Social security for everyone
In urging that new US government workers join the social security retirement program - rather than be allowed to stay in their own federal retirement plans - the National Commission on Social Security has taken a stand that makes sense financially and politically. Such a change would add an additional $30 billion in revenue to hard-pressed social security coffers by the end of the decade. It would enable the government to begin to prune back on the enormous expenses involved in funding liberal federal pension plans - money that would be better spent on improving current salaries.
Perhaps as important, such a reform would lead to greater comparability between federal and private retirement plans. There is certainly an aspect of unfairness when the federal government sets up a national retirement program that excludes the employees who work for the federal government itself.
Congress should move on the plan to integrate new and future employees into social security as expeditiously as possible.
The issue is not one of penalizing government workers, or making federal service less attractive than employment in the private sector. Given the need for first-rate people in government, that ultimately would be self-defeating. In fact federal salaries should be comparable to and, in some essential cases, higher than those offered by the private sector. Rather the issue, as many critics have noted for years, is one of bringing fairness to a federal retirement system that in many respects has provided benefits to civil servants far more generous than those enjoyed by workers in similar positions in the private sector.
To cite just some of the disparities:
* According to the Employee Benefits Research Institute, median benefits for retired federal employees in 1979 were $6,728 a year. That compares to $2,199 for pensioners in private plans.
* Federal employees with 30 years of service can retire with regular benefits at age 55. Future annual benefits are linked to increases in the cost of living. In most cases, persons in private pension plans cannot retire with full benefits before entering their 60s. Future benefits are not always linked to annual cost-of-living increases.
* Many federal employees actually parlay two US government pensions by retiring early (say at age 55), and then taking a private job that qualifies for social security benefits.
* Few private retirement plans come near equalling the benefits of the Civil Service Retirement System, which bases retirement income on the three highest consecutive years of pay, with a minimum pension pegged at 80 percent of actual salary.
Federal employees are already mounting intensive public relations and lobbying campaigns to scuttle the commission's proposals as well as several new changes in the current federal pension plan just proposed by President Reagan in his fiscal 1984 budget requests. Among other things, Mr. Reagan would require that contributions from federal employees rise to 11 percent of pay by l985, up from the current 7 percent. Mr. Reagan would also eventually hike the retirement year for full benefits to age 65, rather than 55.
Congress should not be reluctant to consider making these changes, as well as go ahead with the integration of federal employees into the social security system. At a time when the government's primary retirement plan is threatened with insolvency, it is unfair for the government to maintain a separate and singularly generous pension program for its own employees.