Advocates of better pay for federal executives are trying to hit congressional tightwads where it counts, telling them government is actually losing money by keeping its top career people on $50.112.50-per-year diets.
The General Accounting Office says the executive turnover rate is now running above 90 percent. That means that nine of every 10 top career officials retire -- some as early as age 55 -- as soon as they become eligible.
Because of the pay cap ($50,112.50) on top government salaries, the GAO says that too many executives are retiring too soon. This, it says, puts a drain on taxpayers who help finance retirement benefits and also pay for executive replacements. GAO says the executive turnover rate in the 55-to-59 age group has jumped from 18.3 percent in early 1978 to a level of 94.7 percent last August.
Most of the officials leave as soon as possible, GAO surmises, because their salaries have been frozen and many believe they would be better off getting cost-of-living adjustments as retirees, or taking second careers in the private sector, or both.
(Key Senators are working on a plan to give top executives some kind of pay raise this fall, over and above the 4.8 percent slated for rank-and-file bureaucrats. Federal executives have been denied raises for the last couple of years and are now due a catch-up of 16.8 percent. But opponents of the executive pay raise are planning to renew a no-raise rider on an appropriation bill that would continue to deny nearly 30,000 top federal workers, most of them in metro Washington, any pay raise this year.)
In a letter to Senate and House leaders, the GAO says that the abnormally high retirement rate of executives, coupled with the costs of replacing them, will cost the taxpayers about $67,000 per executive over the next three years. This is how GAO figures it:
If an executive aged 55 with 30 years service (at the $50,112.50) level retires today he would get a pension of about $92,828 over the next three years. Presumably the government would replace that individual at a three year cost of $150,338, GAO says.
If Uncle Sam could slow the retirement pace, GAO says, by giving executives the 16.8 percent catch-up raise, many executives would stay on in government. Even at the higher pay rate, the executives' three-year salary of $175,593 -- would be cheaper, by $67,573, than the cost of putting him out to pasture and hiring and paying a replacement.
GAO says raising executive pay to encourage top brass to stay on would "not only prevent the loss of valuable managerial talent" but also -- and it uses those magic words -- it would be "cost-effective." Many members of Congress tend to salivate anytime they hear the words "cost-effective." If enough of them can be convinced that the government can save money by raising executive pay, the supergraders' salary increase should be assured this year. The key word is if!