Phased Retirement Plan for Federal Employees Advances

(From The Washington Post) -- A House committee has approved a bill to allow federal employees to phase into retirement by continuing to work part-time while collecting a partial annuity, while a Senate panel has brought out a budget plan that calls for making federal retirement benefits less generous.
 
The bill approved Wednesday by the Oversight and Government Reform Committee with bipartisan support mirrors language passed by the Senate last month as part of a transportation bill that currently is stalled in Congress.
 
Under current law, the salaries of federal retirees who return to work for the government are reduced by the amount of their annuities, with some exceptions allowing for full payment of both. The phased retirement plan, which the Obama administration has proposed several times, would allow retirees to work between one and four days per week, drawing a proportionate salary and a proportionate annuity.
 
The plan anticipates that phased retirees typically would spend a fifth of their time mentoring younger employees, and that savings of more than $460 million over 10 years would be achieved by not hiring full-time replacements and by paying only partial annuities during that period.
 
“Employees would like to work part time and we would like them to be able to,” committee chairman Rep. Darrell Issa (R-Calif.) said. He said that phased retirement already is a common practice in the private sector and noted that under the bill it would be voluntary for the federal retiree and only available at the discretion of the agency.
 
“Currently many federal employees retire from government service on a Friday and come back on a Monday either as a rehired annuitant or as a contractor,” he said. However, the exceptions allowing receipt of both a full salary and full retirement benefits are rare, and “If you tell people that if they keep working they only get half pay or quarter pay, you’re effectively telling them to retire now.”

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