Bill would restore pension credits for returning federal workers

Legislation introduced on Wednesday in the House would give employees who return to civil service from the private sector the ability to recoup their full retirement annuity without losing credit for previous years of federal service.

Under the Federal Employees Retirement System, workers who leave the government can cash out their annuity or roll it into a private savings account, a decision that erases their pension credits. If they rejoin the government, they are not allowed to redeposit those funds and restore their pensions.

The bill (H.R. 828), introduced by Rep. James Moran, D-Va., would provide former FERS employees who decide to reenter the government workforce after a stint in the private sector the ability to redeposit the full amount plus interest of the annuity they cashed out or rolled over, and to retain their years of service in the calculation of future annuity payments.

"This legislation is about enticing experienced federal employees to return to government service at a time when our nation needs its best and brightest the most," Moran said. "Our bill was developed in response to the coming brain drain -- the fact that in eight years, 90 percent of civil service federal executives will be over the age of 50 and nearing retirement."

During an employee's service under FERS, retirement deductions are withheld from pay at a rate of either 0.8 percent or 1.3 percent, depending on the position. Retirement experts generally caution FERS employees against requesting a refund of those contributions, however, if the employee plans to apply for a FERS retirement benefit in the future, or if they think they may return to federal service.

The so-called redeposit benefit already is available to employees under the Civil Service Retirement System, which applies only to federal employees who began working before 1984. Moran's bill essentially would bring FERS in line with CSRS.

Introduction of the bill drew praise from federal unions and other employee groups, who argue that passage of the measure would make it much easier to recruit individuals who already have significant experience in the federal government.

"As the baby boomers start to flee government, we need to take every effort to ensure their expertise will not be lost with them," said Darryl Perkinson, president of the Federal Managers Association. "FMA is supportive of legislation which could fill mission-critical positions with those who already have a working knowledge of our government."