Treasury Union President Urges House Passage Of Legislation To Ease Negative Impact On Federal Retirees

Press Release June 27, 2000

Washington, D.C.?With 242 co?sponsors in support of pending legislation to ease the harsh impact of a law on the retirement income of federal employees, the head of the nation's largest independent union of federal workers urged the chairman of a key House subcommittee to push for full committee consideration of the bill "as soon as possible."

In testimony prepared for the Social Security Subcommittee of the House Ways and Means Committee, President Colleen M. Kelley of the National Treasury Employees Union (NTEU) said the number of co?sponsors shows that "a clear majority" of House Members have spoken in support of H.R. 1217.

The bill would ease the impact of the Government Pension Offset (GPO), Kelley said, calling it a law that "unfairly penalizes individuals who spend their careers in service to their country."

The GPO sharply reduces, or in some cases eliminates, the Social Security benefit that many federal employees are otherwise eligible for on their spouse's work record. Under the GPO, Social Security benefits that would normally be due an individual as the spouse or widow of a Social Security recipient are reduced by two?thirds of the amount of their government pension.

In her testimony, Kelley said the law's impact is especially harsh on "those who can least afford to forgo this retirement income"?most often imposing a "particularly devastating" result on female federal employees.

She pointed out that women often are eligible for only "tiny" federal pensions resulting mainly from interruptions in their careers while raising their families or from working in lowerpaid or entry?level positions for most of their careers.

"Had these same individuals worked in the private sector and collected private pensions, stock options or 401 (k) accounts," Kelley said, "they would remain fully eligible to collect their spousal Social Security benefits."

The NTEU president said the union's files "are overflowing" with correspondence from individuals "severely harmed" by the GPO, and she cited one case as "a particularly cruel application" of the GPO.

She described the circumstances of a woman who has worked for 36 years as a seasonal employee at the Internal Revenue Service's Cincinnati Service Center. Because she works mainly just during the tax?filing season, she'll be eligible for only a small federal pension at the end of her career.

The NTEU leader said this employee cannot afford to retire, although she is fully eligible to do so. Her husband is retired from the private sector and collecting Social Security benefits. As long as she works, Kelley said, she can collect her spousal Social Security benefit of about $550 per month. Upon her own retirement, however, the GPO would be applied and would reduce the spousal Social Security benefit of her retirement income to about $20 a month.

"Surely, the GPO was never intended to thrust individuals such as this one into poverty," Kelley said, calling for prompt consideration and passage of H.R. 1217.

NTEU represents some 155,000 federal employees in 24 agencies and departments.

The reason for the disturbing trend, President Colleen M. Kelley of the National Treasury Employees Union (NTEU) told a Senate Subcommittee, is that the federal compensation package ?including the critical elements of pay, retirement and health benefits?lags farther and farther behind the private sector.

"Federal employees, just like their private sector counterparts, must believe that substantial rewards exist for excellence and productivity," Kelley told the Subcommittee on Government Management of the Senate Committee on Governmental Affairs.

Without appropriate compensation and incentives, she said, the federal government "will find it increasingly difficult to remain competitive" with private employers.

The NTEU president cited studies, including one by the government's General Accounting Office (GAO) going back to 1994, and more recent analyses by Harvard's John F. Kennedy School of Government and the George Washington University public administration department, showing lagging interest in employment with the federal government.

The single most important and pressing step, she said, would be "a decision to fully implement" the 1994 Federal Employees Pay Comparability Act (FEPCA), which called for the closing, in stages over 10 years, of the public?private pay gap. "That would do more to address recruitment and retention in the federal government than all remaining incentive programs combined," she said.

Since its enactment, however, no annual federal pay raise has been even close to the level called for under the FEPCA formula, and the pay gap continues to be sizeable, she said.

Beyond implementing FEPCA, Kelley said, Congress needs to "provide adequate discretionary funding" to agencies to allow them to implement various programs in existing law, including recruitment, retention and relocation bonuses and awards programs recognizing various aspects of excellence in performance.

"Agencies simply do not have the resources to adequately fund these important incentives," she said. "They are constantly forced to rob Peter to pay Paul."

The union leader urged more federal sector use of "family?friendly programs" such as alternative work schedules, telecommuting options, flexiplace, leave banks, child care subsidies and the chance to use personal sick leave to care for ill family members.

"These benefits provide a sense of community both inside and outside the office," she said, emphasizing the positive impact on agency performance of reduced absenteeism, increased morale and motivation and higher rates of employee retention.

NTEU represents some 155,000 employees in 24 agencies and departments, and has long been the leader in the fight for higher pay and a broader range of benefits for federal employees.

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