Welcome to the latest edition of This Week in Pensions! We have gathered the best stories about pensions and retirement security from the previous week. You need to know this news in the fight for a secure retirement.
Federal Workers’ Retirement Options Feeling the DOGE Effect
House Republicans have advanced a provision in former President Trump’s proposed “Big, Beautiful Bill” that eliminates the special retirement supplement within the Federal Employees Retirement System (FERS). FERS employs a three-legged stool approach, providing employees with a pension, a Thrift Savings Plan, and Social Security benefits, in addition to an early retirement supplement. This supplement currently serves as a bridge for federal employees who retire between the ages of 57 and 62, when they’re not yet eligible for Social Security. The change would affect those younger than 57 as of January 1, 2028, potentially costing many workers tens of thousands of dollars in benefits previously promised.
Michele Santa Maria, a 35‑year veteran of the Social Security Administration, retired early at age 53 amid fears of job cuts under the current administration. She’s now looking at a potential loss of almost $110,000 in supplemental retirement benefits she expected to receive. “I was in shock,” she noted. “I thought to myself, ‘There’s no way they’re going to do this to us.’”
Advocates and critics of the change are sharply divided. The National Active and Retired Federal Employees Association (NARFE) warns that clawing back this benefit from retirees is “a real red line,” arguing it’s unfair to rescind benefits earned through decades of service. Pension opponents at the Heritage Foundation defend the move, calling the supplement “a pure windfall benefit” that allows federal retirees access to Social Security earlier than other Americans.
Private Sector Pensions Are Making a Comeback
Recent data from Mercer shows that about half of the country’s private sector Chief Financial Officers (CFOs) are now considering initiating or reinstating defined‑benefit pension plans for employees. This resurgence comes amid growing concerns about long-term retiree obligations, funding volatility, and the need to retain top talent. Many finance leaders are adopting “dynamic de‑risking” strategies—adjusting asset allocations based on market conditions—to maintain financial sustainability while offering more secure retirement income.
CFOs are taking a proactive role in pension risk management, no longer acting as passive overseers of pension plans; instead, 70% now report being deeply involved in risk management decisions. They’re closely monitoring liabilities, hedging interest‑rate exposure, and shifting toward lower‑risk investments as their workforce ages. The goal is to balance plan affordability with competitive benefits, without exposing the company to sudden financial strain.
While DB plans were initially rejected for being too expensive and complex, many CFOs view them as valuable tools for attracting and retaining employees, especially when 401(k)-only solutions feel insufficient. As one CFO put it, reinstating a pension represents “a signal to the market and our people that we’re committed to long‑term financial stewardship.” This attitude reflects a broader strategy: DB plans may be back, but only under carefully managed terms and risk-aware frameworks.
Be sure to check back next Friday for the latest news in the fight for a secure retirement! For now, sign up for NPPC News Clips to receive daily pension news from across the country directly to your inbox.