- The Washington Times - Monday, June 22, 2009

Two of the most basic human emotions — fear and hope — have thrown thousands of retirement-age federal workers into a workplace quandary.

The fear part has caused many to consider retiring much earlier than planned. They want to get out before Congress wrecks their retirement package.

The hope side of the equation has just the opposite effect. It is keeping many workers, who had planned to pull the plug this year, on the job.

Here’s the deal:

The fear factor: Republicans in Congress, looking for ways to cut federal outlays, persuaded their leadership to endorse a plan that would (if enacted) require federal and postal workers to work longer to get benefits promised them, and would withhold any annuity payments until they age 62, even if they retired much earlier.

They dusted off an annual list of cost cuts, which the Congressional Budget Office is required to compile, and zeroed in on one that said Uncle Sam could save money by delaying pensions to age 62 and basing annuities under the Civil Service Retirement System on an employee’s service time and highest three-year average salary. The current formula — which is not going to be changed — bases annuities on length of service and the high-three-year formula.

Nobody has put that proposal into legislation. It is merely part of a ways-to-save-money laundry list the Republicans sent to the White House. But when it became known and then blown out of proportion, many panic-stricken feds started making plans to get out while the getting is good. But the fact remains that it is just a proposal, and nothing more. Feds under the Civil Service Retirement System (CSRS) are not in danger of having the rules changed late in their careers.

On the hope side: Workers who are under the Federal Employees Retirement System (FERS, which covers most current employees) were expecting Congress to give them a perk long available to workers under the older CSRS plan. The idea was to cure the so-called FERS flu by giving employees an incentive to save their sick leave. Congressional investigators estimate that it costs the government more than $60 million a year because so many FERS employees burn up their sick leave before they retire.

Under the plan, which was part of the tobacco bill approved by the House, FERS employees would be able to include unused sick leave to boost their service time. For workers with a year of unused sick leave, that would translate into a monthly annuity increase of about 1 percent.

The Senate stripped the FERS flu cure — and half a dozen other House-passed federal employee perks — from the bill it approved and President Obama signed into law. Because the bill was on the legislative fast-track, the House had taken the fairly unusual decision to accept whatever the Senate approved (and rejected) in its bill.

Groups that represent federal and postal workers have promised to go back to Congress to see if they can win approval of a FERS sick-leave credit bill. They will try to sell it as both an equity issue (since one group of feds already has it) and as something that will actually save taxpayers money. Unions see the use-it-or-lose it system as silly and unfair.

Organizations representing federal managers say they current sick-leave policy is disruptive and wasteful when large numbers of key employees start taking long weekends to use up their sick leave. They say it makes scheduling difficult because, unlike vacations, which must be approved in advance, sick leave is nearly always a sudden decision.

The odds of Congress approving the FERS flu cure this session are about the same as the odds of Congress revamping the CSRS retirement program. That is, slim and none.

Pro-fed groups and members of Congress will work on the hope part and squash the fear factor. But time is short, and now that the tobacco bill has been approved — giving federal Thrift Savings Plan investors the generous Roth option — it is unlikely Congress will serve up another batch of good news for feds.

Mike Causey’s column runs Mondays. Contact him at mcausey@federalnews-radio.com or 202/895-5132.

• Mike Causey can be reached at mcausey@federalnewsradio.com.

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