Copyright 1999 The Washington Post
The Washington
Post
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March 24, 1999, Wednesday, Final Edition
SECTION: METRO; Pg. B07; FEDERAL DIARY
LENGTH: 740 words
HEADLINE:
Balm For Wounded Retirees
BYLINE: Mike Causey
BODY:
If William Shakespeare were alive
today and a GS 12 federal worker or civil service retiree, he would likely
forget about what Brutus did to Julius Caesar and use his famous "unkindest cut
of all" line to describe the government pension offset law.
The offset law has reduced -- in most cases wiped out -- the spousal or
survivor Social Security benefit of an estimated 266,000 people. Most of them
are retired civil servants or other people receiving a pension from employment
that wasn't covered by Social Security. The benefit at issue is considered
"unearned" in that it is based on the Social Security-covered employment of a
spouse. Congress long ago imposed an "offset" that reduces the spousal benefit
by $ 2 for every $ 3 the retiree receives from a civil service pension. Example:
If you are due a spousal Social Security benefit of $ 600 a month, and you
receive $ 900 a month from a civil service pension, the entire Social Security
benefit is offset. You get none of it.
That harsh offset would be
modified under legislation due to be introduced today by Rep. William J.
Jefferson (D-La.). Under his plan, nobody would suffer a reduction if the
spousal benefit and civil service annuity combined were $ 1,200 or less a month.
Amounts over that limit would be subject to the offset formula.
The
chances of modifying the offset formula appear better this year than ever
before. Last year, Jefferson introduced the same bill, and it took most of 1998
to persuade 183 other House members to co-sponsor it. But when he introduces the
bill today, it will have 114 original co-sponsors, according to the National
Association of Retired Federal Employees.
Sen. Barbara A. Mikulski
(D-Md.) plans to introduce offset modification legislation in the Senate.
Social Security 'Windfall'
Reps. Barney Frank (D-Mass.) and Max
Sandlin (D-Tex.) have introduced bills dealing with the effect of the "windfall"
law on Social Security benefits earned by federal workers. The windfall law
reduces the Social Security benefits of government retirees who worked less than
30 years in Social Security-covered employment. The Social Security benefit of a
federal worker retiring today at age 62 could be reduced by as much as $ 3,000 a
year. Unlike the offset law, however, the windfall law does not eliminate a
Social Security benefit.
Sandlin would eliminate the windfall law.
Under Frank's bill, there would be no windfall reduction if Social
Security and civil service pension benefits were less than $ 2,000 a month. From
$ 2,000 to $ 3,000, benefits would be subject to a partial reduction, and
amounts of more than $ 3,000 a month would be subject to the full formula.
The windfall law already has affected an estimated 414,000 people.
Retire or Wait?
A number of people have asked if they should
delay retirement to see whether a windfall or offset bill is enacted. The short
answer is: no.
In either case, the change would apply to people who
already are retired, as well as future retirees. So, the status of either bill
should not be a factor in deciding to retire or work longer.
Long-Term
Care
The House civil service subcommittee will hold a hearing April 8 in
Jacksonville, Fla., to get the views of federal workers and retirees on
long-term care insurance legislation. Chairman Joe Scarborough (R-Fla.) has
introduced a federal family long-term care plan. The White House is backing
different long-term care legislation.
Both proposals would require
federal workers and retirees and covered family members (spouses, parents and
parents-in-law) to pay the full premium. Both would make coverage available to
anyone in the federal family.
The difference is in the amount of
government control in setting premiums and benefit levels. Scarborough wants to
let insurance companies compete for business on the basis of premiums and
benefits. The White House wants the Office of Personnel Management to have a
role in negotiating premiums and benefits, as it now does for the federal health
insurance program.
Daily benefits in most current long-term care plans
are about $ 100 a day. Premiums are based on the age of the individual at the
time of enrollment. Many private plans offer low-cost premiums but reserve the
right to turn down people because of age or preexisting medical conditions.
There would be no such restrictions under the proposed federal plans.
Wednesday, March 24, 1999
LOAD-DATE: March 24,
1999 
