S. 1527, the Civil Service Pension Reform Act of 1985
Sep 9, 1985
Testimony was given concerning a bill proposing a new retirement program for federal employees covered by social security. GAO noted that: (1) the proposed bill represented a comprehensive and thorough retirement program design; (2) many of the specific provisions of the pension plan portion of the proposed program were completely consistent with prevailing pension plans; and (3) age 62 is usually the earliest age at which employees can receive unreduced pension benefits. GAO found that: (1) the use of a 5-year salary average for benefit computation was consistent with the majority of private sector plans; (2) the proposed "add-on" of pension plan benefits to social security was not a typical private sector approach; and (3) the "add-on" of plan benefits caused benefit levels to be generally lower for average and higher income employees and higher for lower income employees. GAO also found that: (1) the proposed pension plan required no employee contributions; (2) long-term disability benefits will come from a separate insurance plan rather than the pension plan; (3) employees who did not meet the social security disability criteria but were disabled for useful service would also receive insurance benefits under the proposed plan; (4) the proposed survivor benefit program closely parallels private sector practices, but benefits for survivors of active employees could not begin until the employee would be eligible to retire; and (5) the bill allowed employees to make tax deferred contributions of up to 10 percent of their pay to a thrift savings fund with employing agencies matching 100 percent of participant contributions up to 5 percent of pay.