee is paid by the government but is acting on behalf of the union. According to the Office of Personnel Management, in FY 2008 the Federal government spent $120 million paying employees for their time spent working on union activities. While some employees only spend minimal time on union activities, others are designated as 100 percent on official time, meaning they are paid to spend all of their time on union activities. In their report, OPM suggests a significant amount of the time spent on general labor-management category (as opposed to dispute resolution or contract negotiations) is spent by those on 100 percent official time. Eliminating 100 percent official time would save taxpayers millions of dollars each year. Savings of just 10% a year would save taxpayers $12 million next year and $60 million over five years. Eliminate Retirement Payments For Federal Workers Who Retire Before Age 62 The Federal government provides civilian employees with a benefit not normally offered to private sector employees, Federal employees who retire at age 55 or older with at least 30 years of service or at age 60 with at least 20 years of service receive until they reach 62 a benefit equal to the estimated Social Security benefit for which the worker will become eligible at age 62. This policy not only encourages Federal employees to retire early, but it comes at a significant cost to taxpayers. Preliminary estimates indicate that the early retirement benefit costs taxpayers $267 million a year.
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