If you will forgive a venture into personal journalism, could I ask you a favor? Pretend you didn't read yesterday's column. If you still have a copy around, please throw it away. Or put it in the bottom of the birdcage. With a little help from my friends, I gave you some bum information. Let us start all over again. Clean slate and all that. Here goes:
Federal and postal workers retiring after Jan. 18 will not be eligible to "lookback" and take advantage of a 7.7 percent retiree raise that went into effect in September. President Carter has signed legislation eliminating look-back on Jan. 19. That will give members of Congress time to quality for the last look-back before it is abolished forever.
Monday's column (which we have agreed to pretend does not exist) was an attempt to let would-be retirees see the dollars and cents benefits of retiring before the look-back feature disappears. Federal officials estimate that thousands of people will quit next month just to cash in on the look-back. The difference between retiring under the look-back, or retiring after it is abolished, works out to a raise of about 3 percent for the typical new retiree. a
To give you a rough estimate of the financial advantages of retiring under look-back, I asked the Office of Personnel Management to take three hypothetical federal workers (all with 30 years' service, all in the fifth step of their grade) and figure two things: what their annuity would be if they retire BEFORE the look-back is eliminated and what it would be if they wait one more day, and retire AFTER look-back is abolished. Unfortunately, OPM misread the question and came up with figures -- published here Monday in that unmentionable column -- that were way, way off. The data down-played the dollar differences because the OPM calculation dealt with the wrong time frame. Several hundred readers who understood the question noticed the errors. OPM got a few telephone calls, too.
Here are the correct figures for the "typical" federal worker, with 30 years of service, in the fifth step of his/her grade. Obviously the actual dollar diffential for individuals will be different, depending on their salary, and length of service. The computations, OPM says, are based on a person who retires next month one day BEFORE the look-back feature diasppears, and the same person who retires one day AFTER look-back is abolished.
A "typical" Grade 5 employe who retires by Jan. 18 will get a monthly retirement check of $581. The same employe retiring the next day would get a monthly check of $564.
The Grade 11 worker retiring on or before Jan. 18 would get $1,064. Retiring one day later would drop the monthly benefit to $1,034.
A Grade 15 employe who quits before look-back is eliminated would get a monthly pension of $2,109. If that same employe waited until the next day, when look-back no longer exists, the annuity would drop to $2,047, according to the OPM figures.
OPM points out that many would-be retirees are figuring, incorrectly, that under look-back they are entitled to the entire 7.7 percent raise that went into effect last Sept. 1. What look-back does, they say, is allow the employe to calculate his retirement based on the assumption that he retired Aug. 31 -- in time to get the 7.7 percent raise. But in taking advantage of look-back, individuals must understand that their high-three-year average salary (on which retirement is based) changed in October when most white collar workers got a 9.1 percent raise. Also, additional service time that employes have put in have boosted their potential retirement income. So the actual benefit of the look-back amounts to a one-shot raise of about 3 percent over and above the annuity they will get if they retire after Jan. 18.