[Congressional Record Volume 156, Number 48 (Thursday, March 25, 2010)]
[Extensions of Remarks]
[Page E481]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




INTRODUCTION OF A BILL TO REQUIRE INDEXATION OF DEFERRED ANNUITIES FOR 
                          DEPARTING EMPLOYEES

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                          HON. JAMES P. MORAN

                              of virginia

                    in the house of representatives

                        Thursday, March 25, 2010

  Mr. MORAN of Virginia. Madam Speaker, I rise today to introduce a 
bill to require indexation of deferred annuities for departing federal 
employees.
  Federal employees who leave the U.S. Government before age 62 must 
either defer their retirement annuity until they turn 62, or 
immediately withdraw the amount they have contributed to the Civil 
Service Retirement and Disability Fund (CSRDF) for retirement. The 
amount of their annuity is not indexed for inflation, so younger 
employees have little incentive to opt for a deferred annuity that will 
lose real value over time.
  Paradoxically, changing the law to index deferred annuities would 
reduce the federal budget deficit for the first several years following 
enactment, as many more federal employees opt for a deferred annuity 
and outlays from the Treasury to pay departing employees an immediate 
lump sum decrease significantly.
  The long-term effect on the budget is likely to be neutral. Outlays 
for annuities to retirees several years in the future will increase, 
but because employees' contributions to the CSRDF must, by law, be 
invested in U.S. Treasury bonds, the interest will offset future 
increased outlays.
  At a time when the Federal Government is facing the challenge of an 
aging workforce and federal employees are paid 26 percent less than 
their counterparts in the private sector, the excellent benefits 
package the Federal Government offers is a key recruiting tool. 
Indexing federal employees' deferred annuities will improve that 
package, and at the same time reduce the deficit in the short term.
  I urge my colleagues to support this bill.

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