The tentative House plan to merge the civil service retirement sysyem with Social Security has jolted many government workers and caused them to take a new look at their pension system, which is one of the best in the world.
On Tuesday, a House Ways and Means subcommittee voted to phase out the staff retirement system that covers 2.6 million federal employees. It would put them - plus the 14 million state and local government workers - under Social Security. Government workers don't like the idea. For good reason.
The average person retiring under Social Security must work longer, and eventually get smaller benefits, than the average federal worker. This is because the civil service pension program is a staff retirement system, while Social Security is considered only a base income designed to supplement investments, private pension plans and other sources of retirement money.
Federal employees can retire as early as age 55 (if they have 30 years of service) and get full pensions. Those pensions are based on their average high three-year salary. Employees pay 7 per cent of their total income into the pension fund and their agengy matches it. An employee with 20 years in government (or with combined military service) can retire at age 60. And a government worker with only 5 years of service can retire at age 62. Obviously, the longer people work the bigger their annuity.
Federal employees who already are in retirement get an average of $633 a month before taxes. Survivors of a federal retiree get an average of $254. Of course, those are averages. Some get much more, some much less.
The typical federal employee who retired today can expect to get an average pension of $670. If that employee retired now and died, his or her survivor would get $280 a month.
By contrast, the average Social Security benefit today is $234, or $400 for a couple. A mother with two children would get $547, and a disabled person with a spouse and two children now gets an average of $517 a month from Social Security.
Whereas government workers pay 7 per cent of their total salary into their staff retirement plan (with the government matching that contribution), persons under Social Security now pay 5.85 per cent on earnings up to $16,500. That will go up next year to 6.05 per cent on $17,700.
Government figures show that the average retiree recovers all the money he or she paid into the fund in about 18 months. For persons under Social Security, the pay back to them takes a little more than 2 years.
Clearly, the federal retirement program is more generous (and more costly to the individual). But Congress is forgetting that it is not a national retirement program, but a staff retirement system. Insiders doubt that Congress seriously will consider merging the two systems in the near future. But the fact that it even came up for a vote, even in subcommittee, is enough to send chills down the spine of the average civil servant.
Federal Mediation and Conciliation Service: Top regional officials are in town this week for discussions with director Wayne L. Horvitz and headquarters officials. One item on the agenda is Horvitz's desire for the FMCS to concentrate more of its efforts on internal labor disputes in the government.
Insiders say that some of the directors are balking at the plan. They feel it would drain human and financial resources away from private sector disputes that they consider more important. If Horvitz prevails, it should result in more FMCS efforts to reduce the backlog of union-management labor dispute cases in government.
Hatch Act: The Senate Government Affairs Committee tentatively plans and Thursday on legislation to give government workers the right to participate actively in partisan politics. The House already has cleared legislation modifying the Hatch Act, and President Carter says he will sign it.
But the Senate Committee is tied up with the Bert Lance hearings, and they could continue next week, again forcing it to postpone Hatch Act debates. Much will depend on how the Office of Management and Budget director handles himself today. If Lance should resign, or get a clean bill of health from the Committee, the Hatch Act sessions will go on as scheduled.
If the important Lance hearings continue into next week, howvever, that probably will chances for Senate action on theHatch Act this year.