OPM Director Testifies on Federal Employment Benefits

August 2, 2007 – 10:13 pm

Washington, D.C. — U.S. Office of Personnel Management Director Linda M. Springer today urged lawmakers to approve legislation on a range of workplace rules and employee benefits to help the federal government build an effective work force, including the ability to retain older, more experienced employees.She also urged support for legislation that would enhance agencies’ efforts to rehire retirees on a limited basis. If approved, agencies could more easily re-employ experienced individuals to mitigate the loss of valued baby boom-era employees who are expected to retire in large numbers in the coming years.

Appearing before the House Subcommittee on Federal Workforce, Postal Service and the District of Columbia, Springer said the federal government “has long been a recognized leader in employer-sponsored benefits,” helping to ensure agencies have a competitive advantage in recruiting and retaining top talent.

“We must continue to offer a full range of benefits that effectively meets the needs of all our employees, retirees, and their families,” said Springer.

Three proposals are currently before Congress:

  • Part-Time Reemployment of Annuitants: would allow agencies to re-employ retired federal employees on a limited basis (temporary appointments, on part-time or full-time basis) without reducing their salary by the amount of their annuity. The additional service would not increase annuity payments.
  • Federal Employees Health Benefits (FEHB) Improvements Act of 2007: would permit the Blue Cross Blue Shield Service Benefit Plan to offer a third level of benefits, which current law limits to two levels. If approved, Blue Cross Blue Shield would be free to offer a High Deductible Health Plan and compete in the growing market for this health-care product.

Another proposal would remove annuity computation penalties against employees covered under the Civil Service Retirement System (CSRS) who adopt a part-time work schedule toward the end of their careers. Springer told the subcommittee that passage would help agencies retain experienced and still-productive employees who wish to ease into retirement, instead of retiring outright. Enactment also would enable agencies to hold on to valued employees who could further groom their eventual replacements

Springer summarized for subcommittee Members the current package of federal employee benefits, including the Federal Employees Group Life Insurance (FEGLI) Program and Federal Employees Health Benefits (FEHB) Program, which began in 1954 and 1960, respectively. She also highlighted recent benefits additions, including long-term care insurance, flexible spending accounts, and dental and vision insurance.

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