Change for the Better

Surprising to some, Congress has actually done much to improve federal retirement benefits in recent decades.

The Times They Are A-Changin’ was an anthem for frustrated youth during the 1960s. Could some of that frustration have carried into a few federal careers?  Last week about a new law that allows federal employees to ease into retirement under a phased retirement option. Readers wrote in with doubts about my guess that most new laws over the years have actually improved federal employees’ benefits, despite a near constant stream of threats to reduce them. Here is a quick review of some of the changes Congress has made over the last 25 years that have affected federal benefits. I have rated the laws as good (favorable) and bad (unfavorable) for federal employees.  I retrieved most of this information from the , editions 36 through 58.   Keep in mind that more negative changes might have taken place if not for the hard work and diligence of the many groups that represent federal employees and retirees on Capitol Hill. This list is not all-inclusive. For now, here’s the score:

Come senators, congressmen
Please heed the call
Don’t stand in the doorway
Don’t block up the hall…

Bob Dylan, The Times They Are A-Changin’

I wrote

Federal Employees Almanac


Year What Changed? Good or Bad
1988 Windfall Elimination Provision was modified for those with 21 – 29 years of Social Security covered employment Good
Medicare Catastrophic Coverage Act Bad
1989 P.L. 101-86 prevented Federal Employees Health Benefits premiums from skyrocketing due to Aetna’s pullout from the “big six” FEHB carriers Good
Limit lifted on administratively uncontrollable overtime for law enforcement personnel Good
Medicare Catastrophic Coverage Act of 1988 Repealed Good
1990 Lump Sum (Alternative Form of Annuity) option was suspended for five years Bad
Federal Employees Pay Comparability Act created locality pay and authorized recruitment and relocation bonuses and retention allowances. Good
FEPCA also allowed government agencies to waive dual-compensation limitations and hire civilian and military retirees to meet critical personnel shortages. Good
The Portability of Benefits for Nonappropriated Fund Employees Act, Pub. L. 101-508, allowed employees moving between NAF and appropriated fund positions to bring their pay and benefits with them.  


1991 No major changes to federal retirement enacted  
1992 P.L. 102-484 authorized bonuses of up to $25,000 for DoD employees who resigned or took early retirement as part of the Base Closure and Realignment process Good  
  Budget Reconciliation Act delayed payment of federal civilian cost-of-living adjustments from Jan to Apr in 1994 – 1996 Bad
  P.L. 103-3, Family and Medical Leave Act Good
1993 Omnibus Budget Reconciliation Act resulted in the alternative form of annuity no longer being available for employees whose annuities commenced on or after October 1, 1994, except for employees who have a life-threatening affliction or other critical medical condition Good and Bad
1994 P.L. 103-226, Federal Workforce Restructuring Act, authorized non-defense agencies to offer separation incentive payments (buyouts) of up to $25,000 Good
 Law Enforcement Availability Pay to replace administratively uncontrollable overtime Good
P.L. 103-388, Family Friendly Leave Act Good
P.L. 103-409, Federal Employees Group Life Insurance Living Benefit Act for terminally ill enrollees Good
P.L. 103-353, Retroactive TSP payments for federal employees called to active duty military service Good
P.L. 103-356, Government Management Reform Act limits future annual leave accumulation for SES but protect current leave balance Good and Bad
The Uniformed Services Employment and Reemployment Rights Act (USERRA 38 U.S.C. 4301-4335) Good
1995 No major changes to federal retirement enacted  
1996 Law allowing laid off employees to use annual leave to establish retirement eligibility Good
$10,000 death benefit payable to survivors of a federal employee who died from an injury in the line of duty since 8/2/1990 Good
Allow survivor annuitants to remarry (thereby losing their survivor annuity) to reclaim the annuity if they later divorce. Good
P.L. 104-208 created expanded Thrift Savings Plan options (S Fund and I Fund).
  • Added age-based in-service withdrawal
  • Removed borrowing restrictions from the TSP
  • Allowed mixed withdrawals
P.L. 104-95 made it illegal for states to tax the annuities of retirees, including federal retirees, who have moved to another state (Source tax) Good
1997 Medicare + Choice  (Medicare Health Plans) became available Good
P.L. 105-61 allowed for a 1998 open season for Civil Service Retirement System employees to elect Federal Employees Retiremen System coverage Good
1998 P.L. 105-311 increased Federal Employees Group Life Insurance Good
Public Law 105-33 included a temporary increase in employee retirement deductions during fiscal years 1999, 2000, and 2001. Bad
The FERS Open Enrollment Act created an open season from July 1, 1998, through December 31, 1998. Good
1999 Premium conversion (pre-tax coverage for FEHB and Flexible Spending Accounts) for federal employees enrolled in the FEHB Program. Good


2000 Public Law 106-265, the Federal Erroneous Retirement Coverage Corrections Act, changed the rules for correcting some retirement coverage errors where an employee was covered by FERS erroneously. FERCCA may provide a choice of retirement systems. Good
FERCCA also created the federal long-term care insurance benefit Good
P.L. 106-361 allowed new employees to immediately begin investing in TSP Good
2001 P.L. 107-27 changed mandatory retirement age for firefighters to 57 Good
2002 No major changes to federal retirement enacted  
2003 National Defense Authorization Act for fiscal 2004 provided DoD flexibilities to attract, develop and maintain an agile civilian workforce by rehiring federal retirees to fill critical positions without a salary offset. Good
TSP’s new record keeping system became operational and catch-up contributions began.  L Funds were under consideration Good
2004 High Deductible FEHB plans were introduced (authorized by Medicare Reform law in 2003) Good
P.L. 108-496 allowed the establishment of FEDVIP (supplemental dental and vision program) (program launch in 2006) Good
FEGLI held an open enrollment to celebrate the 50th anniversary of the program Good
P.L. 108-469 ended open seasons TSP, allowing employees to make changes anytime during the year.  Good
2005 Percentage limits for TSP contributions ended.  Good
TSP lifecycle funds launched. Good
2006 Retired federal public safety officers became eligible to exclude from their federal taxes up to $3,000 for their share of FEHBP and Federal Long Term Care Insurance Program premiums. Good

No major changes to federal retirement enacted

2008 OPM launched a retirement records system – RetireEZ, but the program did not work properly and was canceled Bad
TSP limited interfund transfers to two-per-month. Good and Bad
2009 Presidential memo allowed for same-sex partners to be covered under the Federal Long-Term Care Insurance Program and employees were permitted to use sick leave to care for their partners and their children Good
National Defense Authorization Act for fiscal 2010, P.L. 111-84 –   Good
allowed federal agencies to appoint individuals receiving annuities under CSRS or FERS to temporary, part-time positions within the federal government without reducing the individual’s salary by the amount of the annuity, as is usually required under title 5 of U.S. Code; Good
required the computation of an annuity under FERS to include an employee’s unused sick leave in his or her length of service; Good
allowed certain redeposits to the CSRS for periods of service between October 1990 and February 1991 to exclude interest payments; Good
required CSRS annuities for employees whose careers include part-time service to be computed under the same rules that apply to part-time annuities under FERS; Good
allowed former employees who withdrew contributions to the FERS at the time of separation from federal service to redeposit those contributions, plus interest, to the FERS in the event that they are re-employed by the federal government; Good
allowed certain service performed as an employee of the District of Columbia to be credited as federal service for purposes of determining retirement benefits. Good

authorized the head of an agency to grant dual compensation (salary offset) waivers on a temporary basis under certain specified circumstances.


P.L. 111-31 allowed TSP to offer a Roth option

  • Allowed TSP to offer a mutual fund window (not exercised by the TSP Board)
  • Allowed spousal accounts for widows and widowers of TSP participants.
  • New hires have automatic withholding of 3% to go into the G Fund with immediate agency contributions
2010 P.L. 111-148 Extended FEHB coverage to children up to age 26 Good
Limited FSA accounts for health care to $2,500 starting in 2013 Bad
2011 No major changes to retirement benefits  
2012 Phased retirement is made possible by section 100115 of Public Law 112-141, the Moving Ahead for Progress in the 21st Century Act, or MAP-21. Good
Public Law 112-96 required new employees to pay an additional 2.3 percent into their pensions Bad

This column has been updated.