Summary: A review of Federal retirement issues covered the following areas: need for a Federal retirement policy, costing and funding practices, disability retirement, and cost-of-living adjustments. There are 38 retirement systems maintained for various groups of personnel by Federal agencies and instrumentalities; consequently, there is a need to establish an overall, coordinated Federal retirement system. The costing and funding procedures used by many of the systems understate the full cost of providing retirement benefits because normal cost is calculated on a static basis. No consideration is given to the effect of future general pay increases and annuity cost-of-living adjustments on ultimate benefit payments. Agencies are being charged only a portion of the costs of the civil service retirement system. The Government should adopt actuarial valuation methods and funding provisions that reflect the full cost of accruing retirement benefits and charge to agency operations all costs not covered by employee contributions. If a disabled employee can perform in other positions and the agency can find a position for which the employee is qualified, an agency should have reassignment authority and actively seek an alternative position. The definition of economic security should be revised to preclude annuitants from earning more than the current pay for their former Government jobs and yet retaining their annuities. Provisions should be repealed that permit retiring employees to receive higher starting annuities because of changes in the Consumer Price Index before their retirement.
