The plan to trim the next three cost-of-living adjustment (COLA) raises for federal retirees under age 62 is an especially bitter blow to people who normally have to retire early -- military personnel, Foreign Service aides, Secret Service and FBI agents, air controllers, firefighters, and police and prison guards.
More than 50,000 current U.S. civilian workers are covered by special programs requiring most of them to retire at 50.
There are 18,785 retirees in that category now on the retirement rolls. They are among the 10 percent of federal civilian retirees who are under 62.
Almost all career military personnel have to retire before age 62, and nearly 800,000 ex-military personnel will be hit by the COLA cutback. There are 30,000 of them in the Washington area.
The spending-cut package that has cleared both the Republican-dominated Senate and the Democratic-controlled House provides that under-62 retirees will get only half of the projected COLA raise that older retirees get.
If the COLA raise exceeds congressional forecasts (which are 6.6 percent for 1983, 7.2 percent for 1984 and 6.6 percent for 1985), the under-62 retirees will get half the projection, plus all of the difference between the projection and the actual figure.
Example: if the 1983 raise is 8.6 percent (instead of the projected 6.6 percent), under-62 retirees will get half the projection (or 3.3 percent) plus 2 percent. So they would get a 5.3 percent raise while older retirees get 8.6 percent.
The legislation also delays the effective date of COLA raises one month each year, so that the payments will not be made until May of 1983, June of 1984 and July of 1985.
Trimming COLAs for nondisability retirees under 62, and delaying payment for all retirees, will trim their COLA benefits several billion dollars over the next three years.
Many workers who must retire early (or who hoped to do so voluntarily) are worried about the annuity cutback.
Although the legislation deals only with the next three years, many suspect that it could be extended to permanently penalize younger federal retirees.
Judging from telephone calls to this column, and to local members of Congress, it appears that some workers and retirees are planning to sue the government on grounds that reducing annuities for under-62 retirees amounts to a breach of contract.