THE TOUCHY ISSUE of constructing a new pension system for federal workers took a big step toward resolution this week when the Senate Governmental Affairs Committee unanimously approved a compromise measure. Neither the administration nor the House has supplied useful leadership on this issue, so strong bipartisan Senate support behind a sensible plan is especially important to get Congress moving.
The basic design of the proposal, developed by Sens. Ted Stevens, William Roth, Thomas Eagleton and Albert Gore, follows the three-tiered pattern now popular in the private sector. Social Security, with its full-inflation protection, provides the base. The next layer gives workers an assured pension supplement determined by years of service, salary before retirement and age at retirement. No contribution from the worker would be required for this benefit. Finally, an optional "thrift plan" tier would allow workers to make employer-matched contributions to a tax-deferred savings plan.
Compared with the retirement system that previous federal workers have enjoyed, the proposed system would provide less generous early retirement features and less complete inflation protection. On the other hand, it would provide superior disability and survivors' benefits, and much better benefit "portability" for the many workers who now sacrifice all benefits when they leave federal service for the private sector. And for the taxpayer the plan would offer substantial future savings.
A final deft addition to the plan, which alleviated union concerns and secured solid bipartisan support in the committee, would give workers an additional option. By agreeing to pay a small extra contribution, and by sacrificing some employer matching of thrift- plan savings, workers could choose to have more complete inflation protection at earlier retirement ages. The total cost of the plan would be unaffected.
The administration has remained officially opposed to any plan that does not seriously undermine pension protection for federal workers. That's not a useful position. Federal pensions have been overly generous and poorly designed. Congress was right to cover new federal workers under Social Security and require that a new, coordinated pension system be developed for them. But federal workers, as able Cabinet members and lesser officials will confirm, do much important work for this country from policing air traffic safety and environmental hazards to processing tax returns and Social Security benefits. A decent though responsible pension system is needed to attract and hold quality workers. The committee's plan is an excellent start in that direction.