YouCut Targets Federal Pensions

Republican lawmakers are targeting federal employee pensions this week as part of House Minority Whip Eric Cantor's YouCut program, an online contest designed to highlight government projects that Republican lawmakers think are wasteful.

The contest, which allows participants to vote each week either online or via text message on five possible spending cuts, this week is proposing to update federal employee pensions to reflect private sector practices, a move House Republicans say would save taxpayers more than $4.5 billion over 10 years.

While federal employee pensions are calculated based on the average of an employee's highest earnings over three years, the private sector commonly bases benefits on a five-year average. The government also offers 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 to receive an early benefit equivalent to Social Security until they reach age 62. The Republican's proposal would eliminate the early retirement benefit for those who voluntarily retire early and would base pensions on an employee's earnings over five years, according to the website.

In May, the YouCut contest proposed eliminating the proposed 2011 federal employee raise, which lawmakers estimated would save approximately $2 billion in the first year and $30 billion over 10 years.

But would trimming federal retirement benefits be a good idea, particularly as the government will need to compete with the private sector for top skills, including tech talent, as more seasoned workers retire?