- The Washington Times - Wednesday, December 29, 2010

The Federal Employees’ Compensation Act of 1916 was never intended to be a retirement plan, but critics say for thousands of government employees, that’s just what it’s become.

That’s because under the federal system, disabled employees unable to return to work get to choose between receiving higher-paying workers’ compensation benefits or the lower-paying federal retirement plan.

For most, the choice is clear.

The money is almost always better under the workers’ compensation program, which pays up to 75 percent of the employees’ salaries tax-free, compared with the 60 percent they would receive under the retirement system.

Across government, more than 7,000 injured employees continue to collect workers’ compensation after retirement age, and a few have even gotten payouts lasting decades well into their 90s, government records show.

**FILE** Sen. Susan Collins
**FILE** Sen. Susan Collins more >

Recent legislation by Sen. Susan Collins, Maine Republican, proposes to transfer workers’ compensation recipients to the retirement system when they reach retirement age.

“These individuals aren’t out on workers’ comp for a period of time to recover from their injuries and then returning to work,” she said at a recent Senate hearing, citing as an example 132 U.S. Postal Service employees age 90 or older continuing to currently receive workers’ compensation.

“These individuals should be switched to the retirement system. They’re never going to return to work over age 90.

“In most states, this could not happen,” she added. “I would mention this is a reform we should implement governmentwide, and it would have real savings for the federal government and for the Postal Service,” she said.

Dan Adcock, legislative director for the National Active and Retired Federal Employees Association, said the organization opposes such a move. He said forcing employees into retirement represents a broken promise to injured workers, who in deciding to take workers’ compensation payments have given up their rights to sue the government over their injuries.

He also said because of the injuries and time out of work, workers likely would not receive the retirement benefits they would be entitled to had they not been injured in the first place.

Government watchdog organizations welcome the move.

“Allowing the government to move workers’ comp recipients to the retirement system would make fiscal sense even in a strong economic and fiscal situation, but under the current circumstances, it is imperative,” said Pete Sepp, executive vice president of the National Taxpayers Union.

“There may not be huge savings at stake relative to the overall financial picture, but there’s no reason to let this opportunity to slip by when the bottom line looks so terrible.”

Moving workers’ compensation recipients into retirement isn’t a new idea.

Story Continues →