House Bill Threatens Federal Pensions and Due Process
due process federal employment federal retirement mspb appeals pension reform May 01, 2025Late last night, a House committee advanced legislation that could drastically change the financial future of federal employees. The bill—pitched as a $50 billion cost-cutting measure—proposes several sharp departures from long-standing federal employment norms. If enacted, it would raise employee pension contributions, lower pension payouts for those who separate before age 62, and shift the retirement formula from a highest 3-year to a highest 5-year salary average—reducing lifetime benefits for most federal workers.
These proposals aren’t mere hypotheticals anymore. They're now one step closer to reality.
A Subtle Change with Major Impact
Federal pensions under the FERS system are currently based on your highest three years of salary. Switching to a highest 5 years salary calculation dilutes this value, especially for workers whose promotions or locality pay increased late in their career. This change alone could shrink your monthly annuity for the rest of your life. It also hits hardest those who have weathered the demands of public service with the expectation of stability at retirement.
Now is the time to check your eOPF and run retirement scenarios. If you're planning to retire in the next 3–5 years, knowing your numbers is more essential than ever.
Due Process Under Fire
Beyond benefits, the bill includes provisions that could allow certain agencies to terminate employees with significantly fewer procedural protections—potentially removing the right to a hearing or an MSPB appeal. That means no chance to present your side of the story, no evidence review, no impartial decision-maker. In effect, it could erode the due process guarantees federal workers have relied upon for decades.
This is not just a policy shift—it’s a signal. The precedent of altering both the pay-out and the protections mid-service threatens the very notion of federal employment as a stable career path. As one Republican lawmaker stated, it's "un-American" to change the deal midstream. Many labor unions agree, warning this move could gut morale and undermine the long-term health of our civil service.
Take Action Mindfully
Pause. Breathe. Don't panic—but do act. Check your retirement estimates. Revisit your service record. Talk with your HR. And stay informed. These changes might not become law, but their momentum is real.
If you're part of our Power Hub membership, we’ll be tracking this issue closely and sharing strategies to safeguard your retirement and rights.
Legal Disclaimer: The information provided in this article is for informational purposes only and should not be construed as legal advice. While I am a federal employment attorney, this post does not create an attorney-client relationship. Every situation is unique, and legal outcomes depend on specific facts and circumstances.
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