To: Members of the House Committee on Oversight and Government Reform
From: Brandon Arnold, Executive Vice President, National Taxpayers Union
David Timmons, Senior Policy Manager, National Taxpayers Union
Re: NTU’s Views on April 30, 2025 Committee Markup
On behalf of National Taxpayers Union (NTU), the nation’s oldest taxpayer advocacy organization, we write to express our views on several measures slated for consideration before the House Committee on Oversight and Government Reform on April 30, 2025. NTU appreciates the Committee for your focused and ingenious legislative proposals (“Committee Print”) to comply with the reconciliation directive included in section 2001 of the Concurrent Resolution on the Budget for Fiscal Year 2025, H. Con. Res. 14. This Committee Print includes several proposals that revise federal employee benefits to levels more commonly found in the private sector, and would save taxpayers over $54 billion over the next ten years. Therefore, NTU urges Committee members to support all provisions of this Committee Print.
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Sec. 90001 - Raise FERS Employee Contribution Requirements. This proposal would raise the Federal Employee Retirement System (FERS) contribution rate for existing civilian employees up to the 4.4% rate that more recent employees pay. Currently, employees hired prior to 2013 contribute 0.8% of their salary, while their agency pays 18.4%. Those hired in 2013 pay 3.1% of their salary, and those hired since 2013 pay 4.4%, while their agency pays 16.5%. Most private sector employers do not even have defined benefit (DB) pensions anymore, and those who do generally contribute higher levels of their salaries into the fund to pay for their future retirement benefits. The current structure also is unfair to newer employees, effectively creating a cross subsidy from younger employees to older employees to cover their future benefits. This taxpayer saving measure will not negatively impact future retirement earnings, while moving overly generous federal employee benefits closer to levels found in the private sector, saving taxpayers over $30 billion over 10 years. NTU supports Sec. 90001.
Sec. 90002 - Elimination of the FERS Annuity Supplement. This legislative measure would eliminate a program that is rarely seen in the private sector: a supplement to federal retirement pension benefits that is generally provided before the rest of Americans are eligible to receive Social Security benefits. The formula is somewhat complicated, but generally those who work 30 years in federal service are eligible to earn a supplement starting at age 57, while those with only 20 years of service need to wait until they reach age 60, with many variants in between. In all cases, this supplement payment ends when a retiree reaches age 62. If this measure passes, the only federal workers remaining eligible for this benefit would be retirees who worked in federal occupations subject to mandatory early separation, like law enforcement, firefighters, etc. This proposal would save taxpayers over $10 billion over 10 years. NTU supports Sec. 90002.
Sec. 90003 - High-5 Average Pay for Calculating CSRS and FERS Pension. This proposal would move federal retirees participating in both the older Civil Service Retirement System (CSRS) and the FERS from a “high 3” (basing a retiree’s annuity payment on their average highest three benefit earnings years) to a “high 5” system for determining pension benefit levels at retirement. The “high 5” system is a more common feature in private sector defined benefit pension systems, and would help save taxpayers almost $5 billion over 10 years. NTU supports Sec. 90003.
Sec 90004 - Election for At-Will Employment and Lower FERS Contributions for New Federal Civil Service Hires. This ingenious legislative proposal helps shift more federal workers to “at-will” service in the federal government, which is the employment protection level that the vast majority of private sector workers receive. It will allow for more nimble changes in federal labor levels and expertise based on current conditions, and help federal workers build their careers more appropriately by adjusting more fully to labor market needs, by giving new federal employees the option to elect to serve “at-will” in return for higher take home pay. The measure is scored at over $4 billion in savings for taxpayers over 10 years. NTU supports Sec. 90004.
Sec 90005 - Filing Fee for Merit System Protection Board Claims and Appeals. This measure will help limit the number of frivolous employee appeals to the Merit System Protection Board (MSPB) regarding agency adverse disciplinary actions. While the actual number of frivolous cases filed each year is hard to measure in close detail, as the MSPP does not have a specific definition of “frivolous,” in 2023 nearly 3,000 of the 4,100 appeals filed were dismissed, revealing the significant number of cases deemed unsuitable for further consideration. If approved, this reform would require a small fee for MSPB filings that would be refunded to those federal employees who win their appeals, saving taxpayers over $2 million over 10 years. So long as the fee level remains low enough to allow for a typical federal employee to be able to easily afford the cost, NTU supports Sec. 90005.
Sec 90006 - FEHB Audit - Protection of Benefits to Those who Have Earned Them. This provision would require a full audit of dependents of employees currently enrolled in the Federal Employee Health Benefit (FEHB) program to ensure only those who qualify for benefits are currently enrolled. By checking documents like marriage and birth certificates, the government would ensure that only spouses or dependents under the age of 26 are receiving FEHB benefits from the primary enrollee. This measure would save taxpayers $1.5 billion over 10 years. NTU supports Sec. 90006.
NTU appreciates the Committee’s consideration of our views on these important issues and we stand ready to work with you on ways to protect taxpayers by limiting governmental costs. Should you have any questions about the recommendations in this memo, please do not hesitate to reach out to David Timmons at dtimmons@ntu.org or Brandon Arnold at barnold@ntu.org.