USA: Mounting Retirement Worries

WASHINGTON, DC (Washington Post), July 31, 2006: With substantial numbers of baby boomers - those born between 1946 and 1964 - likely to leave government for retirement in the next 10 years, the Bush administration and Congress are looking for ways to keep experienced hands. Most federal agencies have plans to ensure that critical jobs are filled as employees retire, but some officials are concerned that staff shortfalls could develop and hamper the government's response to a national crisis. As an example, they point to the Federal Emergency Management Agency, which suffered from lax staffing practices in the months before Hurricane Katrina. Rep. Jon C. Porter (R-Nev.), chairman of the House Committee on Government Reform's federal workforce subcommittee, and Bush administration officials signaled at a hearing last week that they are open to modifying the "retire rehire" rules. "Workforce shortages and national emergencies highlight the need for management flexibilities that permit agencies to bring back the right people to fill an important need," Porter said. Nancy H. Kichak , an associate director at the Office of Personnel Management, said the agency is studying a "range of options that will encourage employees to extend their careers with part-time employment." One option would permit federal retirees to come back part time without a pay cut. Most retirees who are hired back by the government have their salary offset by the amount of their pensions, or prorated if hired part time. The administration also is interested in changing how federal pensions are calculated to avoid penalizing employees who choose to work part time in the government at the end of their careers. To some extent, the restrictions on hiring retirees grew out of a widespread perception that government employees should not be able to "double-dip" -- to simultaneously receive full salaries and government pensions. But the bias against double-dippers began to ease in 1999, when Congress eliminated a cap on combined compensation from a military retirement and a civil service salary. Proponents said the government was losing too much expertise to the private sector, in which federal retirees can earn salaries and collect their government pensions. The rules have provided for exceptions, usually to allow agencies to bring back retirees for emergencies. Congress allows the OPM to waive the salary offset case by case in emergencies and for jobs that agencies have exceptional difficulty filling. The OPM granted waivers at the Defense Department after the Sept. 11, 2001, terrorist attacks, allowing about 800 people to be rehired. About a third were exempt from salary reduction. After Hurricane Katrina, the Small Business Administration used salary waivers to recruit 30 people to handle disaster loans. The State Department has brought back retirees to support relief after the South Asian tsunami, and the Agriculture Department is hiring retirees to help plan for an outbreak of avian flu. In fiscal 2004, Congress authorized the Defense Department to hire retirees without going to the OPM for waivers. To avoid abuse, the department allows such rehiring only to fill critical jobs or when necessary to provide continuity during transitions, Patricia S. Bradshaw , deputy undersecretary of defense for civilian personnel policy, testified at the hearing. From November 2003 to May 31 this year, 1,500 former employees have been hired by the Defense Department, less than 1 percent of hires, Bradshaw said. The director of national intelligence recently approved hiring retirees to fill critical jobs, Ronald P. Sanders , the intelligence community's personnel policy chief, told the House subcommittee. The 2004 intelligence reform law authorized a National Intelligence Reserve Corps for temporary assignments without salary offsets. If Congress relaxes the rehiring rules, agency officials hope to have an edge when competing with companies that also need the expertise and networking skills of federal retirees. Many federal employees in the Washington area retire before they are 62 and take jobs as consultants or with contractors who provide services and products to the government. Employees who leave government with security clearances are usually in high demand and often negotiate a salaries higher than what their old agencies can pay. By columnist Stephen Barr © 2006 The Washington Post Company