About 20,000 federal workers and retirees who were placed in the wrong retirement system will have to wait at least another year before Congress provides them a remedy.
The two bills that would have corrected the errors were lost in Congress' last-minute shuffle to pass legislation before adjournment. House and Senate lawmakers also butted heads on key provisions in the bills.
The retirement glitch was created more than a decade ago, when Congress established 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 some were not.
As many as 18,000 employees were put in the wrong system. 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.
In July the House passed a bill (H.R. 3249) introduced by Rep. John Mica, R-Fla., that would have give affected employees a choice between staying in FERS or returning to CSRS. Under the bill, agencies would be responsible for incurring all the costs of adjusting affected employees' pension benefits, Social Security benefits and TSP contributions so that those placed in the wrong retirement system receive the full retirement benefits they believe they were entitled to. But after passing the House, the bill stalled in the Senate Finance Committee.
Another bill in the Senate (S. 1710) would have required employees wishing to stay in FERS to pay for lost TSP investments. This legislation, which had Office of Personnel Management support, made it only as far as a Senate Governmental Affairs subcommittee.
In a September speech to the National Association of Retired Federal Employees, OPM Director Janice Lachance expressed her disappointment that Congress did not pass legislation on the retirement issue.
"You all know how important income security is, and we want to rapidly, fairly and finally resolve this problem," she said. "Unfortunately, the House passed its own version which we do not think properly redresses the situation. We had a good answer a year ago. We need to get on with it, and fix this situation for those people who are caught in it."
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