Summary: Minimum benefits that are guaranteed to all disability retirees under the civil service retirement program need to be changed. These provisions were adopted by Congress in recognition of the fact that the regular formula used to calculate benefit amounts would provide a very limited income to employees who became disabled early in their Federal careers. About 153,000 disability retirees receive benefits under the guaranteed minimum provisions. Many of these retirees are not, in fact, the short-term Federal personnel that the law was intended to serve as they are also receiving benefits from prior careers in the military. A comparison of former military personnel, who might be receiving both military retirement and minimum civil service disability annuities, showed that 1,202 of the retirees were receiving military retirement pay and/or veterans compensation in lieu of retirement pay and benefits under the civil service retirement program. For these Air Force-civilian retirees, it was estimated that the minimum benefit provision will add about $54 million to their lifetime annuity payments. Since this amount covers only Air Force retirees who retired again from the civil service in a 3-year period, the numbers would be much greater when all Air Force retirees and other military service retirees are also considered. GAO is concerned that the minimum benefit provisions may provide a disincentive for disabled employees who are receiving retirement income from previous military careers to continue working or to seek other jobs that they may be capable of performing. With the guaranteed minimum, disability retirement is generally more advantageous to them than the system's other retirement provisions. A recent GAO report recommended that Congress amend the civil service retirement law to provide that only the benefits earned under the regular formula be given to military retirees. The minimum annuity provisions were designed to protect employees who are required to prematurely terminate their Federal careers because of disability. To cover instances in which the combination of benefits available from former military careers and the regular civil service minimum may be less than those guaranteed, the law should allow for appropriate adjustments to assure that these retirees receive total benefits at least equal to the civil service minimum.
