Effects of Proposed Retirement Changes on a Typical Federal Retiree
GGD-86-51FS: Published: Feb 27, 1986. Publicly Released: Feb 27, 1986.
- Full Report:
Pursuant to a congressional request, GAO reviewed the effects of the fiscal year 1987 budget proposal which recommends changes to the civil service retirement benefits for a typical employee retiring at age 61 after 30 years of service.
GAO found that: (1) the overall effect of the proposed benefit reductions would result in a loss of $112,000 over the lifetime of the typical retiree; (2) the proposal to increase retirement contributions from 7 to 9 percent would require employees to contribute an additional $12,000 over the remainder of their careers; (3) the proposal to go from a 3-year to a 5-year salary average for benefit computation would result in a lower salary base and annuity; (4) the proposal to penalize early retirees will require a 2-percent benefit reduction for each year a person retires under the age of 62; and (5) assuming a 5-percent inflation rate, an employee's first year cost-of-living adjustment would be reduced by $300.