Agencies don’t take advantage of ability to rehire retirees at full pay and annuity

Several federal agencies are not using the authority granted to them by Congress to rehire federal retirees at their full salaries while continuing to pay their pensions, a new watchdog report finds.

When federal retirees are rehired, their salary ordinarily must be offset by the amount of their annuity. The 2010 National Defense Authorization Act allows agencies to temporarily waive that deduction and compensate both the salary and annuity of a rehired employee to mitigate hiring and retention challenges, as well as “to fulfill missions critical to the agency and to assist in the development, management or oversight of agency procurement actions, among other purposes,” the report stated. The authority provided by the statute is due to expire in October 2014.

The Government Accountability Office examined six federal agencies and found that they had made “very little use” of the dual compensation waivers available in fiscal 2010 and 2011.

GAO examined use of waivers over two fiscal years in the Treasury Department, U.S. Postal Service, Office of Personnel Management, U.S. Agency for International Development, Small Business Administration and the Nuclear Regulatory Commission. The agencies granted a combined total of 187 waivers in fiscal 2010 and 247 in fiscal 2011. Treasury used the most waivers in both fiscal years: 167 in fiscal 2010 and 214 in fiscal 2011. The department used the waivers to hire back Internal Revenue Service agents to train younger agents, according to the report.

GAO considered data from the six agencies because dual compensation re-employment data were not available across all agencies.

Officials at the agencies told GAO that they used a combination of waivers provided through the NDAA authority, as well as other allowances in place, for instance, in the 2005 Energy Policy Act. An agency cannot grant a waiver to more than 2.5 percent of its total number of full-time employees; if the number of rehired retirees exceeds 1 percent, then the agency must prepare succession plans. None of the agencies that GAO studied hit the 1 percent threshold.

NRC was the only agency to respond to GAO’s findings. The commission acknowledged that although it did not often take advantage of the authority provided, it supported continuation of the temporary authority.

“We nonetheless find this a valuable human capital tool and hope that we continue to enjoy access to it,” NRC wrote.