Senate approves retirement-work hybrid for feds

The Senate passed an amendment Thursday that allows retirement-eligible federal employees to work part time -- a move designed to offset costs of economic development aid in rural counties nationwide.

The measure, proposed by Sen. Max Baucus, D-Mont., passed the Senate by an 82-16 vote. It was put forward just hours before the vote as an amendment to the Surface Transportation Bill.

The American Federation of Government Employees feared the amendment would result in additional, unneeded sacrifices by government workers in a congressional session that already has hit federal pay and benefits -- for instance with a pension contribution hike for newly hired federal employees passed in February as part of an extension of the payroll tax break.

“While the change to federal retirement -- a phased, part-time retirement-employment concept -- may be acceptable to the federal-postal community after proper analysis and study, it is completely outrageous for federal and postal employees to be required, again, to serve as the automated teller machine for programs having nothing to do with deficit reduction,” Beth Moten, AFGE’s legislative and political director, said in a letter to senators Thursday. She also complained that lawmakers had not made the text of the legislation available.

AFGE spokesman Tim Kauffman further explained that the union was not necessarily opposed to phased retirement, but took issue with the process of the legislation.

“What we really have a problem is using the savings that would come from that proposal to fund yet another program that’s unrelated to federal employees,” Kauffman said.

“Our opposition to the Baucus amendment is in how this assistance for rural schools is being paid for,” Moten said. “Federal employees have paid -- again and again and again.”

National Treasury Employees Union President Colleen Kelley echoed those sentiments. “NTEU supports a phased retirement program for federal employees on its merits,” Kelley said in a statement Thursday. “However, we do have serious objections to the use of the projected $450 million in savings from such a program for any use unrelated to federal employees. This includes the rural schools funding initiative.”

The Office of Personnel Management included a similar proposal in its fiscal 2013 budget request. Easing older employees into retirement by offering a part-time work program would save the Obama administration $720 million during the next 10 years, the White House estimates.

Many federal employees are nearing retirement, so part-time work could pad federal agencies’ coffers if they did not have to replace these employees entirely. Under the proposal, part-time employees would receive partial annuities and could earn additional retirement benefits proportional to the amount of time they work. Older employees also would be required to mentor younger new hires and help preserve agency knowledge.

The Baucus amendment’s passage also stoked old AFGE fears of the House’s Transportation bill, H.R. 7. The most recent version of that bill includes a proposal to eliminate the Federal Retirement Employees Retirement System annuity supplement and changes the annuity calculation for new federal hires from one that uses an average of their three highest salaries to one that uses a high-five average.

House Speaker John Boehner said H.R. 7 will be considered next week after a weeklong recess -- and it will look similar to the Senate’s Surface Transportation Bill, according to Reuters.

Boehner acknowledged “internal Republican divisions” over the $260 billion, five-year House-committee-adopted H.R. 7.

“The current plan is to see what the Senate can produce and to bring their bill up,” Boehner told reporters. “In the meantime we’re going to continue to have conversations with members about a longer term approach, which most of our members want. But at this point in time, the plan is to bring up the Senate bill or something like it.”

It was uncertain Thursday whether those internal divisions were related to the pension provision, which was inserted into the highway bill by House leadership to fund its sweeping transportation and energy measures. A spokesman for the House Transportation Committee told Government Executive last month that the primary concern is paying for the highway provisions -- with or without the pension measures. Union leaders were still on guard Thursday, however.

One union representative told Government Executive the pension offsets would be included when H.R. 7 comes to the floor. Another union source suggested that if pension provisions were included, the House would lose Democrats, whose support might be needed to pass the rest of the bill.

National Journal reported Wednesday that the House speaker’s deference to the Senate’s legislation has led Democrats “to gloat that Boehner’s message puts them in the driver’s seat on the massive highway legislation.”

This story was updated to add comment.