[Congressional Record Volume 147, Number 177 (Wednesday, December 19, 2001)]
[Extensions of Remarks]
[Page E2333]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




      INTRODUCTION OF THE DEFERRED ANNUITANT FAIRNESS ACT OF 2001

                                 ______
                                 

                        HON. NYDIA M. VELAZQUEZ

                              of new york

                    in the house of representatives

                       Tuesday, December 18, 2001

  Ms. VELAZQUEZ. Mr. Speaker, later today I will introduce legislation, 
the Deferred Annuitant Fairness Act of 2001, to correct a glaring 
inequity in Federal retirement law. At a time when we are considering 
legislation to protect the hard-earned retirement benefits of working 
men and women--and give them more control and responsibility over their 
income in retirement, at least one class of federal government retirees 
find themselves at an unfair disadvantage and their retirement benefits 
eroded through no action of their own.
  I speak of deferred annuitants of the federal government--employees 
who work for the Federal Government for at least five years, vest in 
the retirement program, and who separate from service before becoming 
eligible for immediate retirement. When these individuals claim their 
retirement annuity in later years, the pension benefit they have 
financed is eroded by inflation and they are put at a financial 
disadvantage which they cannot overcome.
  Under current law and practice, the Civil Service Retirement and 
Disability Fund invests employee contributions but gives no added value 
to a retiree for the time his or her money was invested before the 
deferred annuity starts to be paid out. As a consequence, if two 
employees gave identical service, with the first retiring in 1970 and 
the second in 2000 with annuities for each starting in 2000, the second 
retiree receives nearly five times the annuity of the first. In 
addition, the spouse of a CSRS retiree is not protected during the 
deferral period. (This protection is already afforded to FERS spouses 
and spouses of Members of Congress participating in CSRS.)
  This legislation will make two primary changes in current law to 
correct this inequity. First, it will compensate deferred annuitants 
for the added value generated over the deferred period from investing 
what was deposited into the trust fund on behalf of the employee up to 
the time of separation from service is compensated. Second, it will 
eliminate the disparity in spousal protection for deferred annuitants 
covered under CSRS and FERS.
  Mr. Speaker, fairness and equity should be the watchword when it 
comes to the treatment of our federal workforce--the hundreds of 
thousands of men and women who dedicate their lives to service to this 
nation and our people. With the changes proposed in the legislation I 
introduce today, federal employees who take a hiatus from their federal 
service before retiring will be protected from inflation and the 
erosion of their pension benefit available upon retirement. I urge my 
colleagues to join me in support of these changes.
  This measure is endorsed by the National Association of Retired 
Federal Employees.

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