Thousands of federal workers who are also retired regular military officers can expect something extra--an average of $9,000 per year--in their check starting next month. It is part of a far-reaching new law that could also pave the way for much bigger future pay raises for civilian federal workers.
The "raise" for the military retirees will vary widely. It is actually a restoration of income denied the military retirees for decades by the just-repealed Dual Compensation Act. It limited the amount of retired pay the regulars could get while in civil service jobs. It also had an impact on retired pay of some military retirees who took jobs with some state and local governments, including as schoolteachers.
Under dual comp rules--repealed effective Oct. 1--retired regular officers who went into service before Aug. 1, 1986, were allowed to keep only $10,450.77 per year of their retired pay plus half the remainder. Regulars who joined the service after that date were restricted to $9,298.94 per year--plus half the remainder--of their retired military pay while working as civil servants. That part of the dual comp limit didn't apply to the larger number of reserve officers, and enlisted retirees, working in government.
The pay restrictions were lifted when President Clinton signed the defense authorization bill, which contains, or restores, many other long-sought benefits for military personnel. The first retired military paychecks, reflecting the changes, should be sent out to most eligible retirees by Nov. 1.
Various groups, led by the Alexandria-based Retired Officers Association, have been fighting for 20 years, in some cases, to win improvements for or restore benefits taken from military personnel. The new law represents a high-water mark for their lobbying efforts. Among the changes:
* The legislation guarantees uniformed military personnel a 4.8 percent pay raise, effective Jan. 1. That 4.8 percent increase for military personnel cleared the way for legislation, sponsored by Rep. Steny H. Hoyer (D-Md.) and Sen. Ted Stevens (R-Alaska), which says civilian federal workers will get the same raise--an average of 4.8 percent--in January. President Clinton had originally budgeted 4.4 percent for civil servants.
* Military personnel will also get raises, of up to 5.5 percent (depending on grade and time in service) in July. Over the next six years, starting in 2001, they will also get percentage pay raises under an enhanced formula that will slightly exceed average increases in private-sector pay. Backers say that will narrow the pay "gap" between military personnel and comparable private-sector job skills. Government data now indicate the military are paid about 13.5 percent less, on average, than they could earn in the private sector. The new pay formula, Congress said, will narrow that gap to about 8 percent.
The military benefit could serve as a political battering ram for federal employee unions, allowing them to argue--as they did this year--for equal treatment with the military.
* High-level military retirees, who are now in civil service jobs, will also get any benefit from the new law. It eliminates the cap on the amount of combined retired military and civil service pay that officers and enlisted personnel (regular or reserve) can earn. Currently that cap is $110,700 per year. It will benefit about 600 military retirees whose combined retired pay and civil service pay now exceeds that amount.
Social Security Checklist
Beginning next month, the Social Security Administration will mail working Americans statements showing how much they--and their employers--have paid into Social Security. The annual statements, which should arrive three months before your birthday, will also show your estimated Social Security benefit at age 65. It should be an invaluable tool for people to help them plan for their retirement. It may reassure some people and cause others to start saving more for retirement.
But federal and postal workers--especially those under the old Civil Service Retirement System--need to do some homework when they get their statements. That's because the benefits shown will not take into account the impact of the so-called "windfall" or "offset" laws on federal retirees. The windfall law can reduce (but not eliminate) the Social Security benefit earned by many federal workers. The offset law can eliminate entirely the spousal (unearned) Social Security benefit of a federal retiree.
Fran Valentine from the Social Security Administrations will discuss the new benefit update statement, and explain how offset and windfall work, at 9 a.m. tomorrow on WUST radio (1120 AM).
Mike Causey's e-mail address is firstname.lastname@example.org