For disabled feds, workers’ comp beats retirement

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In 1996, the General Accounting Office (since renamed the Government Accountability Office), the investigative arm of Congress, pointed out that a 1981 proposal by the Reagan administration included a provision to convert workers’ compensation benefits to retirement benefits at age 65, but the measure did not become law.

In 2004, Shelby Hallmark, director of the Office of Workers’ Compensation Programs at the Department of Labor, testified to Congress about the problem.

“Under current law, the thousands of long-term FECA (Federal Employees’ Compensation Act) beneficiaries who are over normal retirement age have a choice between federal retirement system benefits and FECA benefits, but they overwhelmingly elect the latter because FECA benefits are typically far more generous,” he said.

In a prepared statement to The Washington Times, the Labor Department said, “Language addressing this issue and other reform measures was put forth in the President’s (fiscal) 2011 budget submission to Congress.”

David Williams, vice president of policy for the Citizens Against Government Waste, a watchdog organization, said, “It’s ridiculous to give people a choice” between receiving retirement benefits or collecting workers’ compensation.

“It’s just another example of why people are frustrated with the government,” he said.

Over the years, several little-noticed government reports have raised concerns about the issue.

A 2005 audit by the Office of Inspector General for the Veterans Administration found that beneficiaries can remain on workers’ compensation rolls until they die.

Citing Labor Department figures, the office estimated annual savings across the government of nearly $500 million by moving workers into a retirement system.

In 2003, the U.S. Postal Service’s inspector general cited potential savings of $19 million over 10 years if only 255 totally disabled postal employees were required to retire.

That same report found there were 81 employees who had been collecting workers’ compensation payments for between 40 and 50 years.

A spokesman for the Postal Service said the agency doesn’t have any control over the federal workers’ compensation system.

A 2007 report by the Congressional Budget Office (CBO) summed up both sides of the issue.

Under the current system, “FECA (the Federal Employees’ Compensation Act) provides what could be considered a windfall for permanently disabled employees who otherwise would be retired, indefinitely paying them benefits that are higher than those offered by their retirement plans,” the CBO noted.

On the other hand, the CBO pointed out that injured workers who reached retirement age might have higher living expenses than their non-injured counterparts “and thus need higher compensation.”

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