Federal Pensions: Relationship Between Retiree Pensions and Final Salaries.
Abstract
Federal spending on pensions for retired civilian employees of the federal government represents a significant share of the budget. In fiscal year 1996, excluding interest on the public debt, civilian employee pension benefits (i.e., civil service retirement and disability) was the seventh largest mandatory spending program, with nearly $40 billion in payments to 2.3 million retirees and survivor annuitants. Although current employees finance a portion of these benefits through the contributions they make, the federal government pays most pension costs, as do states and localities and private sector employers. Thus, it is important for policymakers to understand how key features of federal retirement policy-set in statute-affect pension costs. At your request, we are responding to a series of questions about federal and nonfederal retirement programs. This report addresses the part of your request that concerns pension costs and retirement policy. As agreed with your office, our objectives were to (1) determine the number of federal retirees, if any, whose pensions have come to exceed the final salaries that they earned while working; (2) explain why these retirees' pensions came to exceed their final salaries; and (3) determine the difference, if any, in these retirees' pension amounts if current cost-of-living- adjustment (COLA) policy-that is, the COLA policy enacted in 1984, which established the formula and schedule used today by the Office of Personnel Management (OPM)-had been in effect without interruption since 1962, and also determine any difference in the number of retirees whose pensions would have exceeded their final salaries.
Document Details
- Document Type
- Technical Report
- Publication Date
- Aug 11, 1997
- Accession Number
- ADA329206
Entities
Organizations
- United States Government Accountability Office