THE CIVIL SERVICE retirement system, long advertised as one of the most durable attractions of federal service, is under siege. Its high costs have been attacked by administration budget cutters who want to reduce early retirement benefits, restrain cost-of-living adjustments and increase worker contributions. Congress, meanwhile, has voted to cover new federal workers under Social Security, thereby obliging a redesign of federal pensions for all future civil servants.
In a forum in the Weekly sections of this newspaper Wednesday, civil service chief Donald Devine, supported by a spokesman for an independent taxpayers' group, argued that federal pensions are far more generous than private plans, and that incentives for early retirement are causing the government to lose its most skilled workers. Federal union president Kenneth Blaylock replied that good pensions are needed to attract and hold good workers and that other elements of federal compensation are inferior to the private sector.
In judging federal pensions, Rep. Frank Wolf observed, it is important to remember that--contrary to popular legend--federal workers perform many jobs essential to the health, safety and security of citizens at home and abroad. Most reputable employers provide reasonably decent pensions for their workers, and there is no reason why the federal taxpayer--the civil servants' employer--shouldn't at least match that standard.
But federal pensions are currently much better than even the most generous private worker plans together with Social Security. Workers can retire at age 55 with 30 years of service, benefits can replace as much as 80 percent of recent wages, and pensions are fully adjusted for cost-of-living increases. Worker contributions cover only one-fifth of the current and projected costs. Nor can a convincing case be made that most federal workers--apart from top managers and those with scarce skills--are underpaid relative to the private sector.
Mr. Blaylock correctly argues that judging pensions requires looking at all parts of compensation --pay, pension, health and disability benefits and, for the future, Social Security. But it also means that federal workers have to be willing to consider changes. Federal pensions are a good deal for those who finally get them, but more than 60 percent of federal workers never do. Nor can federal workers defer taxes on pension contributions, as many private workers now can. Rep. Wolf is right in suggesting that an issue as politically and practically important as this deserves high-level, bipartisan attention, now.