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Lawmakers Pitch Major Changes to Some Feds’ Retirement Perks
Certain employees would become exempt from tax penalty while others would receive annuity boost.
Federal law enforcement officers could soon receive a boost in their retirement benefits, thanks to a recent push from lawmakers in both parties.
One measure applies to all of federal law enforcement, allowing officers and federal firefighters to access their Thrift Savings Plan funds at a younger age without facing the normal tax penalty from the Internal Revenue Service. The Federal Public Safety Officer Retirement Equity Act, introduced in the Senate by Sens. Pat Toomey, R-Pa, and Michael Bennet, D-Colo., would remove the 10 percent penalty for retirees who access their defined-contribution benefit before the age of 55.
Most federal law enforcement personnel are eligible to retire at age 50 if they have accrued 20 years of service. Those who have worked 20 years are forced into retirement at the age of 57. Civilians who access their retirement investments, such as a 401(k), prior to turning 55 if they are retired, or 59.5 if they are still working, incur the IRS fine. A 2006 bill exempted state and local law enforcement from the penalty.
“This early withdrawal penalty for some of our longest-serving federal law enforcement officers should be fixed,” Toomey said, “and I am pleased to work on a bipartisan, common-sense solution.”
The Federal Law Enforcement Officers Association praised the measure, saying its passage would demonstrate “support for those who defend our homeland.”
Of course, those officers already earn boosted retirement benefits compared to other federal workers. When it comes to the defined benefit portion of their retirement perks, law enforcement personnel receive a more generous annuity calculation and -- as mentioned -- can retire earlier.
A law enforcement officer retiring at age 50 with 20 years of service whose “high-three” year salary average is $65,000, for example, would receive an annuity of $22,100 per year, according to the American Federation of Government Employees. A non-LEO with the same high-three retiring at age 55 would receive just $13,000 per year.
It is this discrepancy that prompted Rep. André Carson, D-Ind., to introduce a measure that would grant Federal Protective Service officers, who work within the National Protection and Programs Directorate at the Homeland Security Department, the increased retirement benefits. For the purposes of annuity calculations, FPS employees are not currently considered LEOs.
David Wright, president of the AFGE local representing FPS workers, said the measure would help boost morale at an agency that ranked 308 out of 315 agency subcomponents in the Partnership for Public Service’s best places to work in federal government rankings.
“FPS officers carry guns, make arrests, perform investigations and apprehend criminals,” Wright said. “They are law enforcement officers in every sense of the word, and they should be entitled to law enforcement retirement benefits.”
Carson introduced a separate measure to boost the total number of employees at FPS, who serve at 9,000 federal buildings across the country. The measure would increase FPS’ officers by one-third, and would create a study into requiring all federal building security officers to be government employees rather than contractors.
A DHS spokesman declined to comment on the impact the measures would have on NPPD’s low engagement and morale scores, or if the department felt FPS was understaffed. DHS did not call for any significant change in FPS staffing levels in its fiscal 2016 budget request.
(Image via Matthew Benoit / Shutterstock.com)