The federal government's 250,000 retirement-age workers have a major stake in some quiet diplomacy taking place on Capitol Hill over an important (and uncertain) deadline in the House tax reform package.
At issue is whether those employes must retire by June 3 to protect themselves from a pension tax change proposed by the House, or whether they can wait until June 30or later.
The House tax reform plan would eliminate a tax-free post-retirement period for feds beginning in July.
Workers who contribute already-taxed portions of their salaries toward retirement are exempt from taxes on their pensions until they have recovered all their contributions.
That recovery period can last up to three years, but federal retirees normally get back their contributions in about 18 months.
If the House version becomes lawand that is a very big ifthe tax change would be effective in July.
Workers retiring under the new rules would have to begin paying taxes immediately on a prorated portion of the government contribution to their pensions.
The Senate Finance Committee's tax bill also eliminates the recovery period, but over two years, starting in 1988.
Nobody knows whether the Senate or House version will prevail when conferees work up a compromise.
But if the House version (with its earlier effective date) wins out, federal workers need to know when they cans retire and remain under current rules.
The bill passed by the House says the recovery rule change "shall apply where the annuity starting date is after July 1, 1986."
Federal retirement rules say that workers who retire by the 3rd of the month have their annuities commence that month. But for workers who retire after the 3rd of the month, annuities start the following month.
The questionover which lawyers, union leaders and legislators are dividedis whether federal employes should retire by June 3 to beat any House tax change or whether they can wait until the end of the month.
Congressional offices and federal employe unions have been advising people who want to be absolutely safe to retire by June 3.
But all acknowledge that the wording in the House bill could mean that employes have until the end of the month.
In the meantime, some very important members of Congress and key staffers are trying to come up with answers.
"The real problem is this could turn out to be a non-event," said a House aide who asked that his name not be used. The effective date in the House bill may not prevail. The aide said: "There is a good chance the effective date will be later. But what do you tell people who are calling right now who want a dead-sure guarantee that if the House version passes as is, they won't get caught?" Events
The Federal Bar Association has scheduled its annual Supreme Court admissions ceremony luncheon for June 9 at the Quality Inn on Capitol Hill. FBA members should call Thomas M. Miller, 638-0252.
The Training Officers Conference will hold its awards ceremony June 10 at the Fort McNair Officers Club. For details contact Richard A. Burdick, 275-2882.