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if you're a federal employee no doubt
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you're aware of the proposals put forth
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in the House of Representatives recently
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that would cut your federal retirement
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benefits but what you may not be aware
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of is the latest news on this there's
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some breaking news that just came out
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with respect to legislation that was
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advanced by the House Budget Committee
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on Sunday night let's take a look at the
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details hello everyone i'm Ian Smith
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with fedsmith.com thank you very much
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for joining me today i'll go ahead and
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get right into this because I know this
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is an important topic for a lot of you
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and I think this news that came out of
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the House Budget Committee with the
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latest advancement of this legislation
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will probably be good news for for most
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of you the House Budget Committee
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approved legislation on Sunday night
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they held a special session at 10 p.m
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last night i'm recording this on Monday
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May 19th so this would have been Sunday
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May 18th and they were considering the
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legislation that had previously failed
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to pass on Friday it was rejected and
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the legislation is now known as the One
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Big Beautiful Bill Act congressman Jody
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Arrington is a Republican from Texas
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he's the House Budget Committee chairman
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and he issued this statement about
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advancing this legislation quote
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"Tonight the House Budget Committee took
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a critical step to passing the One Big
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Beautiful Bill Act and making President
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Trump's America First Vision a reality
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for the American people i look forward
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to finishing the work on this bill and
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passing this historic legislation
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through the House i encourage my Senate
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colleagues not to delay and quickly take
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up our bill so we can expedite it to the
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president's desk and make America safe
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and prosperous again." You're probably
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familiar with the legislated proposals
1:47
put forth by the House Oversight
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Committee recently that would
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effectively cut federal employees
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retirement benefits i've done a couple
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of videos on those at least written a
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number of articles on
1:59
fedsmith.com and by the way I'll include
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links to some of those in the
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below but they're contained in this
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larger bill however what advanced out of
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the House Budget Committee has changed
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some of these proposals in important
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ways and that's what I'm going to cover
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in this video the first one is the
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proposal to increase retirement
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contributions to FURs that's the federal
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employees retirement system now this
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proposal would have raised the amount
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that some federal employees as well as
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congressional staffers and members of
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Congress would have had to contribute to
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FURs basically regardless of what anyone
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was currently contributing it would have
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4.4% which is the current standard
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amount however going back in years past
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there were lower amounts i won't get
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into all the specifics but please check
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out my other articles and videos on this
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if you'd like more details the important
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point on this one though is that it has
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been eliminated from the latest draft of
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this legislation or the latest version i
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reported last week that there was
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opposition among some Republicans to
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this specific proposal the congressman
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who was primarily leading the charge on
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this or at least was being most
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outspoken about it was Congressman Mike
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Turner a Republican from Ohio he had
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predicted in fact that it would be
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stripped from the bill because he said
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that he had talked to enough of his
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colleagues in the House who were against
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it that he didn't think it was going to
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survive that turned out to be a
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perspeacious prediction because it has
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in fact been stripped from the bill the
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next item up is the elimination of the
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supplement this particular item now
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appears to be grandfathered in for
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current recipients of the annuity
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supplement it would not apply to
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individuals who were already entitled to
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an annuity supplement under title 5
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section 8421 of the US law code before
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the date of enactment of this
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legislation again assuming it were to
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become law as currently written also
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this particular provision would not take
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effect until January 1st 2028 the next
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item that saw a revision was the change
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from the high three to the high five the
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one key change with this provision in
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the latest version of the legislation is
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that it would now go into effect one
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year later again as currently written it
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previously would have taken effect
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January 1st 2027 now it would be January
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1st 2028 one interesting point about
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this proposed change is that the
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Congressional Budget Office recently
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estimated that moving from the high
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three to the high five would result in
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an approximate 3% reduction to a federal
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employees annuity payment it issued its
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report last week and I just wrote an
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article about it which I'll include a
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link to in the description below
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basically the CBO report was an analysis
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of this group of legislative proposals
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from the House Oversight Committee now
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the other proposals are generally
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unchanged those are the option for atill
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employment for new hires the $350 MSPB
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filing fee and the FEB integrity audits
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i won't get into any details in this
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video on those three items but for
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anyone who'd like more information there
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are links in the description to other
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articles and videos this is a complex
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topic the legislative process is not
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designed to be simple to understand nor
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is it easy to understand for the people
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who are impacted by legislative changes
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put forth by Congress i know a lot of
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you have questions about these
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legislative proposals and how they would
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impact you and your situation
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specifically i've also been asked when
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are these changes going to become law or
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are they going to become law
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unfortunately I cannot answer those
5:51
questions directly what I can do though
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is keep you informed about the process
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and the changes that take place along
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the way with these articles and videos i
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hope you're finding them helpful i hope
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they are helpful to you and I hope they
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will be helpful as you weigh the the
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possible changes and any decisions you
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might make about your federal careers as
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a result it's important to consider any
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decisions you do make carefully with
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your family financial adviserss benefits
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adviserss or any other key stakeholders
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i've said all along that it's very
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likely that these legislative proposals
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are going to change or be eliminated
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entirely as they go through the
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legislative process and we've certainly
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seen that happen here as I mentioned the
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increased contributions to FURs were
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dropped entirely from this legislative
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proposal and it's quite likely that
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additional changes will take place as
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the legislation continues to work its
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way through Congress there's still a
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long way to go it's got to go before the
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full house it also has to be considered
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by the Senate and it still has to be
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signed into law by the president there
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are a lot of stakeholders involved who
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are going to want to add or remove
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things to the bill so we just don't know
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at this point what the ultimate outcome
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will be but as I said I will continue to
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keep you informed be sure to check the
7:09
fedsmith.com website for new articles we
7:11
post we have a free email list there
7:13
that you can sign up for to get
7:16
notification of new articles in your
7:18
inbox and certainly be sure to like and
7:20
subscribe to our YouTube channel for
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updates here have a good day
