The House this week passed by voice vote a bill to fix retirement errors affecting nearly 20,000 federal employees.
The Federal Retirement Coverage Correction Act (H.R. 3249) would correct retirement plan snafus for thousands of civil servants, foreign service officers and intelligence agency personnel.
"Every victim should have a realistic opportunity to the retirement correction that best addresses their unfortunate circumstance. Therefore, this legislation provides fair, make-whole relief," bill sponsor Rep. John Mica, R-Fla., said Monday.
The problem began more than a decade ago, when Congress created the Federal Employees Retirement System, which features a stock investment plan and a scaled-back pension benefit. On January 1, 1984 the old Civil Service Retirement System was closed to new enrollees. Those employed after this date were supposed to be placed in FERS, but as many as 18,000 were not. Those employees lost retirement benefits, owed back taxes, and were denied the opportunity to invest in stock funds.
About 10,000 of the mistakes have already been corrected.
Under the correction bill, agencies would be responsible for incurring all the costs of adjusting affected employees' pension benefits, Social Security benefits and TSP contributions so that employees placed in the wrong retirement system receive the full retirement benefits the employees thought they would get.
In April, the Congressional Budget Office estimated that the fix would cost agencies about $121 million over five years.
The Senate Finance Committee is now reviewing the bill, in addition to its own proposal, the Retirement Coverage Error Correction Act of 1998 (S. 1710). The Senate version, which provides for the correction of errors with the exception of those in effect for a period of less than three years of employee service after December 31, 1986, has the support of the Office of Personnel Management.
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