Bill Seeks to End Salary Penalty for Rehired Retirees

Bring back federal retirees for short-term projects. Bring them back as mentors.

That was the message delivered by the Office of Personnel Management yesterday to a House subcommittee reviewing legislation that would remove a financial penalty for federal retirees who wish to rejoin the government.

Currently, the salaries of retirees are reduced by the amount of their pension during their period of re-employment. In some scenarios, a retiree could return and be working for free.

The Bush administration and some members of Congress, such as Reps. Tom Davis (R-Va.) and Kenny Marchant (R-Tex.), have proposed allowing agencies, on their own, to rehire federal retirees without a salary offset. Now, agencies must ask the OPM for a waiver to bring back a retiree.

Although the Bush administration has urged agencies to step up their recruitment of young and mid-career employees, some officials are worried that the government will lose seasoned employees because of retirements over the next decade. Yesterday, Rep. Danny K. Davis (D-Ill.) chaired a hearing of the House Oversight and Government Reform subcommittee on the federal workforce on whether to change the rules on the reemployment of federal retirees.

Federal agencies expect to lose a substantial number of baby boomers during the next decade, and if agencies falter in hiring, many managers would like to lure back retired workers who have the experience and skills the agencies need to carry out their missions.

Reemployed annuitants in the workforce numbered just a few thousand, or about 0.3 percent of the executive branch last year, testified Patrick Purcell, a pay and benefits expert at the Congressional Research Service.

Historically, members of Congress have been wary of permitting government workers to draw "dual compensation" or to "double dip." To prevent abuse, bills pending in the House and the Senate would limit the number of days each year that a retiree could work for the government.

The National Active and Retired Federal Employees Association said it supported ending the salary offset. Dan Adcock, assistant legislative director for the group, told the House panel that many retirees avoided the red tape involved in obtaining an OPM waiver by going to work for a government contractor "where their federal annuity presents no barrier to being paid full salary at the new job."

But Maureen Gilman, legislative director for the National Treasury Employees Union, said the union was not aware of any serious problems with the current limitation on retirees and expressed concern that the Davis bill "could easily be subject to abuse" because of "the lack of standards and the elimination of OPM approval."

Too many agencies are understaffed because of inadequate funding, not because of a lack of qualified job applicants, Gilman said.

Student Loan Repayments on the Rise

A round of cheers for the departments of Justice, Defense and State, the Securities and Exchange Commission and the Government Accountability Office.

Over the past four years, they have been at the top of the list of agencies that offer a student loan repayment benefit to employees, one of the most effective ways to hire and keep young people.

In fiscal 2007, the Justice Department provided student loan reimbursements to 2,463 employees, worth more than $20.5 million. That's a 24 percent increase in the number of employees receiving the benefit and a 17 percent increase in the amount of the repayments, compared with the previous year. Most of the loan repayments went to FBI employees, including 948 special agents and 359 intelligence analysts.

The Defense Department used student loan repayments as an incentive to recruit and retain mechanical engineers, nuclear engineers, electronics engineers, contract specialists and others. The State Department offered the perk to Foreign Service political affairs, economics and public diplomacy officers. The SEC made loan repayments on behalf of lawyers, accountants and others. As in the past, the GAO used the repayments to recruit analysts.

Summaries of how agencies are using the program are featured in a report to Congress by the Office of Personnel Management. According to the report, 33 agencies provided 6,619 employees with more than $42 million in student loan repayments in fiscal 2007. Compared with 2006, the number of employees receiving the benefit went up 15 percent. The average loan repayment benefit was $6,377.

Under the program, agencies may provide up to $10,000 a year in repayments to employees who sign an agreement to remain at their agencies for at least three years. The lifetime maximum that can be provided to an employee is $60,000.

Of the 83 agencies that turned in data to the OPM, 38 said they either provided loan repayments or have set up a repayment program for future use. Eighteen agencies told the OPM that budget limitations hamper or prevent their use of the program.