Velázquez Reintroduces Deferred Annuity Bill
Velázquez Reintroduces Deferred Annuity Bill
May 20, 2005
Legislation protects federal employee retirement benefits from inflation
WASHINGTON - Congresswoman Nydia M. Velázquez (D-N.Y.) today reintroduced the Deferred Annuitants Fairness Act to help protect federal government workers and their spouses by giving deferred annuitants more control over their income during retirement.
"In return for their years of dedicated service, I believe that Congress has a duty to protect the hard-earned benefits of federal employees from a largely overlooked inequity," Congresswoman Velázquez said. "Under current law, the Civil Service Retirement and Disability Fund invests employee contributions, but fails to index these payments for inflation or adjust the benefits to reflect the time their money is invested in the system. In addition to the loss of value, Civil Service Retirement System (CSRS) spouses are not protected during the deferral period."
The Deferred Annuitants Fairness Act will adjust the retirement accounts of deferred annuitants for inflation between the time they separate from government service and the time they begin collecting benefits. The bill also eliminates the disparity in spousal protection, by providing survivor benefits in the case of death of a deferred annuitant covered under CSRS.
Today, federal employees enrolled in the CSRS retirement program are eligible for a deferred annuity, payable at age 62, if they leave after five years of federal government service. However, the amount they can receive when they separate is not indexed for inflation and remains the same until they collect on the plan, which could possibly be many years later. As a result, most employees leaving the federal service choose to withdraw their retirement contributions and give up the deferred benefits because of the lost value from inflation.
"Clearly, it is time to ease the disparities federal government employees are facing," Congresswoman Velázquez said. "With the support of the National Association of Retired Federal Employees, we can change the outlook for federal retirees by correcting the inequities in the system. This legislation has the potential to impact nearly the 134,000 federal service employees in New York City, 5,200 government workers in the 12th Congressional District, and hundreds of thousands across the country."
http://www.house.gov/velazquez/PressReleases/2005/PR052005.htm