[Congressional Record (Bound Edition), Volume 155 (2009), Part 5]
[Extensions of Remarks]
[Pages 5863-5864]
[From the U.S. Government Publishing Office, www.gpo.gov]




       INTRODUCTION OF THE PART-TIME FEDERAL EMPLOYEES EQUITY ACT

                                 ______
                                 

                          HON. JAMES P. MORAN

                              of virginia

                    in the house of representatives

                      Wednesday, February 25, 2009

  Mr. MORAN of Virginia. Madam Speaker, I rise today to introduce 
legislation that will correct an inequity in the computation of 
retirement annuities for some federal employees. The Part-Time Federal 
Employees Equity Act is intended to help support the federal 
government's ability to retain current employees in the face of the 
oncoming wave of retirement that will hit the federal workforce in less 
than a decade.
  I am proud to represent more than 98,000 Virginians who have served 
our country within the ranks of the federal civil service. Protecting 
the quality of life of these beneficiaries and ensuring the future 
strength of the federal retirement system are two of the most important 
issues to my district. It is essential that Congress support efforts 
that maintain the integrity, quality and vitality of the federal 
workforce.
  It has been well documented that over the next ten years, the federal 
workforce will undergo significant demographic changes that threaten 
the federal government's strength and effectiveness. As the baby-boom 
generation, which makes up a disproportionately large part of the 
overall workforce, nears retirement age, federal agencies will face a 
crisis in manpower, especially within its senior executives and 
management ranks. Information from OPM shows that approximately ``60 
percent of the government's 1.6 million white-collar employees and 90 
percent of about 6,000 Federal executives will be eligible for 
retirement within the next ten years.''
  This likely wave of retirement threatens to drain the federal 
workforce of its most experienced and talented employees at a pace that 
will be difficult to replace with a well-qualified, trained workforce. 
Congress, in coordination with the Executive Branch, must develop an 
overall strategy with specific policy solutions so that the potential 
``brain drain'' doesn't threaten the efficient delivery of government 
services.
  One leading factor that influences the retention of senior personnel 
is the retirement package offered by the federal government. As 
currently structured, the federal retirement system for some workers 
actually penalizes employees that wish to extend their careers by 
working part-time. As the federal workforce faces the prospect of 
losing an unprecedented number of employees over the next 10 years, 
many of the anticipated shortages can be met

[[Page 5864]]

with part-time employees. One of the greatest impediments to allowing 
part-time work are disincentives and restrictions imposed by the 
federal pension system.
  I have introduced the Part-Time Federal Employees Equity Act to 
address the annuity computations of federal employees retiring under 
the Civil Servant Retirement System (CSRS). I believe that this 
legislation can serve the dual purpose of correcting a longstanding 
inequity for retiring federal employees, as well as offering employees 
nearing retirement the option for continued part-time service without 
negatively impacting their retirement benefits.
  Over 10 years ago, the 100th Congress included a provision in the 
Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1986 (P.L. 
99-272) that amended the civil service retirement law for federal 
workers with part-time service. Section 15204 prevented part-time 
employees from being credited with the same number of years of service 
as those who worked full-time over the same period. Before the law's 
passage, an individual who had worked part-time for most of his or her 
career could switch to full-time work the last three years of his or 
her career and receive the same retirement benefits as someone who 
worked full-time throughout the same period.
  As the Subcommittee knows, federal annuities are calculated by 
multiplying the average three highest continuous years of salary, times 
years of service, by an accrual rate. The new methodology determines 
the proportion of a full-time career that a part-time employee works 
and scales annuities accordingly. Under the formula, a part-time salary 
is calculated on a full-time equivalent basis (FTE) for retirement 
purposes. Thus, a worker's ``high-three salary'' could occur during a 
period of part-time service. This often happens when a senior-level 
worker cuts back on his or her hours. The disproportionate share of 
these workers appears to be women, who leave the federal service to 
care for others.
  The problem with the new formula is that it has negative consequences 
for workers hired before 1986. First, it fails to provide the accrued 
full year of credit for each year of part-time service of workers who, 
before 1986, had completed part-time service for which they had 
understood they would receive full-time credit. Second, the formula can 
have a negative impact on retirees' annuity if the computation of the 
``high-three salary'' occurs during part-time service. Specifically, 
the formula incorrectly minimizes full-time employment before 1986, 
which hurts agencies' ability to retain experienced federal workers by 
offering part-time employment. Finally, this complex formula can lead 
to computational errors involving annuities with part-time service. 
There are possibly thousands of civil servants who are eligible under 
CSRS that may be impacted by the inequity in this law.
  My legislative proposal will restore full credit for part-time work 
performed before 1986, eliminate the adverse effect of part-time 
service performed late in an employee's career, and provide a 
simplified annuity computation in cases involving part-time service. 
Though it is important to eliminate the inequity for future retirees, 
it is perhaps more important to tear down the artificial barrier to 
part-time service at the end of an employee's career.
  Madam Speaker, I believe that this proposal will correct a long-
standing obstacle to part-time service and may help agencies retain 
qualified federal employees nearing retirement for part-time service.

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