GovernmentExecutive.com

One way to help government offset the looming talent drain is to encourage qualified retirees to return to service. But this option may not be plausible unless one of the more questionable rules in current civil service legislation is changed: the provision that reduces retirement benefits for retirees who return to federal service.

Such reductions do not apply in the private sector, and for good reason. Retirement benefits earned are a part of an employee's total compensation package, in return for services rendered. The value of service rendered in one year is not affected in any way by what an employee may earn in future years. What civil servants earn after government service is no more germane to their retirement pay than the fact that they may have a wealthy spouse.

Two arguments are often heard in support of the benefit reduction for retirees re-entering the federal workforce. The first argument is that federal officials are paid handsomely during their careers and should not benefit from added income beyond retirement.

This is wrong. Civil service compensation levels, especially at the higher levels of government, are not competitive with pay for comparable work in the private sector. Even though federal retirement programs are competitive, and arguably even more generous than those in the private sector, the total federal pay package - salary and benefits - does not match up. Accordingly, retirement pay reductions cannot be justified by arguing that total compensation levels for federal employees are excessive.

The second argument is that federal retirement income offsets should work just like they do for Social Security, where benefits can be reduced if eligible recipients earn extra income. Should these programs work the same way? Not unless you believe the government's role is to set appropriate levels of retirement income for everyone. To a large degree, Social Security is a safety net. While debatable, the argument that high wage earners should receive lower Social Security benefits to protect the neediest retirees has merit. Viewed this way, Social Security payments are not compensation for services rendered, as are federal retirement benefits.

With the coming shortage of federal employees, the government should be encouraging qualified retirees to return to service, either on a full- or part-time basis - not discouraging them with penalties for extending their government service. Title V of the U.S. Code should be amended to change this, in conjunction with the many civil service reforms now being proposed by Congress and the executive branch.