If federal employees are forced to contribute more toward their civil service retirement benefits, many might have to cut back on their investments in the Thrift Savings Plan, employee organization officials said Monday.

Were very concerned about what the reactions are going to be if the government requires higher contributions, said Clifford Dailing, secretary-treasurer of the National Rural Letter Carriers Association. Federal employees current needs for money could win out, and I have very grave concerns theyre going to live for today and not save for retirement, he said.

NRLCA and other unions, management associations and employee groups are members of the Employee Thrift Advisory Council, which met Monday with the governing board of the TSP, the 401(k)-style retirement savings program for federal employees and retirees and uniformed services members and retirees.

Several members of the council raised concerns about pending legislation to increase required employee contributions toward annuity benefits in the Federal Employees Retirement System and the Civil Service Retirement System. Last week, a House committee approved a bill to raise those contributions by 5 percent of salary, phased in over five years starting in 2013.

That bill could come to a House floor vote soon but is not expected to advance in the Senate.

A separate plan before the House would increase contributions by 1.5 percent of salary over three years. A law enacted this year already requires a 2.3 percent increase for those hired into the government starting next year who have fewer than five years of prior federal service.

Currently, employees under FERS pay Social Security taxes usually 6.2 percent, but 4.2 percent this year plus 0.8 percent of salary toward their civil service benefit; those under CSRS pay 7 percent of their salary toward a more generous civil service benefit but dont receive a Social Security benefit.

If you increase the amount the employees contribute to their base retirement system, theyre going to reduce the amount they pay into the TSP, said Myke Reid, legislative and political department director for the American Postal Workers Union. I think theres a direct correlation. After you get to 12 percent of salary, theres very little left to invest in the TSP.

Reid noted that the FERS system, which covers about four-fifths of executive branch and postal workers, was designed as a three-part system consisting of a smaller civil service annuity, Social Security and the TSP with employer contributions. FERS employees can receive employer contributions equaling up to 5 percent of salary, but only by investing at least that much themselves.

The TSP does not determine the formula for matching investments and has no role in the level of required contributions toward civil service annuities. However, Jacqueline Simon, public policy director for the American Federation of Government Employees, asked the TSP for data that could help gauge whether employees, especially those at lower salary levels, would react to higher contributions toward FERS and CSRS by cutting back on their TSP savings.

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Thrift Savings Plan: Groups ask about retirement benefits changes