Federal retirement issues flourish

Joe Davidson
Columnist August 6, 2013

August in Washington often is hot and cold.

The weather can be stifling, while government action cools.

Joe Davidson writes the Federal Diary, a column about the federal workplace that celebrated its 80th birthday in November 2012. View Archive

But this year, the first week of August has been mild, while action on at least one government front — federal retirement issues — has been heating up.

Starting during the last days of July, there has been one development after another concerning the retirement of federal employees. Here’s a summary of issues that could affect your life after work.

●The Office of Personnel Management had been making good progress on a long-standing problem, the backlog of retirement applications. That’s until budget cuts known as sequestration came along. Postal Service early retirement and buyout programs also unexpectedly added more than 20,000 cases to the workload.

The OPM’s goal to get 90 percent of retirees their first full annuity payment within 60 days of retirement is being pushed way back. The OPM had hoped to reach that goal last month. Now it says a year later would be more realistic.

“Based on available resources and what we know now,” says an OPM “Progress Report” issued Monday, the agency doesn’t expect to make the goal until “summer 2014.”

The sequester derailed what had been significant headway against the backlog. Over the past 18 months, 205,000 retirement applications were processed, “so that today fewer applications are awaiting processing than at any time in nearly four years,” the Progress Report said.

The result: The OPM says it was “on track to eliminate the pending case backlog.”

Then the budget cuts hit.

Sequester “meant that OPM stopped all overtime work on retirement processing in April of 2013, reducing our processing capacity,” according to the report. “Reduced funding also caused a reduction in call center hours,” which hurt customer service.

●It’s not unusual for veterans to join the civilian ranks of the government after retiring from the military. In fact, government agencies actively recruit them, and the law provides hiring preferences for vets.

But because of budget cuts, Defense Department officials are contemplating a change in the game — retired military personnel would not be eligible for civilian retirement benefits.

Defense Secretary Chuck Hagel told a July 31 news briefing that a management review “identified more sweeping changes to meet sequester-level targets, such as eliminating civilian pensions for retired military personnel serving in civilian government service, ending subsidies for military commissaries and restricting the availability of unemployment benefits.”

“This package would yield savings of almost $100 billion over the next decade, but would have a significant impact on our service members and our workforce,” he said.

It’s easy to predict the impact — it would discourage veterans from continuing their service to the nation through federal civilian employment. But it’s not a done deal.

“Eliminating or reducing government contributions to civilian pensions for retired military personnel entering federal service is only one of a variety of measures being considered,” said Jennifer D. Elzea, a Pentagon spokeswoman.

Defense is the largest federal agency, so what it does can influence other parts of the government. But can one agency carve out a retirement policy on its own?

If Hagel pursues this idea, Elzea said, it “would need to be reviewed by OPM to determine how it would be implemented in a lawful and fair manner.”

●Postal reform legislation introduced last week by Sens. Thomas R. Carper (D-Del.) and Tom Coburn (Okla.), the chairman and ranking Republican, respectively, of the Homeland Security and Governmental Affairs Committee, would “allow the Postal Service and postal unions to bargain over the extent of new postal employees’ participation in FERS (Federal Employees Retirement System) and the Thrift Savings Program (TSP),” according to a staff summary.

This could lead to substantial changes in employee benefits, particularly for newly hired workers, but also potentially for current employees and retirees. The measure would allow bargaining over a separate health insurance program specifically for postal retirees.

The USPS and its unions would be allowed to bargain over retirement benefits for employees hired after an undesignated future date. A revised system might repeal for those employees the defined benefit portion of federal retirement benefits, which pays a lifetime annuity based on salary and years of service.

In its place could be a larger employer contribution than the USPS and other agencies now make for employees in the TSP, according to a committee aide who briefed reporters on background.

The staffer said the legislative goal is to give the USPS and its unions more flexibility to negotiate, with no requirement for any particular outcome.

●On Friday, the OPM announced that federal retirees in gay marriages will have two years “to inform OPM that they have legal same-sex marriages . . . and to elect survivor annuities for their spouses.”

The announcement follows the Supreme Court’s June decision overturning the Defense of Marriage Act’s (DOMA) definition of marriage as only between a man and a woman for federal purposes.

Warning: “An annuitant should be aware,” the announcement noted, that providing retirement income for a surviving spouse means a reduction in retirement income for the former employee.

Twitter: @JoeDavidsonWP

Eric Yoder contributed to this column. Previous columns by Joe Davidson are available at wapo.st/JoeDavidson.

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