Military retirees will see a decrease in their pension plans if the bipartisan budget agreement is adopted, while civilian federal employees will be exempt.
Under the budget agreement crafted by House Budget Committee Chairman Paul Ryan (R., Wisc.) and Senate Budget Committee Chairman Patty Murray (D., Wash.), military retirees younger than 62 will receive 1 percentage point less in their annual cost-of-living adjustment.
New federal employees who are hired after Jan. 1, 2014 will also be required to pay 1.3 percent of their pay more into their pension plans. However, federal retirees will continue to receive their generous pension benefits and current employees will not be required to pay more.
Civilian government workers will be grandfathered in at their current contribution rate of 0.8 percent.
Ryan contends lowering the cost-of-living adjustment (COLA) for military retirees under 62 will decrease the deficit by $7 billion over 10 years.