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Federal Employees News Digest : July 22, 2013
Accountability Office, which has done sev- eral studies on the program, FECA doled out more than $2.1 billion in wage-loss compensation to federal workers in 2012. U.S. Postal Service employees comprise a large share of long-term disabled receiving FECA benefits, accounting for 43 percent of all FECA beneficiaries in 2010, GAO said. ‘Tough choices’ Rep. Tim Walberg (R-Mich.)---who chairs the House Education and Workforce Committee's Subcommittee on Workforce Protections, which held a July 10 hearing to examine the issue---said that compre- hensive changes to the program are needed. "Creating a program that prevents abuse by bad actors, reflects the realities of the 21st Century, and provides adequate sup- port to workers will require policymakers to make some tough choices, but we all agree maintaining the status quo is not an option," Walberg said. Under the Labor Department's proposal, FECA would be revised for future total- and partial-disability beneficiaries by set- ting initial FECA benefits at a single rate of 70 percent at the time of injury regard- less of whether the beneficiary has eligible dependents. Another proposed revision would lower FECA benefits to 50 percent of applicable wages at time of injury, adjusted for inflation, once beneficiaries reach full Social Security retirement age. At the hearing, GAO presented the results of simulations comparing FECA benefits to retirement benefits under the Federal Employees Retirement System. GAO found that under the current FECA program, the median FECA benefit pack- age for total-disability retirement-age ben- eficiaries was 37 percent and 32 percent greater than the median 2010 retirement benefit package for USPS and non-USPS beneficiaries, respectively. GAO also found that the proposal to cut FECA benefits at full Social Security retire- ment age "would result in a median FECA package roughly equal to the median FERS retirement package in 2010." The agency noted, however, that the median years of service for the FERS annui- tants it analyzed was about 16 to 18 years, "so these simulations did not capture a fully mature retirement system and likely under- stated the future FERS benefit level." To address that, GAO then simulated a mature FERS system that reflected future benefits of workers with 30-year careers and found that the median FECA benefit package under the proposed change would be from 22 percent to 35 percent less than the median FERS retirement package. GAO also studied potential effects of the proposed changes on partial-disability beneficiaries, which GAO said are "fun- damentally different" from total-disability beneficiaries because they receive reduced FECA benefits based on a determination of their earning capacity. GAO said case studies of partial-disability beneficiaries revealed that the effects of the proposed revisions on those individuals varied based on individual circumstances such as earn- ing capacity and actual level of earnings. Among the case studies GAO examined, beneficiaries with high earning capacities likely would elect to retire under FERS because their potential retirement benefits were substantially higher than either cur- rent or proposed reduced FECA benefit levels. On the other hand, partial-disability beneficiaries with low earning capacities had potential retirement benefits that were lower than their current FECA benefits--- and the proposed FECA reduction would reduce those FECA benefits at retirement age. Union rejects premise But the real issue lies elsewhere, according to one union leader who blasted the Labor proposal in testimony she submitted to the subcommittee. National Treasury Employees Union President Colleen Kelley said the proposed changes overlook a major fact: Once injured federal workers start receiving FECA ben- efits, they accumulate no further retirement credits or contribution matches, and they are not able to make elective contributions to the Thrift Savings Plan. "Forcing an injured worker at retirement age to give up benefits under the Federal Employees Compensation Act to live on retirement savings put aside prior to the on- the-job injury would cause grave econom- ic hardship to many disabled employees," Kelley said. Instead, Kelley said, policymakers should look for ways to cut the costs of FECA other than reducing benefits, such as reduc- ing injuries by improving workplace safety. Kelley also recommended a "change in management practices and culture," saying that the union had encountered "manage- ment resistance or disinterest in light duty assignments, alternative worksites, disabil- ity accommodations and other actions that could allow FECA recipients to return to work. " Many injured employees workers would like to return to work, she said, and could begin working again with more cooperation from agencies. For more on the hearing, go to: http:// edworkforce.house.gov/calendar/eventsingle. aspx?EventID=341427. ••• In Brief Emergency funds hit hard by furloughs A nonprofit group that offers emergency financial assistance to federal employees said furloughs are sparking a sharp increase in the number of emergency loan requests. The Federal Employee Education and Assistance Fund, which is funded primar- ily by contributions from federal workers themselves, reports already having provid- ed emergency loans to financially strapped employees from a number of agencies and departments that have required furloughs, including the Internal Revenue Service, Environmental Protection Agency, Equal Employment Opportunity Commission, Department of Housing and Urban Development, Department of Labor, and Federal Aviation Administration. The group said it anticipates an "ava- lanche" of new loan applications before the end of July---a month when furloughs will begin to reduce the paychecks of nearly 700,000 Defense Department employees. FEEA provides no-interest loans of up to $1,000 to help qualified applicants pay for basic living expenses such as housing and utilities. The group makes payments directly to creditors, and employees pay FEEA back through payroll allotment. "Illnesses, family job loss, and personal disasters such as a car breaking down or expensive dental work can exhaust savings and put families in precarious financial positions," the group said in a press release. "The loss of pay due to furloughs is tipping July 22, 2013 Vol. 63, No. 1 4 Visit us on the Internet at www.FederalDaily.com continued from page 3 continued on page 5
July 15, 2013
July 29, 2013