SEN. TED STEVENS, chairman of the subcommittee on civil service, plans to introduce a bill next week to redesign the federal retirement system. The new structure would follow the lines of private-sector pension plans in which basic Social Security benefits are supplemented by additional employer-financed benefits. Civil service and postal unions have traditionally opposed such plans with sufficient vehemence to prevent serious congressional consideration--a position that they might now wish to reconsider.

The federal pension system is very generous in many dimensions--relatively high initial benefits, full retirement as early as age 55 (even earlier when layoffs are in progress) and complete indexing for inflation. In several important ways, however, it is inferior to Social Security. For example, while federal disability benefits are available on very lax terms to mildly disabled--and, frequently, fully recovered--federal workers, Social Security provides considerably higher benefits to completely disabled workers with families. Because Social Security benefits are weighted in favor of low-wage workers, an integrated federal pension system could also increase retirement benefits for most postal workers and lower-paid civil servants.

The fact that the two systems are not currently integrated does work to the advantage of federal retirees who work a few years in the private sector: because of Social Security's weighted benefit formula, they get much higher returns on their Social Security taxes than do people covered by Social Security throughout their working lives. But the other side of this coin is that the half of federal workers who leave the government before retirement get no return on their federal pension contributions at all and miss out on Social Security coverage for much of their working lives. In fact, the benefits of federal pensions are very unevenly distributed. The Congressional Research Service estimates that about one quarter of the federal work force will receive two-thirds of federal pension benefits.

Federal unions have opposed Social Security coverage on the sensible grounds that present civil service pensions are a generally good deal, that generous pensions are an important recruiting point for civil service and that--despite its soaring costs --the system is in no threat of bankruptcy since it has a guaranteed tap on general revenues. The unions recognize that Social Security coverage would improve protection for many workers, but they argue that improvements should simply be added to the existing federal pension structure.

Whatever the merits of those arguments in the past, future debates will be conducted in a considerably different environment. Spending more on the $20 billion federal pension system is out of the question, and federal retirees may even find it hard to fight off cutbacks that the administration is said to be planning. In this context, federal and postal unions might want to consider whether a redesign of federal pensions might not offer better protection for most of their workers--particularly if that can be done without adding to the system's cost or threatening the benefits of those close to retirement or already retired.