OPM, lawmakers seek to ease rehiring of federal retirees

Agencies will be able to rehire federal retirees in nonemergency situations without reducing their salaries if a newly proposed regulation from the Office of Personnel Management is implemented.

OPM proposed that agency heads be allowed to request case-by-case clearance to hire retirees without deducting their government pensions from their paycheck, when there is exceptional difficulty in recruiting for particular positions that are not necessarily related to an emergency. The proposal was published in the Federal Register last week.

Under standard rules, federal retirees who are rehired for government jobs must take a cut in their salary equal to their pension payments.

OPM already grants waivers of the salary offset to agencies in rare emergency circumstances, such as Sept. 11, 2001, but this proposed regulation is intended to broaden the scope of waivers as more federal employees retire and agencies worry about filling their spots.

Some agencies already have their own legal authority to rehire retirees. On Monday, Director of National Intelligence John Negroponte issued a policy memorandum outlining hiring rules for the National Intelligence Reserve Corps, made up of annuitants ready to be rehired temporarily to aid in intelligence gathering for emergencies, said Ronald Sanders, chief human capital officer for DNI.

"Seasoned professionals who can teach our next generations of intelligence professionals...operational and analytical arts are ready to retire," Sanders said at a Tuesday hearing of the House Government Reform Subcommittee on the Federal Workforce and Agency Organization. "The ability to bring back some of those artisans without penalty is critical to our human capital recovery plan."

Rep. Jon Porter, R-Nev., chairman of the subcommittee, convened the hearing to mine for ideas on rehiring government retirees. Porter said he is looking at legislative options with OPM for rehiring annuitants and for allowing federal workers to switch to part time without adversely affecting their pension calculation.

Porter said a Veterans Administration nurse in his district retired from federal service and then opted to return to the VA hospital to help out during a nursing shortage. Because of the salary offset, the nurse instead pursued a contract through a private staffing company with the same hospital that allowed her to continue working and still receive her retirement payments. As a federal employee, Porter said, she earned $35 per hour, but the private contractor billed the hospital $55 per hour.

Waiving the salary offset entirely could give incentives for retirement and cost the government more money, warned Nancy Kichak, OPM's associate director for strategic human resources policy. Kichak advocated judicious use of the waivers.

Waiving the offset also can have negative effects because rehired annuitants cannot make contributions to the Thrift Savings Plan or to their pensions. The Defense Department, which like the DNI has its own special waiver authority, is required to waive the offset when rehiring retirees.

Patricia Bradshaw, the Pentagon's deputy undersecretary for civilian personnel policy, told the subcommittee that she wanted flexibility to keep the salary offset because some employees, especially those who retired early because of downsizing, prefer the chance to build their TSP accounts or pensions.