The government could make long-range, multibillion dollars savings if it gave its own employes the same pension benefits as other taxpayers, according to an important new study by the Congressional Budget Office.
CBO's option papers, which suggest that civil servants either double their pension contributions or retire later and take less, could become one of the hot political items of 1979's search for ways to whack the costs of government.
If left alone, CBO says the U.S. retirement program, which is one of the nation's most generous, will be playing out $194.4 billion within three decades to future wokers -- most of whom are still in junior high school.
CBO says that despite the relatively high federal employe contribution rate toward retirement and insurance -- 7.9 percent of total salary -- the civil service retirement fund is not paying its way. Assuming normal pay raises and inflation continue, CBO estimates, the fund that now has an "unfunded liability" of about $130 billion will have uncovered obligations to employes of $160 billion by 1984 -- only six years from now.
The study by CBO was ordered by the House Budget Committee. It, along with the Carter administration, is looking for ways to cut federal payroll costs drastically over the next few years.
Most dramatic -- and complicated -- of the CBO options is the merger or integration of the Civil Service Retirement system with Social Security. CBO says it would reduce employe costs from 7.9 percent to 5.8 percent, increasing take home pay for the typical civil servant.
Under the pension integration plan now being studied by several committees appointed by the administration and Congress, federal workers would be forced to go under Social Security. They are the largest group of employes in the U.S. not now under the system. Most projections of pension integration show federal workers taking annuity cuts -- ranging from slight to significant -- if that happened.
Putting federal workers under Social Security would result in an immediate, and short-lived loss of income for the government. That would happen because contributions of federal employes to their own retirement fund would drop. But within five years, CBO says, the government would begin to realize significant savings that would amount to a "cumulative net reduction" in retirement costs f $1.8 billion over the next five years.
Another option by CBO, which cannot make recommendations, would almost double the amount employes pay into the civil service retirement fund and for insurance. That would go from 7.9 percent at present to 14.1 percent for each employe.
Other options laid out by the CBO for possible congressional action include toughening the standards government now uses to determine disability retirements, and elimination of regular cost-of-living raises federal and military retirees now get each March and September. The CBO says relatively few private pension plans give full cost-of-living catchup for retirees, and that the government could save millions by modifying its system to the industry practice.
Realigning the civil service retirement program to nonfederal standards would greatly reduce annuities for government workers who retire early. The CBO says early retirement benefits for federal employes "are much more liberal than those provided in the private sector," where most retirement plans are geared to a normal retirement age of 65. Even those tha do allow for early retirement, CBO says, reduce benefits "substantially... to reflect the longer pay-out period."
The CBO study is expected to bring howls of protest from federal workers, federal and postal unions and retiree groups.They will argue with the conclusions, projections and fairness of the options. But the fact is that the nation -- and its political leadership -- is in an era of belt-tightening and government cost-cutting.
CBO, because of its clout and closness to Congress, is a force to be reckoned with. Even a "nonrecommendation," in the form of various options, amounts to a recommendation -- especially for politicans looking for relatively easy answers to immediate problems, and ways to cut back bills coming due in 10, 20 or 30 years.
Flexible Working Hours: Commerce's Patent and Trademark Office will shift to a flexitime work schedule the first week in January. With 2,800 workers it will be one of the largest agencies operating under the set-your-own hours concept. The basic work day will remain 8:30 a.m. to 5 p.m., but many employes will be allowed to come in earlier and leave earlier, or arrive later and work after normal rush hour.
That ought to help out West Coast customers calling the Patent and Trademark professionals for help after the East Coast normal closing time, which is mid-day in Calitornia.