Federal Pension Reform

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The Washington Post reports that both Republicans and Democrats are looking to require federal employees to pick up a larger share of their pension contributions. The article notes that federal employees enjoy benefits that aren’t available to most private sector workers:

It’s the same argument public workers have confronted for months from critics who compare their job security and salaries with millions of private-sector workers who have lost jobs or faced pay cuts.

Today, half of private companies offer any kind of retirement plan at all. And the majority of those offer employees 401(k)-style plans, which have taken big hits in the stock market in recent years. Less than 1 in 5 workers at private companies have traditional pensions, down from half in the early 1980s, according to the Employee Benefit Research Institute.

A Cato essay on overpaid federal workers shows that the federal pay advantage over private workers has been increasing steadily over the past decade. Therefore, it’s good news that policymakers are interested in reforms that would shift more of the burden toward privileged federal workers and away from taxpayers.