Give part-timers their due

• By Milt x_Zall
• Mar 12, 2000

Some part-time federal employees — most of whom are women — are getting cheated out of retirement benefits they rightly deserve.

Part-time federal employees with some full-time service prior to April 1986 may not be receiving proper credit for their full-time service unless they return to work full time at the end of their career. As a result, these employees stand to lose some of the retirement benefits they have earned.

Before 1986, the government computed retirement benefits for part-time employees based on the average of their highest three salaries (high-3) and fully counted part-time years toward length of service. But because part-time employees ended up with more retirement benefits than they were entitled to, Congress changed the process in 1986.

After 1986, part-time retirement benefits have been determined by using "deemed" high-3 salaries based on full-time pay. This figure is then adjusted based on the ratio of actual hours worked to the total number of hours that could have been worked over an employee's career. The rules create a two-step benefit calculation. Pre-1986 rules were applied to service before April 6, 1986, and post-1986 rules were applied to service after 1986. In many instances, the resulting computation produces the right outcome. But not always.

Employees who have worked a significant number of full-time years before 1986 and who later convert to part time do not fare well under the new calculation method. Employees who work full time at the end of their careers will receive the proper benefits. But the employing agency is under no obligation to allow a part-time worker to return to full-time work and may not even have a full-time position available. Moreover, the employee — by virtue of health, family or many other reasons — may be precluded from this option.

Although there is a simple solution to this problem, neither the Office of Personnel Management nor Congress has done anything about it.

The Civil Service Retirement System and Federal Employees Retirement System Handbook should be modified to allow employees to obtain the retirement benefits to which they are entitled. The cost of such a change would be insignificant because part-time workers constitute only about 3 percent of the federal work force. Only a fraction of those would be affected by changes that would permit an alternate computation.

But cost should not be the issue. The present computation method isn't fair and should be rectified. OPM must inform employees who switch to part-time jobs that their retirement annuity could be negatively impacted. It's time to do the right thing and allow part-time workers to receive the retirement benefits they've earned. Congress should pass the Part-Time Federal Employee Retirement Benefit Fairness and Equity Technical Corrections Act of 1999 (S. 772). The bill would credit any part-time service performed before April 7, 1986, as being full-time. For more information, go to www.homestead.com/ptretirement/federal.html.

Zall is a retired federal employee who since 1987 has written the Bureaucratus column for Federal Computer Week.