In a backhanded slap at inflation that could prove to be an administrative nightmare, the Senate Governmental Affairs Committee wants to make sure that high-paid, long-service feds retiring in the future do not get annuities that exceed the salaries they would get if they were still working.
An estimated 100,000 retired federal employes get annuities that exceed the salaries they were paid when they retired. That is because retiree raises are linked to the inflation rate, while pay increases for government employes in recent years have gone up only about half as fast as the cost of living.
To get the maximum annuity (approximately 80 percent of salary) federal workers must put in about 41 years with the government. Because of a number of freezes imposed on top-level federal pay in recent years, a growing number of retirees at all levels now make more, thanks to cost-of-living adjustments, than they did when working.
The Senate committee proposes changing all that by making it illegal for workers in Grade 15 and above (starting salary now is $46,685) to get annuities that exceed the current salary of the grade they retire from. The legislation would not affect the annuity of anyone already retired.
If the provision becomes law, it would mean the government would have to recompute the annuity of every retiree of GS15 and above and match it to current salary twice a year--each March when there is a retiree cost of living raise and each October when there is a general federal pay raise.
That sounds like an awful lot of time, trouble and money to hold down the annuities of high-level civil service retirees whose only crime is that they are trying to keep up with inflation while their active duty coworkers pay is being held down.