Trump Wants 401(k)s for Federal Workers

401k, Trump, retirement, federal workers

Now proposed, but will it pass?

A 401(k)-style defined contribution system for some federal workers is part of “A Budget for a Better America,” the President’s spending proposal for fiscal year 2020 that was released last week.

While details were vague, it nonetheless raised alarm among federal employee unions and advocates.

“With this budget proposal, President Trump is showing once again that his administration has nothing but contempt for the health, education, safety, and security of our nation – and a savage disregard for the federal workforce that keeps our country running,” said David J. Cox, President of the American Federation of Government Employees, the largest federal union representing over 700,000 workers.

The 401(k) proposal was part of a number of changes to the federal retirement system, all of which were previously proposed and rejected by Congressional appropriators. The defined contribution portion, however, is new.

While the changes are meant to slash retirement spending overall, the “defined contribution system for term employees” is one area of increased outlays of $913 million over 10 years, according to Government Executive.

What’s proposed?

“Overall, the changes to federal workers’ non-salary benefits would reduce spending by $102.5 billion over the next decade,” the site notes, and lists the following retirement-centric proposals included by the president:

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