U.S. GOVERNMENT PRINTING OFFICE

64–649 CC WASHINGTON : 2000

LAW ENFORCEMENT RETIREMENT COVERAGE

HEARING

BEFORE THE

SUBCOMMITTEE ON THE CIVIL SERVICE

OF THE

COMMITTEE ON

GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED SIXTH CONGRESS

FIRST SESSION

SEPTEMBER 9, 1999

Serial No. 106–120

Printed for the use of the Committee on Government Reform

(

Available via the World Wide Web: http://www.gpo.gov/congress/house

http://www.house.gov/reform

(II)

COMMITTEE ON GOVERNMENT REFORM

DAN BURTON, Indiana, Chairman

BENJAMIN A. GILMAN, New York

CONSTANCE A. MORELLA, Maryland

CHRISTOPHER SHAYS, Connecticut

ILEANA ROS-LEHTINEN, Florida

JOHN M. MCHUGH, New York

STEPHEN HORN, California

JOHN L. MICA, Florida

THOMAS M. DAVIS, Virginia

DAVID M. MCINTOSH, Indiana

MARK E. SOUDER, Indiana

JOE SCARBOROUGH, Florida

STEVEN C. LATOURETTE, Ohio

MARSHALL ‘‘MARK’’ SANFORD, South

Carolina

BOB BARR, Georgia

DAN MILLER, Florida

ASA HUTCHINSON, Arkansas

LEE TERRY, Nebraska

JUDY BIGGERT, Illinois

GREG WALDEN, Oregon

DOUG OSE, California

PAUL RYAN, Wisconsin

HELEN CHENOWETH, Idaho

DAVID VITTER, Louisiana

HENRY A. WAXMAN, California

TOM LANTOS, California

ROBERT E. WISE, JR., West Virginia

MAJOR R. OWENS, New York

EDOLPHUS TOWNS, New York

PAUL E. KANJORSKI, Pennsylvania

PATSY T. MINK, Hawaii

CAROLYN B. MALONEY, New York

ELEANOR HOLMES NORTON, Washington,

DC

CHAKA FATTAH, Pennsylvania

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

ROD R. BLAGOJEVICH, Illinois

DANNY K. DAVIS, Illinois

JOHN F. TIERNEY, Massachusetts

JIM TURNER, Texas

THOMAS H. ALLEN, Maine

HAROLD E. FORD, JR., Tennessee

JANICE D. SCHAKOWSKY, Illinois

———

BERNARD SANDERS, Vermont

(Independent)

KEVIN BINGER, Staff Director

DANIEL R. MOLL, Deputy Staff Director

DAVID A. KASS, Deputy Counsel and Parliamentarian

CARLA J. MARTIN, Chief Clerk

PHIL SCHILIRO, Minority Staff Director

SUBCOMMITTEE ON THE CIVIL SERVICE

JOE SCARBOROUGH, Florida, Chairman

ASA HUTCHINSON, Arkansas

CONSTANCE A. MORELLA, Maryland

JOHN L. MICA, Florida

DAN MILLER, Florida

ELIJAH E. CUMMINGS, Maryland

ELEANOR HOLMES NORTON, Washington,

DC

THOMAS H. ALLEN, Maine

EX OFFICIO

DAN BURTON, Indiana HENRY A. WAXMAN, California

GEORGE NESTERCZUK, Staff Director

GARRY EWING, Counsel

JOHN CARDARELLI, Clerk

TANIA SHAND, Minority Professional Staff Member

(III)

C O N T E N T S

Page

Hearing held on September 9, 1999 ....................................................................... 1

Statement of:

Bryant, Hon. Ed, a Representative in Congress from the State of Tennessee ............................................................................................................. 13

Davis, Hon. Thomas M., a Representative in Congress from the State

of Virginia ...................................................................................................... 6

Filner, Hon. Bob, a Representative in Congress from the State of California .................................................................................................................. 40

Flynn, William E., Associate Director, Retirement and Insurance Services, Office of Personnel Management; Kay Frances Dolan, Deputy

Assistant Secretary for Human Resources, Department of the Treasury;

and John Vail, Deputy Assistant Attorney General for Management,

Department of Justice .................................................................................. 60

Kelley, Colleen M., national president, National Treasury Employees

Union; Peter J. Ferrara, chief economist, Americans for Tax Reform;

and Gilbert G. Gallegos, national president, Fraternal Order of Police .. 95

Mink, Hon. Patsy T., a Representative in Congress from the State of

Hawaii ............................................................................................................ 50

Traficant, Hon. James A., a Representative in Congress from the State

of Ohio ............................................................................................................ 46

Letters, statements, et cetera, submitted for the record by:

Bryant, Hon. Ed, a Representative in Congress from the State of Tennessee, prepared statement of ..................................................................... 15

Davis, Hon. Thomas M., a Representative in Congress from the State

of Virginia, prepared statement of .............................................................. 9

Dolan, Kay Frances, Deputy Assistant Secretary for Human Resources,

Department of the Treasury, prepared statement of ................................. 77

Ferrara, Peter J., chief economist, Americans for Tax Reform, prepared

statement of ................................................................................................... 168

Filner, Hon. Bob, a Representative in Congress from the State of California, prepared statement of ........................................................................... 42

Flynn, William E., Associate Director, Retirement and Insurance Services, Office of Personnel Management, prepared statement of ................. 63

Gallegos, Gilbert G., national president, Fraternal Order of Police, prepared statement of ........................................................................................ 155

Kelley, Colleen M., national president, National Treasury Employees

Union:

Prepared statement of ............................................................................... 135

Various statements ................................................................................... 97

Mink, Hon. Patsy T., a Representative in Congress from the State of

Hawaii, prepared statement of .................................................................... 52

Scarborough, Hon. Joe, a Representative in Congress from the State

of Florida, prepared statement of ................................................................ 3

Traficant, Hon. James A., a Representative in Congress from the State

of Ohio, prepared statement of .................................................................... 47

Vail, John, Deputy Assistant Attorney General for Management, Department of Justice, prepared statement of ....................................................... 82

(1)

LAW ENFORCEMENT RETIREMENT COVERAGE

THURSDAY, SEPTEMBER 9, 1999

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON THE CIVIL SERVICE,

COMMITTEE ON GOVERNMENT REFORM,

Washington, DC.

The subcommittee met, pursuant to notice, at 10 a.m., in room

2154, Rayburn House Office Building, Hon. Joe Scarborough (chairman of the subcommittee) presiding.

Present: Representatives Scarborough, Cummings, and Norton.

Staff present: George Nesterczuk, staff director; Garry Ewing,

counsel; John Cardarelli, clerk; Ned Lynch, senior research director; Jennifer Hemingway, policy director; Tania Shand, minority

professional staff member; and Earley Green, minority staff assistant.

Mr. SCARBOROUGH. Good morning, ladies and gentlemen. I would

like to call this hearing to order. Our purpose today is to delve into

the details of one of the more sensitive subjects in our committee’s

jurisdiction—the Federal retirement benefit. The Federal Government is among the world’s most generous employers in providing

retirement benefits for employees who complete careers in public

service. That benefit comes from annual cost of living adjustments

that are unmatched in the private sector, and Federal employees

are eligible to continue their health and life insurance coverage

during retirement, with the government continuing to pay the employer’s share of the expense.

Select groups of Federal employees qualify for even more generous retirement benefits. Because of the physical and mental strain

associated with occupations classified as Federal law enforcement

officers, firefighters, air traffic controllers, and nuclear materials

couriers, these employees are eligible for enhanced benefits after as

little as 20 years of service. Because these positions demand a

young and vigorous work force, they carry a mandatory retirement

age.

In crafting these benefits, a careful balance needs to be maintained between mandatory attrition and timely recruitment, between loss of experience and proper training of replacement workers, between safety requirements and program costs. The Federal

retirement system is expensive in its generosity and totally unfunded in its asset base. The enhanced retirement for special occupations is even more expensive and much more of a liability on future taxpayers. It is our fiduciary responsibility to our citizens to

make sure that these benefits are properly assigned and extra costs

fully warranted.

2

During every session of Congress, the committee is deluged with

requests to increase or otherwise improve on this generosity. This

session of Congress is no exception. Some of the bills before us

today, while well intentioned, contain provisions that work at cross

purposes with agency missions. For example, forcing experienced

employees into mandatory retirement, while Federal agencies complain of difficulties recruiting qualified professionals into public

service, may not be wise public policy. And, of course, increasing

the costs of retirement to agencies already at their spending caps

simply makes it more difficult for them to perform their mission.

Some might have to reduce other employment to fund this added

benefit. We really must proceed cautiously.

I want to thank our witnesses today, and hope that the evidence

compiled for today’s hearing provides the foundation for a thorough

examination of the many issues involved in the complex management of the retirement system for the Federal work force. Most importantly, we want to come up with something that is fair to the

employees of these very difficult positions and is also something

that we can afford as the Federal Government.

And with that, I would like to turn it over to the distinguished

ranking member from Maryland, Mr. Cummings.

[The prepared statement of Hon. Joe Scarborough follows:]

3

4

5

Mr. CUMMINGS. Thank you, Mr. Chairman. The purpose of this

morning’s hearing is to examine the classification of certain Federal employees as law enforcement officers and their resulting entitlement to special retirement benefits. This issue is important to

me because it affects the law enforcement community.

Earlier this year I introduced H.R. 1769, the Federal Employees

Benefits Equity Act of 1999. My legislation eliminates certain inequities under the Civil Service Retirement System and the Federal Employees Retirement System with respect to computation of

retirement benefits for law enforcement officers, firefighters, air

traffic controllers and others.

The legislation also provides an enhanced annuity to employees

who, after 20 years of qualifying service regardless of age, are

forced to retire due to involuntary separation or for disability. The

measure also provides for a refund of the additional 0.5 percent retirement contribution with interest when employees in this occupation retire or die before obtaining eligibility for the enhanced annuity.

Federal officers in varying degrees and capacities uphold the

Constitution and protect the public welfare. Over the years there

has been much debate and controversy on which types of Federal

employees should be classified as law enforcement officers, and, as

such, should receive enhanced pay and requirement benefits.

In 1988 the Anti-Drug Abuse Act established a national advisory

commission on law enforcement which studied the pay, benefits

and other issues relating to the recruitment and retention of employees defined as law enforcement under Federal retirement laws.

The commission’s report which was released in April 1990 made

several recommendations for interim pay enhancements for law enforcement officers and suggested that the Office of Personnel Management conduct a further study on the need for a new pay system

for Federal law enforcement. The commission’s report did note,

however, that the statute defining Federal law enforcement officers

was broad, encompassing both traditional positions within the field

and less traditional positions not generally considered part of the

law enforcement community.

As recommended by the commission, the Federal Employees Pay

and Comparability Act of 1990 enhance law enforcement pay and

directed OPM to conduct a study of pay and job evaluation for the

Federal law enforcement officers. OPM, along with a 45 member

advisory committee drawing from law enforcement agencies and

employee groups, produced a report entitled, ‘‘A Plan to Establish

a New Pay and Job Evaluation System for Federal Law Enforcement Officers’’ in September 1993.

Two months later, the Committee on Post Office and Civil Service held a subcommittee hearing on the report and its findings. At

that hearing, Ms. Barbara Fisk stated that OPM determined at the

outset that the definition of law enforcement officer used in the

FEPCA provisions based on retirement law needed to be examined

because it covered employees whose primary duties included such

diverse jobs as health care, accounting and cooking, but excluded

employees whose primary duties include maintaining law and

order and protecting property and the civil rights of individuals.

6

OPM’s fact-finding mission confirmed OPM’s belief that the coverage issue had to be reconciled.

It is evident from the witnesses scheduled to testify today that

the coverage issue has not been reconciled. There seems to be questions of both whether the definition of law enforcement officer

should be expanded to include additional categories of Federal employees or whether it should be narrowed.

Finally, determining the definition of a law enforcement officer

is clearly a very complex and controversial issue. This hearing is

an opportunity for us to revisit this issue and find permanent solutions to the concerns that have been raised in the past and that

are still lingering today. I want to thank our witnesses for being

here and I look forward to your testimony.

Mr. SCARBOROUGH. Thank you, Mr. Cummings. We certainly appreciate your work on this important issue and the bill that you

have offered.

I want to get to our first panel, which is a group of colleagues

that care deeply about the issues before us today and have introduced bills that provide the background of this very important

hearing. Let’s start with the Honorable Tom Davis of Virginia who

has introduced H.R. 583, which is a bill to provide law enforcement

retirement coverage for assistant U.S. attorneys.

We also have the Honorable Ed Bryant of Tennessee. He is a

former U.S. attorney and is cosponsor of H.R. 583 and is testifying

today also on behalf of the National Association of Assistant U.S.

Attorneys; the Honorable Bob Filner of California introduced H.R.

1228, a bill which would extend Federal law enforcement retirement coverage to several additional employment classifications, including immigration inspectors, Customs inspectors, Internal Revenue Service officers; the Honorable Jim Traficant of Ohio, sponsor

of H.R. 424, a bill which would raise the mandatory retirement age

of the U.S. Capitol Police from age 57 to age 60; and the Honorable

Patsy Mink of Hawaii who introduced H.R. 1748, a bill that would

raise the mandatory retirement age of all Federal law enforcement

officers to the age of 60.

I would like to welcome all distinguished Members and thank

you for coming by today. Why don’t we start with you, Mr. Davis?

STATEMENT OF HON. THOMAS M. DAVIS, A REPRESENTATIVE

IN CONGRESS FROM THE STATE OF VIRGINIA

Mr. DAVIS OF VIRGINIA. Thank you very much for holding this

hearing. I will put my full statement in the record and I will abbreviate it.

Mr. SCARBOROUGH. Without objection, so ordered.

Mr. DAVIS. Let me say that I think law enforcement benefits

should be extended to individuals who choose a career that places

the safety and welfare of themselves and their families in jeopardy.

I think that was the original intent of the law, and that is what

we are trying to do by putting assistant U.S. attorneys under that,

so that individuals who are tasked to uphold the laws of our country are the same individuals who are receiving the law enforcement

benefits.

On a daily basis, assistant U.S. attorneys fight to enforce our

code of Federal laws and are increasingly called upon to enforce a

7

wider range of criminal laws, to bolster the efforts of State and

local governments in the fight against crime, and as we Federalize

more and more crimes, we are finding they are tasked to do more

with less. They carry their jobs on a daily basis without a lot of

fanfare, but they have to prosecute criminals who are represented

by defense attorneys who are getting hundreds of dollars an hour,

who are much better paid than themselves, and they opt to stay

in government and wear the white hat instead of going out on the

other side where they could make much more money simply to be

on the right side. But it becomes much more difficult when the pay

differentials increase and increase.

Providing the full benefits I think would be a career enhancement that would keep more people in the Federal service for a

longer period of time. Right now the average period is 10 years.

The hours are long and the pay is low. AUSAs have placed themselves and their families in harm’s way by prosecuting criminals.

I refer to a specific case, of which there are many in my testimony that I will not review with you here, but there are cases

where the assistant U.S. attorneys are threatened by criminal elements and put their lives and their families at risk and sometimes

need extra protection just for sitting out there and doing their jobs.

Under the Code, the duties of law enforcement officers are defined as primarily the investigation, apprehension, or detention of

violators of Federal law.

If we were to use the broader definition of the original criteria

behind creating enhanced retirement benefits, I think the assistant

U.S. attorneys should be eligible for this additional benefit and

should have been for a long time. When the enhanced retirement

benefit was first created in 1948, it applied to those occupations

that require great mental or physical stamina. Certainly the welldocumented demands of the assistant U.S. attorneys’ workload and

schedule apply to that. As the recent class action suit filed by the

AUSAs against the Department of Justice shows, these prosecutors

are routinely called upon to put in significant amounts of overtime.

DOJ illegally describes overtime as a necessary requirement of the

job and assistant U.S. attorneys are fighting crime and sacrificing

time with their families, putting them sometimes in jeopardy, and

they receive very little tangible recognition for their work.

Let’s touch briefly on the overtime issue that faces AUSAs as it

affects or, more pertinently, does not affect their enhanced requirement benefit. Assistant U.S. attorneys are currently involved in a

class action lawsuit against the DOJ. DOJ does not pay its attorneys overtime, as required by the Federal Employees Pay Act. For

years, DOJ as the enforcer of this law in other agencies has knowingly violated the law by denying them overtime pay. To add insult

to injury, the DOJ requires its attorneys to keep two sets of books,

one that reflects a 40 hour work week, and one that shows the actual number of hours that are worked. The latter set of books is

given to Congress for appropriations purposes. It is also provided

to Federal courts and judges when requesting that fees be paid.

The DOJ does not deny this overtime benefit to any other law enforcement division under its jurisdiction. It is a reasonable compensation that assistant U.S. attorneys are entitled to by law, and

certainly their counterparts, the defense attorneys, are getting paid

8

by the hour, as they sit there through these lengthy criminal cases,

instead of a flat fee.

I do not believe that the law enforcement retirement benefit

should have any impact on the overtime benefit or the resolution

of that, but the law enforcement officers receive overtime for much

the same reason that they receive their enhanced benefit: They face

an unusually high level of stress and danger in performing their

jobs.

Since I introduced this legislation on February 4, we have been

contacted by assistant U.S. attorneys across the country who have

shared their harrowing experiences fighting crime and the very

real threats that have caused them to change their life-style. We

have shared this with some of the committee in our prepared testimony. The legislation has garnered significant support in this Congress. The number of inquiries that I have received about this in

the brief period between the 105th Congress and the 106th Congress shows that they are widely recognized as an essential part

of our Federal crime-fighting cadre. And we have 36 cosponsors.

Some of them are former assistant U.S. attorneys, and you are

going to hear from a very distinguished one, Ed Bryant, who is

going to be testifying here today, who can testify firsthand what

they face.

I am not going to attempt to move the legislation forward until

reasonable, fair offsets are found. And I think the mandatory retirement is a good question when you get into this intellectual exercise, and I will be flexible in terms of working with you on that.

But they ought to be compensated better or we will lose a good

cadre of people that are up against the top-notch defense attorneys

in some of these cases, and we get outgunned. I think this is an

important step to keeping us on the front levels of law enforcement

and keeping the best people we can find to go into the courtroom

and prosecute criminals. Thank you.

Mr. SCARBOROUGH. I thank you, Congressman Davis. You are

right. This is a very important issue. You have received a lot of inquiries. I know that I certainly have.

[The prepared statement of Hon. Thomas M. Davis follows:]

9

10

11

12

13

Mr. SCARBOROUGH. The genesis of this hearing is when a group

of assistant U.S. attorneys came to my office and brought it up. It

is an issue that needs to be addressed. It is critical to us.

Representing the group that first talked to me about it today is

Congressman Ed Bryant who was a former U.S. attorney.

STATEMENT OF HON. ED BRYANT, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF TENNESSEE

Mr. BRYANT. Thank you, Mr. Chairman. I thank you and the

members of your subcommittee for holding this hearing today, and

I am pleased to testify on behalf of the National Association of Assistant U.S. Attorneys in support of H.R. 583, the Assistant U.S.

Attorneys Retirement Benefit Equity Act of 1999.

As a former U.S. attorney from the western district of Tennessee,

I have firsthand experience and knowledge about AUSAs and the

integral role they play in Federal law enforcement. I had 29 working for me at that time.

Currently there are more than 4,700 AUSAs who work in 93 separate offices throughout the country. These AUSAs are the U.S. attorneys’ principal support for ensuring that laws are faithfully executed. In today’s environment of sophisticated white collar crime,

domestic and foreign terrorism, international narcotics trafficking,

espionage, government program fraud, organized crime and labor

racketeering, the role of the AUSA has evolved to include substantial investigative duties. AUSAs control and direct the most crucial

investigative tool in the criminal justice system—the grand jury.

AUSAs oversee and participate in the investigative activities of the

Federal law enforcement officers working on major prosecutions

and review and approve complex search warrants and applications

for wiretaps. In multi-agency cases, the AUSA functions as a supervisor of agents’ activities, particularly challenging since there is no

line authority from the AUSA to an agent.

Civil AUSAs defend lawsuits brought against Federal agents in

connection with their performance of their law enforcement duties.

Prisoner litigation is an additional aspect of the civil AUSAs’ practice. Civil AUSAs represent the government in suits brought by

those who wish to obstruct government operations. AUSAs have

been threatened in this context, had false liens filed against their

property and have had false Form 1099s filed with the IRS.

The increasing complexity of Federal investigations and the resulting criminal and civil litigation has spawned a relatively new

phenomenon—the career AUSA. Unfortunately, as more and more

AUSAs seek careers within DOJ, the Department has not reacted

to provide the professional benefits deemed routine in the highly

stressful law enforcement community. As you know, under the current retirement system, Federal law enforcement agents are eligible to retire at 50 percent of their ‘‘high-three’’ salaries at age 50

with 20 years of service. Currently AUSAs are the only employees

in the criminal justice system who do not receive this law enforcement retirement which recognizes the stressful occupations associated with fighting crime and the physical and mental challenges

which wear down body and mind at an accelerated pace.

Originally authorized in 1948, Federal law enforcement retirement benefits were intended to liberalize retirement provisions in

14

order to enable agents and investigators to retire at age 50 while

still physically fit. In enacting that legislation, Congress recognized

the stressful, sometimes dangerous work performed by the law enforcement officers, as well as the need for career investigators in

the Federal Government. At that time there were no career AUSAs

and therefore there was no reason for their inclusion in the statute.

Back in those days the U.S. attorneys and the assistants all left

every time there was a change of administration, but since that

time circumstances have changed significantly. Only during the

1980’s did the AUSAs begin to remain employed by the Department until retirement on any regular basis.

In the last 2 decades, the position of the AUSA has evolved from

being largely political, where it was routine for all AUSAs to resign

upon the appointment of a new U.S. attorney. Then the newly employed attorneys inherited entire caseloads of ongoing prosecutions,

and this disruption badly damaged the continuity of the investigations and prosecutions, both civil and criminal. So it was important

to have this continuity, and this is a good thing that we are going

to, with more and more of our AUSAs becoming career oriented.

Congress has recognized the importance of maintaining an experienced force of career AUSAs. In 1990, the Civil Service Due Process Amendments extended the procedural protections of the Civil

Service Reform Act to the AUSAs. No longer constantly in jeopardy

of being replaced for practical reasons, more and more of our

AUSAs are remaining with the DOJ for their career, thus ensuring

the government is getting the best representation.

I have got a couple of more pages, but let me skip through this

because I have my full statement in there. I do want to say, given

the increasing complexity of the legislation dealing with offenses

against the United States, and the increasing sophistication of the

law breakers—and my colleague, Mr. Davis, alluded to this and

their ability to hire the best and pay them at tremendous rates per

hour to represent them—our own U.S. DOJ requires the services

of experienced, seasoned AUSAs to protect the interests of the

American people to be able to compete on a level playing field. The

work is demanding and stressful and fraught with danger.

I too know of cases when I was a U.S. attorney where assistants

were under physical threat and death threats. I know that they

face threats and strain of mind and body to a degree equal to and

in some instances exceeding that faced by others traditionally included in the Federal law enforcement retirement system.

The time has come for Congress to recognize AUSAs for what

they are, an essential part of the front line defenders of safety and

justice in America. The AUSA should no longer be the only member

of the Federal criminal justice system denied law enforcement retirement. And I thank the Chair for listening.

Mr. SCARBOROUGH. Thank you, Congressman Bryant.

[The prepared statement of Hon. Ed Bryant follows:]

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

Mr. SCARBOROUGH. Congressman Filner.

STATEMENT OF HON. BOB FILNER, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF CALIFORNIA

Mr. FILNER. Thank you. I want to start off with an ironic kind

of note that drives me as I put forward this legislation. I am sure

that you have visited the National Law Enforcement Memorial in

Judiciary Square, which was established in 1991 to honor Federal,

State, and local law enforcement officials. When they die, their

names are inscribed on this memorial. Many of the people I am trying to talk about in my bill who do not have law enforcement status in life, if they get killed in action doing their work as inspectors, for example, their names are inscribed on the law enforcement

memorial. So in death, they get the status that I think they ought

to have while working to protect us.

I hope you keep that irony in mind as we proceed on this legislation because I am honored to be in the presence of valiant men and

women who put their lives on the line to ensure our Nation’s safety. Most are not recognized as law enforcement officers, like Inspector Robert Labrada who put his life on the line 2 years ago when

a desperate marijuana smuggler opened fire on him and his partner, Inspector Lira, at the United States-Mexico border. Both men

were seriously injured and hospitalized. Fortunately, they survived

the gun battle, unlike the gunmen. If they had not, these valiant

inspectors’ names would have been put on the wall of that memorial.

I think it is a cruel and inhumane irony that this situation exists. It does not make sense. How can we not afford law enforcement status for these men and women? They daily encounter dangerous and life-threatening situations. I represent a neighborhood

in San Diego, the home to the busiest border crossing in the world,

the San Ysidro community of our city. Customs and INS inspectors

work side by side with others who have law enforcement status,

and they have, we might say, an equal opportunity to be exposed

to danger and I have seen this firsthand. They exchange shots and

are roughed up, forced to run after suspects, disarm them, just the

same as their counterparts on the Border Patrol or INS who do

have law enforcement status.

INS Inspector John La Cuesta who is also here with us from our

Southern California District can similarly attest to the dangers of

this job.

Others are in a similar position ranging from drug enforcement

agency diversion investigators to Department of Defense officers in

charge of law enforcement of our military bases. They do the job

of law enforcement officers. They do not have the status or the benefits.

I know the work of the INS and Customs Inspectors at the

United States-Mexico border. I live right at the border. These men

and women make our community safer, but because of the current

lopsided law, they are not given status and we lose, as a result,

vigorous trained professionals to other law enforcement agencies.

The average length of Federal service according to reports is 15

years compared with 7 for the Inspectors in Customs. Why would

Customs Inspectors and INS Inspectors who daily face threats from

41

drug smugglers upset after being arrested, who disarm thieves as

they attempt to run across the border after robbing businesses in

Mexico, who stop drunken revelers attempting to drive into the

United States, why would they not want to work for some other organization that does recognize them as law enforcement officers?

These Inspectors, like the others I deal with in my bill, carry guns

and perform a great service in protecting us as they face a variety

of dangerous folks.

Last year alone, aside from minor injuries, 25 INS Inspectors

were seriously injured on the job in dealing with these situations.

The Customs Service has the highest narcotics seizure rate of any

agency in the United States, year after year, with the highest apprehension of fugitives and felons of any agency in the country, and

that is a testament to these Inspectors. They face dangerous felons.

They have been run over by cars. They have been shot at and disarm sawed-off shotguns, switchblade knives and handguns. Many

have lost their lives. In fact, 43 Inspectors in U.S. Customs and

INS have been killed in the line of duty. And as I said at the beginning, their names are inscribed on the National Law Enforcement

Officers Memorial in their death.

I say, Mr. Chairman, it is too long for these Inspectors and other

law men and women that I refer to in my bill to wait. I think the

cost is way too high not to grant them this benefit.

I am heartened, Mr. Chairman, and Mr. Cummings, to learn and

know of your interest in exploring this issue. I hope we find a way

to do what is right. I know you and your staff have looked at numbers. There are obvious arguments against this, but I ask you to

try to find a way to do it. If you tell me the cost is too high, besides

some questions of the methodology, I will say let’s find a way to

phase in the benefit so that the cost is not as high. Let us deal with

the base wage in a different way if the cost is too high, but let us

grant these men and women the law enforcement status that they

actually perform every day.

Mr. SCARBOROUGH. Thank you, Congressman Filner. You made

some great points and I agree with you 100 percent. The purpose

of this hearing and this committee should be to figure what is possible and what we can do to help those people that are working as

law enforcement officers.

[The prepared statement of Hon. Bob Filner follows:]

42

43

44

45

46

Mr. SCARBOROUGH. Congressman Traficant.

STATEMENT OF HON. JAMES A. TRAFICANT, A

REPRESENTATIVE IN CONGRESS FROM THE STATE OF OHIO

Mr. TRAFICANT. Thank you, Mr. Chairman. I am here on H.R.

424, about the Capitol Police. It would extend the retirement age

from 57 to 60. I think it is justified even though many are concerned that we may have to take other government agencies along

with it, and that would be fine, but I think we should start here

and recognize the impact.

First let me say that in the beginning, the Capitol Police were

looked at as political patronage soft jobs, good jobs. Now, after Officers Chestnut and Gibson, we know this is a police agency.

Here is the dilemma we face, Mr. Chairman: having enough officers. Most Secret Service agents, Treasury agents, FBI agents, they

are all excited with the status of their Federal employment, and

they are not likely to lose their young members. Our young police

officers are being recruited by suburban police departments for

more pay after they have been qualified to the tune of $150,000

taxpayer dollars to say this is a good recruit. Then at age 57, they

are in perfect health, and we tell them they have to leave because

we have set in place some type of an accelerated retirement program that did make sense at some point but now serves no purpose.

Since 1997, in a short 3 years, we will have lost 25 experienced

police officers, most of them who would opt to stay. We are having

our young officers raided, our qualified older officers raided. And

let me say this: Officer Gibson was mortally wounded when he took

the police action that was necessary to protect the lives here at the

Nation’s Capitol.

Experience is very important. I believe that there are merits to

looking at the expansion of retirement age for all Federal agencies,

but I believe that cost factor, which has everybody worried, could

be set aside with an impact evaluation on the Capitol Police.

And let me say this: There are many of these police officers averaging 56 hours of overtime a month because of the shortage of personnel. Now I have to say it, beam me up there. They are taking

our young ones and we are sending our old ones on a fast track

out of here. We are spending millions of dollars on overtime. I

would like for you to report this bill out. Use it as an evaluating

mechanism for that which my good friend and colleague, Patsy

Mink, is bringing forward that would deal with the same issue for

all Federal agencies. Do not tie this up. We will lose 4 more good

officers in the next 2 months.

I ask unanimous consent that my written statement be included

in the record.

Mr. SCARBOROUGH. I don’t think that anyone would dare object.

Without objection, so ordered.

[The prepared statement of Hon. James A. Traficant follows:]

47

48

49

50

STATEMENT OF HON. PATSY T. MINK, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF HAWAII

Mrs. MINK. Thank you, Mr. Chairman and Ranking Member Mr. Cummings. I appreciate all of the comments made by my colleagues, and I support everything that they have said. I am here

to support the bill that I introduced, H.R. 1748, and it is to underscore all of the comments that have been made about the importance of the work that law enforcement officers contribute to our

communities and to the Nation as a whole.

My bill is very simple. It just raises the age of mandatory retire- ment of law enforcement officers from 57 to 60 years. This matter

came to my attention by a constituent of mine who works for the

Department of Treasury in Honolulu. Under current law, Federal

law enforcement officers have to retire at age 57. This includes officers from all of the various Federal agencies, the FBI, Bureau of

Prisons, DEA, INS, and so forth.

The current mandatory age I believe is too restrictive; 57 years of age is too young to force a dedicated officer into retirement. If

we applied this same retirement to the House of Representatives,

159 of us would be forced to retire. Today, medical advances have

dramatically improved health and longevity. Law enforcement officers at 57 years of age are still in their prime and capable of performing the physical demands of their job. They should not be deprived of the work they love merely because they have reached the

age of 57. Raising the mandatory retirement age to 60 would provide them the opportunity to continue to work. It would not jeopardize the safety of the younger officers on the force, nor the citizens they are assigned to protect. Instead, the younger officers

would continue to benefit from the senior officers’ wealth of experience. Other demanding jobs like air traffic controllers have a mandatory retirement age of 60.

Furthermore, under current law the officer does not have to remain on the force until age 60. He can retire at the minimum age

of 50 as long as that officer has completed 20 years of service. They

cannot enter the law enforcement career after the age of 37. They

put 37 as the maximum age for the initial employment, allow 20

years of service, and a person can go out at 57. That is the way

that the current formula reads.

I want to note to this committee that the Federal Law Enforcement Officers Association opposes my bill, and I attach a letter of

their opposition which states primarily that they feel that agent

safety will be impacted; but I am told by the individuals who have

supported my bill that one of the things that they fear is that the

mandatory age debate will renew consideration of raising the minimum retirement age, which they all oppose and I certainly would

oppose that also. I see no reason to deprive experienced officers of

an opportunity to work.

We are facing an increasingly aging population and I am sure

that the law community recognizes the experience that they bear

into their various functions. I am told by this individual who came

to me with this issue that in a 5-year period between 1998 and the

year 2002 in just the criminal investigation division of the U.S.

Treasury, they expect to lose between 40 to 45 percent of their special agents merely because of the mandatory age of 57.

51

And so when you ask me the question what is this going to cost,

I want to raise the issue that my colleague, Mr. Traficant also

raised and others, that to bring in a new person to fill that job

costs hundreds of thousands of dollars for just that one person. And

so if we are talking about money as the main factor against doing

what is logical, I raise for your consideration the point that the loss

of these experienced individuals who want to continue, who are

physically able to continue to work, is a factor that has to balance

off whatever additional costs it might be to retain them, as against

the cost of training new officers to take that position which is being

vacated at age 57 by senior experienced officers that only want an

opportunity to continue to serve. All officers can retire at age 50

if they wish. They can retire at any age at which they choose to

do so after 20 years of service.

It seems to me that this is a fair request and one that takes into

recognition the superior quality of senior officers who merely desire

to stay in, and I see no reason why they should be forced to retire

at age 57. Thank you very much, Mr. Chairman.

Mr. SCARBOROUGH. Thank you, Congresswoman.

[The prepared statement of Hon. Patsy T. Mink follows:]

52

53

54

55

Mr. SCARBOROUGH. Mr. Filner, let me start with you. It sounds

as if you and our other two witnesses who are still here are somewhat at odds with each other. You are wanting to allow more Federal employees to retire at the age of 57. You want to lower their

requirement age. And Congressman Traficant and Congresswoman

Mink are talking about raising the age up to 60.

Who is right and who is wrong?

Mr. FILNER. Obviously we are all right.

Mr. SCARBOROUGH. Can you explain that?

Mr. FILNER. Let me repeat. What we are arguing are whatever

the rules are for law enforcement officers apply to these Inspectors.

If the mandatory age were raised, it would be raised for those coming into that classification under my bill. The question is fairness

and morale and good common sense. Give status to those who are

doing the job of law enforcement, who just simply are denied that

status mainly out of a bureaucratic classification; and whatever

rules apply to those with law enforcement status—that is a different argument—would then be applied to them. They are not arguing for the lower retirement age, they are arguing for the status

and the benefits that come to being a law enforcement officer.

Mr. SCARBOROUGH. So you would not have any objection if that

age was raised to 60?

Mr. FILNER. Offhand I haven’t thought about the legislation

itself, but I doubt it. The question here is equity and training. And

again my colleagues pointed out the costs involved in retraining

new people, which are not calculated in some of your staff reports.

The same applies here in even greater numbers. Without that status and retirement benefit, we are losing good men and women to

other agencies. I see it in my own county where the local police departments and sheriff’s department grab off these people and we

have to train again. We lose money in that deal.

Mr. SCARBOROUGH. We are going to spend the next month or two,

21⁄2 months, trying to figure out how to stay within spending caps,

trying to figure out how to get out of here before Christmas and

pass all of the appropriations bills without busting the budget

agreement that we passed a few years ago. Obviously there are

costs, there are some costs that are involved here. You and I think

Congressman Traficant and Congresswoman Mink have made some

arguments that say hey, there is another way to look at this.

Let me ask you to respond to what the Treasury Department is

going to be saying later on. The Treasury Department witness is

going to testify this morning that H.R. 1228 would cost that Department alone nearly $750 million in payroll costs over the next

5 years and impose an unfunded liability of about $1 billion on the

Federal Employees Retirement Fund. Have you been made aware

of that by the Treasury Department; and if so, what is your response to that?

Mr. FILNER. Well, we have to give you in more detail some of the

criticism that we have of some of the methodology used. The Department used the worst kind of assumptions that everybody retires immediately, and that shoots up the unfunded liability. That

shoots up the cost to the agency.

I think that is probably not a good assumption. If it were, as I

said, we could talk about and I am sure folks would be happy to

56

explore different mechanisms to bring down that cost, whether it

were a phase-in over 10 years even. Again the base pay is not the

major issue, it is the retirement benefits, and so they included that

base pay increase as part of their assumptions.

We will get you in writing our criticisms of the methodology. We

calculated a much, much lower cost based on the figures that were

given to us by the Treasury and other agencies in dealing with the

employee associations that are involved in this. We came up with

far different numbers. As I said, even with those lower numbers,

we can get them lower by again taking some other steps as a compromise way. If we say this is our goal—and I think that is what

this committee ought to do—the goal is equity and common sense.

The costs have to be dealt with, but I would also argue that they

did not factor in the savings that come from a lower turnover,

lower loss of good people and productivity factors, without getting

into philosophical agreements whether those caps mean anything

or should mean anything anyway.

Mr. SCARBOROUGH. I appreciate the offer to send something in

writing. That will help us out.

OPM has provided data that some of the intended beneficiaries

of your bill have to face immediate mandatory retirement, that the

agencies would no longer be able to hire applicants who are older

than 37, thereby cutting off an important source of new employees

that agencies would need to replenish their work force. H.R. 583

would have a similar impact on the Department of Justice. Can you

address what we are going to be hearing from OPM and mandatory

retirement?

Mr. FILNER. Again, my problem is some of what I call bureaucratic response, reasons why we can’t do something instead of let’s

find ways to achieve what we want to.

Clearly you can be flexible in that. You phase in, phaseout. You

do it in a gradual way so you are not faced with those downsides.

So if I said to them, find me a way to do this in which we do not

get the problems, I think then they will come up with that. But

they tend to come up with reasons why you can’t do something

rather than giving them directions that say we want this equity.

We have certain cost containment. We don’t want to have these

employee disruptions that you mentioned. Tell me how you do that,

and I think everybody would be happy to sit down and figure it

out.

Mr. SCARBOROUGH. When you say that you have agencies that

are looking for ways to just say no, you are sounding a little bit

like John Mica. You need to be careful there.

Mr. FILNER. Thank you.

Mr. SCARBOROUGH. Congressman Traficant and Congresswoman

Mink, Representative Filner talked about flexibility, that we can be

more flexible in the way that we deal with this issue. Under current law, agency heads already have the discretion to waive mandatory retirement provisions affecting law enforcement retirement

coverage so that employees can work until the age of 60 with the

approval of the agency head, and data shows that very few employees request such waivers.

57

Would you address why the ability to waive is not enough and

why your approach is not overkill to a problem that some will

argue on the next panel is.

Mrs. MINK. Because basically when you approach the question of

selectivity, giving the agency head the option to waive the mandatory rule, you are opening up a very small window for selected individuals. And it seems to me that if it is OK for some to stay on

until the age 60 or whatever age it is extended to, that we ought

to renew the look at the whole situation.

Given the fact that not very many are going to stay, why not

allow those who want to stay until age 60 an open window to do

so? They already have the options to opt out at early retirement,

at age 57, having come on before 37 and maybe at 27, and they can

retire at age 50. That is a given option under the current rule.

For those that are reaching mandatory age, they have come into

the service just before 37 to get out at 57, but looking at the character of the force, the degree of needs that they have for experienced personnel in a very short period of time, it seems to me that

for those individuals that I have talked to who sincerely feel that

they are being discriminated against by being kicked out so early,

that this option of staying on until age 60 is a reasonable accommodation to those requests rather than having them go through this

complicated system of seeking a waiver and seeking an option from

their superiors.

Mr. SCARBOROUGH. I know that can be frustrating. I actually had

an officer that handed me several times a Dear Colleague from

Congressman Traficant telling me to take it to the appropriate authorities, and I just smiled and kept my mouth shut and kept walking.

Congressman Traficant, why don’t you address that?

Mr. TRAFICANT. Let me talk about the waiver business and about

a term that is involved with the art of elective politics, take elected

out and talk politics. The one waiver that was granted was to a

driver of one of the congressional leaders. A couple of other officers

that sought it couldn’t get through the front door.

My bill is straightforward, and let me tell you something. It

opens up a cost analysis factor that Mr. Filner is now facing, that

Mrs. Mink is now facing, but we can evaluate the impact of cost

through a demonstration of something very significant where we

need Capitol Police here. That is why my bill has been straightforward on the Capitol Police. It takes politics out of it. You don’t

have to know anybody or kiss anybody’s ring, and everybody is

treated the same.

Like old Vince Lombardi said, ‘‘Treat everybody like dogs, by everybody alike.’’ That is what we need to do, Mr. Chairman. I am

very concerned about the loss of Capitol Police personnel. We are

out trying to hire them. I think Mr. Filner and Mrs. Mink’s comment about training is justifiable because you have to look at the

double training: the one that you train that leaves, and the one

that you train to take their place. And then you put them in that

situation where they are still prime targets for leaving. Then you

take a look at the overtime you are paying and the impact on morale which no one has yet talked about. You begin to tear into the

58

morale and fabric of a police force. This is Capitol Police. It is no

longer the country club program.

Let me just say this. The Metro area is here. Many of them have

no retirement age limit at all and they pay more money. So I think

these are justifiable concerns on a macro basis and also the micro

initiatives which we face because our personnel are being recruited

very heavily.

Mr. SCARBOROUGH. Mr. Cummings.

Mr. CUMMINGS. I have just a few questions.

I take it that when this 57 age limit was set, I imagine it was

done for more than one reason. They thought that the people would

not be fit to do the job at that age, and maybe it has something

to do with economics, I am not sure. In Maryland a few years ago

we increased the retirement age for judges. One of the things that

was required, if I recall correctly, was that they had to go through

a physical examination and mental examination to try to make

sure that they were fit to do the job.

I am just trying to look at this whole picture. There is no doubt

about it, when you look at a fellow like John Glenn going up in

space and coming back and being in what appears to be great

shape, and the fact that people are living longer and healthier lives

and the fact that I am pushing 50 and not anxious to retire from

anywhere.

I am just wondering in the legislation or in the rules are there

provisions for that kind of thing? I am just trying to make sure

that those concerns are covered. I have no doubt that there are

people at 57 and 59 and 60 who can do a great job.

Mr. TRAFICANT. My bill calls for certain standards. They must be

able to meet those standards and be tested relative to performance,

both mental and physical. But keep in mind that the current policy

that we are talking of expanding was initiated in 1948 when the

average life span and the impact on health and performance was

nowhere near the times. So we have gone now 50-plus years, 50-

plus years with a system that we continued to maintain for a lot

of reasons that I believe cannot simply be justified.

Our bill calls for these officers must be able to meet the standards of the younger and other employees of the division, and must

be able to perform on the level consistent with that.

Mrs. MINK. I totally agree with that. I am told by those that I

have talked to in this category that they are constantly taking

medical and physical exams to stay qualified, so I don’t tamper

with that requirement at all. And for most of the ones that I have

talked to, they have joined the law enforcement community well before age 37. They were probably 28, 30 years of age when they

started, and can take advantage of early retirement at age 50. So

if there is any problem, mental, physical or otherwise, they are able

to get out at age 50 with 20 years of service, and so that opportunity is left available for these workers who are having difficulty

maintaining themselves. And there are all sorts of medical disability considerations as well.

Mandatory retirement at age 65 even in many jurisdictions for

a wide variety of occupations has been discarded as unconstitutional by the courts. Only for this community we maintain this

very strict requirement that mandates retirement at age 57, even

59

though you are fully qualified mentally, physically and otherwise.

I think that is unfair for those who are able to continue to contribute. I have a long list of those who work in my jurisdiction and the

number of long distance marathon runs they have won and all of

the physical prowess awards they have received because of their incredible physical ability, yet they are all at that age where they are

going to be forced to retire. I think that is a dreadful loss and

comes from an archaic provision that was inserted in the law many

years ago, and should be modified.

Mr. TRAFICANT. Fifty-seven years 1 day and not competent and

mentally unstable; well, 57 years and 1 day, where are we at 56,

364 days? Overnight did we develop incompetent officers? If we

have an unstable officer, man or woman who is physically or mentally impaired before age 57, they should be removed.

An officer that attains the age of 57 that 1 day, certainly those

are grounds and conditions that must be expected, but we have

gone from 1948, we now have a whole different society and a whole

different work force and I think that changes the dynamics of the

whole situation very much.

Mr. CUMMINGS. I think Mr. Filner said it best. A lot of things

make sense. The question is whether we have the will to do them.

I want to thank all of you for what you have said, and we are going

to do our best to come up with a reasonable solution to this problem. Thank you.

Mr. SCARBOROUGH. Thank you, Mr. Cummings. Just quickly, one

last issue. Representative Traficant said that he had fitness standards.

Do you have fitness standards in your bill?

Mrs. MINK. No. I can make a change.

Mr. TRAFICANT. I simply make a change on that day. I don’t

know if we asked for qualifications of firearms, and I might be mistaken. That would be additional language that the committee could

insert, more of an oversight.

Mr. SCARBOROUGH. I certainly appreciate all of your interest in

this. Obviously I see the Capitol Police officers day to day and the

great job that they do.

I understand, Mr. Filner, living out in San Diego you certainly

see day in and day out the great men and women who do such a

great job. We certainly want to do everything that we can. We have

to make sure that we move forward in a way that we can afford,

and also a way that does not discriminate against other people that

are already there. We do not want to force one class of people out

to help another class. It is going to take us all getting together and

walking through it, but I do think that it can be done. We appreciate your taking time out of your busy schedules.

Let us call up the second panel. Hopefully we can get some testimony from our second panel before we have to go vote.

Our next panel includes Mr. William E. Flynn, Associate Director, Retirement and Insurance Services, Office of Personnel Management. OPM has primary responsibility for management of the

Federal retirement systems, and the agency harbors the government’s institutional knowledge about the coverage of this enhanced

retirement benefit.

60

Ms. Kay Frances Dolan, Deputy Assistant Secretary for Human

Resources, Department of the Treasury. Treasury would face the

major effects of these proposals, since more than 16,000 of its employees would gain extended coverage if these bills were enacted.

Our third witness is Mr. John Vail, Deputy Assistant Attorney

General for Management, Department of Justice. DOJ would also

face major work force changes if law enforcement retirement coverage were extended to assistant U.S. attorneys, Immigration Inspectors and DEA Diversion Inspection Investigators.

Welcome all three of you here and thank you for coming to testify.

[Witnesses sworn.]

Mr. SCARBOROUGH. Mr. Flynn, welcome back. I have the feeling

that you are going to say something that somebody agrees with on

our staff because I don’t know if you noticed your introduction, it

says that OPM has primary responsibility and the agency harbors

the government’s institutional knowledge about the coverage of this

enhanced retirement benefits.

Mr. FLYNN. Thank you, Mr. Chairman.

Mr. SCARBOROUGH. I think that is the kindest introduction that

you have ever received. Certainly much kinder than any introduction John Mica ever gave to you.

STATEMENTS OF WILLIAM E. FLYNN, ASSOCIATE DIRECTOR,

RETIREMENT AND INSURANCE SERVICES, OFFICE OF PERSONNEL MANAGEMENT; KAY FRANCES DOLAN, DEPUTY ASSISTANT SECRETARY FOR HUMAN RESOURCES, DEPARTMENT OF THE TREASURY; AND JOHN VAIL, DEPUTY ASSISTANT ATTORNEY GENERAL FOR MANAGEMENT, DEPARTMENT OF JUSTICE

Mr. FLYNN. Thank you very much. Speaking of harboring institutional knowledge, I was listening to the earlier panel, and of course

have read the prepared testimony of others, and was thinking to

myself that knowing what I know today, I sure wish I was around

in 1947 when this thing got started; we might have gotten off on

a different path.

I appreciate the opportunity to be here today to talk about special retirement provisions for law enforcement officers, firefighters

and other special groups. As you know, Federal employees who perform these functions, like Federal employees everywhere, make

many contributions to the Nation’s welfare. As we discuss the desire by some groups to come under the special retirement provisions or otherwise modify them, I think it is important to emphasize that our views on that topic are not intended in any way to

diminish the worth and importance of the contributions made by

those who are seeking an enhanced retirement benefit.

Now, as has been said this morning, Mr. Chairman, special requirement provisions were first enacted in 1947 for special agents

of the FBI, and over the years the provisions have been modified

on a number of occasions. Groups have been added, including

criminal investigators, prison guards, Capitol Police, air traffic controllers and, more recently, nuclear couriers at the DOE. These

provisions exist to make it possible for the government to maintain

the young and vigorous work force in occupations requiring such

61

employees. Special provisions have never been intended to reward

or compensate employees for performing a certain type of work.

In most situations, the most effective way to recognize special

factors associated with work is in the pay setting process itself. In

this regard, it is noteworthy that prior to 1974 the benefit computation for these special groups was only marginally more generous than the regular retirement formula. The more liberal current

formula was only added to the law in order to enable the affected

individuals who were subject to mandatory retirement to retire

without experiencing economic hardship.

Now, for a variety of reasons, the evolution of decisions granting

special retirement coverage has created some situations that appear to have departed from the fundamental human resource management concerns that I have just mentioned. As a result, some

coverage decisions are not always consistent and are regarded in

some cases as inequitable. While attempts have been made to create consistency, even these efforts can in some cases create anomalous results. All of this has contributed to some confusion regarding

eligibility, and that in turn naturally tends to create a situation

where the primary reasons for establishing the provisions in the

first place become further clouded.

Mr. Chairman recognizes this, and you have raised a number of

questions related to those fundamental human resource issues. We

agree that greater attention to these issues is needed. Without fully

analyzing the underlying rationale for granting coverage or otherwise changing the provisions themselves, we run the risk of creating a situation where the government unnecessarily assumes added

benefit costs.

Matters to be considered have already been mentioned: recruitment, retention, physical and mental demands of employment, and

many other factors. While your letter asks a number of questions

in these areas, we do believe that more study and analysis is needed to provide useful answers, particularly in the context of the specific changes you have under consideration.

One more point that I think is important to make, and that is

that once those decisions have been made, we believe that it is essential that funding accompany any of them. It is important that

prospective costs be financed as they are incurred and that provisions be established for the additional costs of benefits resulting

from a change in the treatment of prior service. To create an expense without providing a funding mechanism fails to place responsibility for those costs where they belong and requires them to be

addressed in the future.

The current dynamic normal cost of requirement is 111⁄2 percent

for regular employees under the Federal Retirement System, and

24.6 percent for law enforcement officers, firefighters and others

covered under the special retirement provisions. In the Civil Service Retirement System, the comparable figures are 24.2 percent

and 40 percent.

Now, obviously the rates are higher because of the enhanced benefit structure and earlier eligibility for retirement. Moreover, it is

important to understand that the rates fund only the cost of the

service to which they apply and do not fund credit for prior service.

62

Now, Mr. Chairman, you requested an estimate of what it would

cost to cover all of the groups seeking inclusion today. A few

months ago, our actuary’s office prepared such an estimate. While

some of the underlying assumptions are not quite current, I think

the analysis will satisfy our purposes today. The groups that we

looked at included police, guards, other than those who are currently covered, Inspectors at the Immigration and Naturalization

Service, Customs Inspectors, park rangers, Alcohol, Tobacco and

Firearm Inspectors and a few other groups.

To include such groups with credit for past service would add

about $11⁄2 billion to the underfunded liabilities of the retirement

fund. Now that estimate already takes into account the additional

cost to employing agencies of retirement deductions at the higher

contribution rates. In other words, to bring all of these groups in

would cost $11⁄2 billion plus the future additional employing agency

employee contributions at the higher rates.

I think that pretty well concludes my opening statement, Mr.

Chairman. I would be happy to answer any questions you may

have.

Mr. SCARBOROUGH. Thank you, Mr. Flynn.

[The prepared statement of Mr. Flynn follows:]

63

64

65

66

67

68

69

70

71

72

73

74

75

Mr. SCARBOROUGH. Ms. Dolan.

Ms. DOLAN. Mr. Chairman and members of the subcommittee, I

am pleased to speak concerning H.R. 1228, a bill to extend law enforcement retirement benefits to certain occupations within the

Treasury Department. As you know, the Department is comprised

of 14 bureaus whose missions range from drug interdiction to international finance. The Department is committed to supporting every

occupation in carrying out its mission while managing resources in

a responsible manner. In my position as Chief Human Resources

Executive for the Department, let me assure you that Treasury

management takes a great interest in the welfare of our employees,

and we strive to ensure that employees receive the maximum value

from the available benefits package.

Both the Civil Service Retirement System and the Federal Employees Retirement System provide enhanced retirement benefits

for certain classes of employees, including Federal law enforcement

officers. These special retirement provisions, often known as 6(c)

coverage, allow these classes of employees to retire earlier than

other employees and were created because of a belief that the

strenuous physical requirements of these positions mandate a

young and vigorous work force.

The law also provides for a mandatory retirement age and the

authority of agency heads to set a maximum entry age for appointment. Treasury has a maximum entry age and reentry age of age

37. Law enforcement officers are also granted other benefits such

as higher entry level pay and higher rates of pay in some localities.

The current statute does not specify the positions eligible for this

enhanced retirement benefit. Rather, it defines a law enforcement

officer as someone who primarily investigates, apprehends, or detains individuals suspected or convicted of criminal offenses. For

the most part, this has been defined as positions falling within the

criminal investigator or GS–1811 series.

Of the 127,000 full-time Treasury employees, more than 11,000

are GS–1811s or others covered under the special law enforcement

retirement provisions. H.R. 1228 proposes extending law enforcement retirement benefits to nine specific occupational categories

with Treasury: Customs Inspectors, Customs Canine Enforcement

Officers, Customs Operations Enforcement Officers, Customs Detection System Specialists Airborne, Customs Flight Engineers, Police Officers from the Bureau of Engraving and Printing, Secret

Service Special Officers and IRS Revenue Officers.

There are approximately 16,000 employees in these nine occupations. Under current statute, these occupations are not covered.

H.R. 1228 would change this by expanding these enhanced retirement benefits to a larger number of employees. The administration is in the process of reviewing the complex nature of compensation for law enforcement and, in particular, port of entry inspectors. This review is not yet complete, and therefore we cannot support extending law enforcement coverage at this time.

In addition, extending this coverage has significant budgetary

impact which must be considered in making any determination to

extend these special benefits. Enhanced law enforcement benefits

cost employing agencies and the retirement fund more than regular

employee benefits. In March 1998, the Treasury Office of Inspector

76

General published an analysis of the costs associated with granting

law enforcement retirement benefits to 8,000 Customs Inspectors

and Canine Enforcement Officers. This detailed analysis has been

submitted to the committee for its review.

The annual increased cost for such coverage would be approximately $75 million per year. If retroactive retirement service credit

is granted, that would create an unfunded liability of $538 million.

Again these figures are based on an analysis of approximately

8,000 employees. And since H.R. 1228 covers about 16,000 Treasury employees, we could expect the cost to be roughly double, or

$150 million per year, which will increase over time and create, if

retroactive retirement service credit is granted, an unfunded liability of $1 billion. We haven’t had time between the notice of the

hearing and today’s hearing to do a detailed analysis using the IG

model, but we would be happy to do so and report the cost to the

committee within 45 days.

Simply stated, we don’t have the budgetary resources necessary

to cover these costs. Because of the current statutory spending caps

that were outlined in the 1997 budget agreement, the resources to

pay for extending this coverage would have to be taken from other

areas, and the resulting consequences need to be carefully thought

through. Let me reiterate that the Department fully supports its

work force and I believe this is evident in the caliber of the work

we do and the people we employ.

The current statute established a standard for determining

which positions are eligible. Changes to the statute by including a

broader and more diverse range of occupations will have significant

budgetary impact, with possible related but unintended consequences, requiring careful consideration.

Thank you for the opportunity to appear before you today. I

would be happy to answer any questions you may have.

Mr. SCARBOROUGH. Thank you very much for your testimony.

[The prepared statement of Ms. Dolan follows:]

77

78

79

80

Mr. SCARBOROUGH. Mr. Vail.

Mr. VAIL. Mr. Chairman, thank you for the opportunity to testify

about the Department of Justice’s views on law enforcement retirement coverage for several classes of Department employees. With

respect to H.R. 1228 and Immigration Inspectors, the Department

views this legislation as part of an overall effort to ensure that

Federal employees in border control positions with similar duties

receive equivalent pay and other benefits. While we understand

that this is an area of significant interest to Immigration Inspectors and the Immigration and Naturalization Service, it is also a

complex issue that requires detailed planning and coordination

among Federal agencies. As a result, the administration is studying the issue of parity in pay and benefits, and further work will

be required before all of the policy questions raised by this matter

can be resolved. Until that time, the Department cannot endorse

amending title 5 to provide law enforcement retirement coverage to

Immigration Inspectors.

The DEA Diversion Investigators play a vital role in the Nation’s

antidrug efforts by conducting regulatory investigations to detect

the diversion of legal, controlled substances into the illicit drug

markets. However, it is our view that they do not perform front

line law enforcement duties, and the Department cannot support

extending law enforcement retirement coverage to Diversion Investigators. They do not carry weapons or have the authority to execute arrest search warrants. They do not conduct surveillance or

undercover work of any kind and they are not required to maintain

a high level of physical fitness.

Like my colleagues, I am also concerned about the fiscal impacts

of extending law enforcement coverage to this class of employees.

We estimate that it would cost the Department about $2.8 million

in fiscal year 2000 to prospectively implement law enforcement coverage, while retroactive law enforcement coverage would cost more

than $30 million. We have not requested and do not anticipate

funding for these potential obligations in the Department’s fiscal

year 2000 budget, and for these reasons we cannot endorse law enforcement retirement coverage for Diversion Investigators.

With respect to H.R. 583, the Department recognizes that assistant U.S. attorneys are hardworking, dedicated employees whose

jobs are increasingly demanding and sometimes dangerous. Indeed,

some assistant U.S. attorneys have received threats against their

lives and against their families. We appreciate that some assistant

U.S. attorneys confront greater risk in their jobs than other lawyers in the Department or elsewhere in the government.

However, we do not believe that law enforcement retirement coverage is appropriate for assistant U.S. attorneys. As counsel for the

United States, they do not perform the kind of front line law enforcement duties anticipated by the statute. Assistant U.S. attorneys do not carry weapons as part of their duties. They do not have

the authority to execute arrest or search warrants or conduct surveillance work and they are not required to maintain any level of

physical fitness. Furthermore, the law enforcement coverage for assistant U.S. attorneys could significantly alter our work force. Current law enforcement retirement provisions would require the immediate mandatory retirement of more than 80 seasoned assistant

81

U.S. attorneys, and would give more than 400 the opportunity to

retire on an immediate annuity, resulting in the potential loss of

more than 500 highly skilled assistants. Applying physical standards could deprive the Department and the United States of the

outstanding services of assistant U.S. attorneys and applicants

with physical disabilities.

Finally, law enforcement coverage for assistant U.S. attorneys

would be costly. The proposal in H.R. 583 would cost the U.S. attorneys’ appropriation more than one-half billion in the first year,

$300 million to pay retroactive employer and employee contributions to the requirement system as required by section 3(e)(2) of

the bill, $220 million in interest, and $60 million for the first annual agency contribution; the last, a cost which would recur every

year. For these reasons, we cannot endorse law enforcement coverage for assistant U.S. attorneys.

In conclusion, I thank the subcommittee for giving the Department of Justice the opportunity to testify on this matter, and I will

be happy to answer any questions you may have.

Mr. SCARBOROUGH. Thank you for your testimony.

[The prepared statement of Mr. Vail follows:]

82

83

84

85

86

87

88

89

90

91

Mr. SCARBOROUGH. Let me start with some questions regarding

some data that OPM has given us. They have given us considerable

data on the occupations that are covered by these proposals before

us.

The data that they have given us show few difficulties in hiring

of these categories, lower than average rate of attrition, and minor

movement from occupations not covered by the enhanced retirement benefit to the jobs that are covered.

So I guess my question is: In your studies do you find that your

agencies have difficulty recruiting and retaining employees in the

employment classifications that are being proposed for enhanced

retirement benefits? Do you see that there is a serious problem

that needs to be addressed?

Mr. VAIL. I will be happy to answer, Mr. Chairman.

In the Department of Justice, as a general rule we have very little difficulty in recruiting for assistant U.S. attorneys, and I don’t

believe that there is any difficulty in recruiting for Diversion Investigators within the Drug Enforcement Administration.

There were certain data, or allusions were made in earlier testimony to the loss of Immigration Inspectors to other occupations,

and indeed that is a fact. I think we are fortunate that most of

those losses are within the Department and within the Immigration and Naturalization Service, but it certainly is true that there

are some Immigration Inspectors who want to leave that occupation because of the absence of this benefit.

But at this point, as I say, while Department leadership has been

supportive of law enforcement coverage for Immigration Inspectors,

we recognize the need to deal with Treasury and other agencies

which have border enforcement personnel and we simply cannot set

the cost factors aside.

Ms. DOLAN. From the standpoint of Treasury, there might be one

or two exceptions among the 9 occupations, but in general these occupations would not be characterized as ones that are particularly

difficult to recruit for, nor that have unusual retention problems.

Mr. SCARBOROUGH. Mr. Flynn.

Mr. FLYNN. I think, Mr. Chairman, we have provided the aggregate information, and the testimony of the two witnesses, I think,

breaks that down a little bit and makes it more understandable.

Mr. SCARBOROUGH. You have testified that granting law enforcement retirement to various groups would be very costly. Mr. Flynn

and Ms. Dolan have estimated that it would exceed $1 billion. Ms.

Dolan, the subcommittee accepts your offer to provide a more detailed estimate. It will be helpful to have that, and so we will leave

the record open 45 days for you to forward that to us.

What kind of impact would the costs have on Federal personnel

generally, and in the Treasury and Justice Departments in particular?

Mr. VAIL. I would like to address the issue of coverage for assistant U.S. attorneys. We have indicated the one time cost of providing the retroactive benefit that this bill would provide is I think in

the neighborhood of $600 million. That is approximately half of the

appropriation for the U.S. attorneys in any given year.

The additional benefit would also require ongoing costs. Our

first-year estimate for additional contributions of approximately

92

$60 million, which would have a significant effect on the ability of

the U.S. attorneys to carry out their operations.

The Diversion Investigator impact, because Diversion Investigators represent a much smaller portion of the Drug Enforcement Administration, would be a less dramatic cost but certainly a concern.

And as I have indicated, we are in the process of studying, along

with the Department of Treasury and OMB, the impact of the cost

of extending retirement coverage to Immigration Inspectors.

Ms. DOLAN. From Treasury’s perspective, as Mr. Vail said, we

are engaged in a study right now to look at the compensation package particularly for the Inspectors. The largest cost clearly is in the

unfunded liability. We have not had discussions about how that

cost might be met. The annual cost is also large and we have not

identified the necessary offsets, as I testified, for that. So the costs

are considerable and that is part of the review that we are engaged

in.

Mr. SCARBOROUGH. Mr. Vail, did you say that the $600 million

that this would cost is half of what your annual appropriation is?

Mr. VAIL. For the U.S. attorneys, that is correct.

Mr. SCARBOROUGH. That is quite a mountain to climb.

Mr. VAIL. That is the one-time cost for providing retroactive coverage as the bill requires.

Mr. SCARBOROUGH. Right. All right. A few months ago at a legislative hearing that we had for a bill to improve participation in the

Thrift Savings Plan—we had to include provisions to offset some

mandatory cost effects—and the cost of that bill over 5 years was

only a total of $35 million governmentwide. That is $35 million

spread out over 5 years covering all agencies. At the time, employees unions argued that it would cause RIFs. If you want to use that

sort of logic, let me ask you by their logic how many RIFs would

be caused by the proposals that we have discussed today?

Mr. VAIL. I don’t know that we can provide an answer, Mr.

Chairman. There are any number of tools, if an agency had to absorb a cost like this, that the agency would look at in terms of absorbing $60 million or $2 million or whatever the effect on the individual appropriation was.

Personnel reductions would be one of those. There would be other

areas that the agencies would have to look at as well.

Mr. SCARBOROUGH. Ms. Dolan.

Ms. DOLAN. A reduction in force would certainly not be a route

that Treasury would want to embark on. The costs of a reduction

in force I know have been studied by GAO very recently and they

say you can actually end up spending more than you save. So a reduction in force is very, very disruptive, and you have to lose more

people than you need to in the short run in order to make longterm savings.

Mr. SCARBOROUGH. If the employees unions stood up and

screamed about $35 million spread over 5 years over all agencies,

and that was something that they opposed, I find it interesting

that they are supporting these proposals that will, if fully implemented, cost over $1 billion and will be devastating. And don’t tell

me that it is not going to cause a lot of RIFs because it is if it happens. There will be winners in these proposals, but there will defiVerDate 11-MAY-2000 11:49 Jul 28, 2000 Jkt 000000 PO 00000 Frm 00096 Fmt 6633 Sfmt 6633 C:\DOCS\64649.TXT HGOVREF1 PsN: HGOVREF1
93

nitely be losers unless we decide to spend an awful lot more money

over the coming years.

Let me ask one final question and then turn it over to Mr.

Cummings.

Each of you have said that the question who should be covered

by law enforcement coverage is a complex one that is being reviewed right now by the administration. When did the administration begin the review, and when will it be completed? What is your

agency’s role in that review and what factors are you analyzing in

the study?

Ms. DOLAN. We were just looking at each other trying to remember when it started.

Mr. SCARBOROUGH. 1947.

Ms. DOLAN. The current one. About a year ago?

Mr. VAIL. Yes. We have been involved, to the best of my recollection, since the last appropriation cycle, Mr. Chairman, and have

been working particularly with respect to the issue of Immigration

Inspectors. Our review has not included Diversion Investigators or

assistant U.S. attorneys. Those are not classes of employees that

we have considered as potentially subject to the retirement coverage.

In terms of the potential timing of the outcome, I don’t think that

I can answer the question, I am sorry.

Ms. DOLAN. Yes, I think we would need to defer to OMB as to

when it will be completed.

Mr. SCARBOROUGH. OPM, when will it be completed?

Mr. FLYNN. I think Ms. Dolan’s reference is to OMB, an organization I cannot speak for. I would simply add, Mr. Chairman, that

in addition to the occupations that are under consideration at both

Treasury and the Department of Justice, a number of other agencies employ individuals who have sought this or similar kinds of

treatment for groups of their employees that we are engaged in discussions with as well.

These are important issues. It is interesting. Each occupation

presents its own set of considerations and concerns. Likewise, I

can’t tell you when we will complete that, but we are working with

the individual agencies with an eye toward reaching some resolution of this matter that works.

Mr. SCARBOROUGH. Thank you. Mr. Cummings.

Mr. CUMMINGS. Mr. Flynn, give me your opinion on this 57 age

increase with regard to mandatory retirement.

Mr. FLYNN. Thank you, Mr. Cummings, for asking. It was stated

by the early panel that mandatory retirement age at 57 came about

in 1947 or 1948. It was actually in 1974, if I have this correctly.

So that mandatory retirement age, while it is now 20 some years

ago, is not 50-some years as you may have come to the conclusion

from listening to the earlier testimony.

This is one of these very complex areas. If you think about the

fundamental underpinning for the basis for this type of enhanced

retirement coverage, young, vigorous, relatively healthy, mentally

and physically agile work force, and the fact that the higher retirement accrual rates are there precisely for the purpose of making

sure that people have income security in their retirement years, albeit they retire sooner than others, to then come back and today

94

look at the mandatory retirement age and suggest that it should

be limited altogether, raised, what have you, a lot of different proposals, begins to question that very foundation that underlies the

retirement credit in the first place. That is what makes this issue

so complicated and complex.

I think that is just one of the factors that we are going to have

to take into consideration, but the raising of the minimum retirement age, with the single exception perhaps of aligning the mandatory retirement age for firefighters with the general retirement age

of 57 for others, is something that is quite complicated and will

take more study.

Mr. CUMMINGS. If you can change one aspect of the current retirement benefit, what would that be?

Mr. FLYNN. Well, I think, Mr. Cummings, one of the things that

has proved especially difficult in the evolution of retirement coverage with this particular type of situation is the fact that over the

years, unlike position classification decisions that are made in

terms of grade levels that also control compensation, there has

been a tendency to regard retirement coverage as a matter of entitlement that is subject to external appeal and even review under

the Federal courts.

If you think of this for a moment, that what we were trying to

do in 1947 and throughout has been to make the right human resource decision with respect to a group of individuals aligned with

what an agency is trying to do strategically in terms of the work

of the Nation, I think you begin to regard this as first a human

resource decision that can and should be made administratively.

Part of the difficulty that I think we have seen over the years

has been the evolution of this into an issue of entitlement rather

than an issue of how organizations get their jobs done well and

compensate their people fairly. So that is probably the area of

change, if I were back in 1947, I might offer a few suggestions on.

Mr. CUMMINGS. Back in 1993 when the Post Office and Civil

Service Committee held a hearing on OPM’s recommendations for

new pay and job evaluation for Federal law enforcement folks, were

any of those recommendations implemented?

Mr. FLYNN. If you don’t mind, Mr. Cummings, I will have to go

back and respond to that for the record. This predates my arrival

in this area and I am sure that we have a good answer for that,

but if you don’t mind I would like to check on that.

Mr. CUMMINGS. No problem. Thank you.

Mr. SCARBOROUGH. Thank you, Mr. Cummings. We certainly appreciate you three testifying, and you certainly have given us some

insight regarding the difficulties we face. Thank you, and we will

be in recess until after the vote.

[Recess.]

Mr. SCARBOROUGH. We will begin the third panel now, and on

the third panel we have Ms. Colleen Kelley who is newly elected

national president of the National Treasury Employees Union, her

organization represents many of the employees who are seeking the

enhanced retirement coverage. She will be followed by Mr. Gilbert

Gallegos, national president of the Fraternal Order of Police, and

Mr. Peter J. Ferrara, chief economist, Americans for Tax Reform,

an organization concerned about public expenditures at all levels.

95

As with all of our hearings, the record will remain open for 2

weeks to provide the submission of additional comments. Let me

ask if our panelists will rise and take the oath.

[Witnesses sworn.]

Mr. SCARBOROUGH. Ms. Kelley, we will begin with you.

STATEMENTS OF COLLEEN M. KELLEY, NATIONAL PRESIDENT,

NATIONAL TREASURY EMPLOYEES UNION; PETER J. FERRARA, CHIEF ECONOMIST, AMERICANS FOR TAX REFORM;

AND GILBERT G. GALLEGOS, NATIONAL PRESIDENT, FRATERNAL ORDER OF POLICE

Ms. KELLEY. Thank you. Chairman Scarborough, my name is

Colleen Kelley, and as you mentioned I am the newly elected national president of the National Treasury Employees Union. I was

elected in August and I am very pleased that my first appearance

in Congress is before your subcommittee to offer NTEU’s strong

support for 20-year retirement for U.S. Customs Inspectors and Canine Enforcement Officers as well as Revenue Officers of the IRS.

These men and women put themselves in harm’s way every day to

uphold the laws passed by Congress. They are subject to the same

perils, meet the same rigorous job standards and rely on the same

investigative skills and techniques as other law enforcement officers who enjoy the significant benefits of law enforcement retirement, yet they do not receive these benefits. Common sense and

simple justice demand an end to this inequity.

I know that Congressman Filner already introduced Customs Inspector Robert Labrada, but I would like to again recognize him

and his fellow Inspector, Nicholas Lira, who were victims of a violent gun attack in April 1997. The horrifying scene of their attack

was captured on the surveillance cameras at the Calexico port that

day.

I have provided each subcommittee member with a video copy of

the tape from that day. I urge each of you to watch the videotape

and to ask yourself whether you think that Inspectors Labrada and

Lira should be denied the benefits that other law enforcement officers enjoy. I ask the committee to ask what Congressman Filner

already did. The irony, if Inspector Labrada had been killed that

day in April 1997, his name would have been added to the wall at

the National Law Enforcement Memorial here in Washington, DC.

He would have been added as a Federal law enforcement officer

who was slain in the line of duty. But in life he is denied the title

and the benefits that befit that job.

Customs Inspectors and CEOs, Canine Enforcement Officers,

make up our Nation’s first line of defense on the war on drugs. The

Customs Service continues to seize more illegal narcotics than any

other Federal agencies combined, and Inspectors and CEOs seize

more than any Customs employees. They are required to undergo

training at the Federal Law Enforcement Training Center, where

they must learn criminal law, arrest authority and techniques, selfdefense tactics, frisk and pat down procedures, handcuffing and

takedown techniques, antiterrorism and firearms use.

Inspectors carry guns and are required to qualify on the firing

range three times a year. In the course of fighting the war on

drugs, these men and women have been shot at, beaten, kicked and

96

dragged behind cars. Sadly, 23 Customs Inspectors have been

killed in the line of duty. Customs Commissioner Raymond Kelly

recognizes the dedication of Customs Inspectors and CEOs, and he

told me just yesterday that he personally supports law enforcement

status for these dedicated men and women.

The job of the IRS Revenue Officer is also one of the most hazardous in the Federal Government. Revenue Officers are required

to call on delinquent taxpayers from crime-ridden city neighborhoods to remote and isolated rural areas. They have been held hostage, attacked by dogs, hit by cars, threatened with guns and

knives, tire irons and bombs. Delinquent taxpayers are sometimes

in very desperate financial or legal trouble. The neighbors and families of delinquent taxpayers have also threatened to shoot Revenue

Officers if they don’t leave the premises.

Revenue Officers must collect from drug dealers, organized crime

figures and tax protesters. Many of these groups advocate violence

against the IRS. One RO told me about the time he visited a taxpayer’s home and saw a sign in the window that read ‘‘IRS personnel shot on sight.’’

All revenue officers can tell you about the times that they feared

for their lives. In 1997 we asked ROs to describe these experiences.

I would like the subcommittee’s permission to have some of these

responses included in the record. I have a package of these here,

if I can do that.

Mr. SCARBOROUGH. Without objection, that is fine.

[The information referred to follows:]

97

98

99

100

101

102

103

104

105

106

107

108

109

110

111

112

113

114

115

116

117

118

119

120

121

122

123

124

125

126

127

128

129

130

131

132

133

134

Ms. KELLEY. Thank you. They are truly indicative of he magnitude of physical danger that Revenue Officers are exposed to

every day on the job. The adversarial nature of the Revenue Officer/delinquent taxpayer relationship means that danger and confrontation are part of their daily routine. These stresses can be exacerbated with age and lead to physical problems including high

blood pressure, insomnia, depression and even suicide. The nature

and hazards of these jobs clearly support a 20-year retirement benefit for revenue officers.

When law enforcement officers from different agencies join forces

on a drug raid or search a boat for armed smugglers, Customs Inspectors and CEOs are often the only officers on the scene who are

not eligible for law enforcement retirement. They are haunted by

the same risk of death or injury, but when it comes to inferior benefits, the Customs Inspectors and CEOs stand-alone.

Revenue Officers of the IRS are subjected to the same gross inequities when they join with law officers from other Federal agencies and their State and local counterparts on dangerous and risky

operations. These dedicated men and women are united by the violence and the threats that they bravely endure. But when it comes

to retirement benefits, the revenue officers go to the back of the

line.

I ask this subcommittee to consider the sacrifices that Inspector

Labrada and thousands of others like him have made to enforce the

laws of our country and to provide them with the benefits that they

deserve by passing H.R. 1228. Thank you very much.

Mr. SCARBOROUGH. Thank you Ms. Kelley.

[The prepared statement of Ms. Kelley follows:]

135

136

137

138

139

140

141

142

143

144

145

146

147

148

149

150

151

152

Mr. SCARBOROUGH. Mr. Gallegos.

Mr. GALLEGOS. Thank you, Mr. Chairman. My name is Gilbert

Gallegos and I am the national president of the Fraternal Order of

Police; and with more than 283,000 members, we are the largest

organization of law enforcement professionals in the Nation. I am

here to bring to your attention the concerns of the more than

25,000 Federal officers who are members of our organization regarding the issue of law enforcement retirement.

The issue of who is and who is not a law enforcement officer for

retirement purposes is a source of great confusion for the tens of

thousands of police officers employed by the Federal Government.

For them, law enforcement status is not about bigger paychecks or

enhanced benefits but about achieving parity with their fellow officers. And it was interesting to be here earlier when I heard the administration bureaucrats talk about further study, and I urge what

we need is not further study but action on H.R. 1228. That is what

we really need.

I also serve as a commissioner on the Commission for the Advancement of Federal Law Enforcement. I am not speaking today

on behalf of the Commission, but in the last 2 years of the study

that we have been doing that will be reported at the end of the

month to Congress, I have never in my life seen such a mishmash

of how police agencies operate as in the Federal Government. I

come from the local agency, and if we operated in this way, we

would be out of business. And I think it is all about parity.

In a local law enforcement agency like Pensacola or Tallahassee,

the backbone of those departments are the uniformed police officers. If you have any chief of police with any integrity, they will

tell you that the backbone of their Department is the front line uniformed officer. That is the way that I was taught, and I have always thought that way. In the Federal system we treat them differently. And I think it is the reverse.

I think we have to do something, and H.R. 1228 is the first step

to deal with that and ensure that these uniformed officers are

treated fairly. We know that the problems exist. We know that

there is an increase in both domestic and international terrorism

and that there are definite threats to the employees of the Federal

Government and its facilities. We also know that the uniformed officer is the first line of defense to protect employees in the facilities

of the Federal Government.

I am not here to argue that security guards should be entitled

to 20-year retirement, but they are not viewed as law enforcement

and they don’t meet the definition of a law enforcement officer.

That means the people who make arrests, have the authority to

make arrests, conduct investigations, wear a uniform and can take

action. That is the difference between a law enforcement officer

and a security guard.

The majority of the officers who do not receive law enforcement

officer status are GS–083’s in the executive branch of the Federal

Officer System.

The way that I look at it is if you look at a Pensacola police officer, whether he is a uniformed officer or a school resource officer

or an investigator, each position has the same retirement. They are

not treated any differently. You go to any State or local agency and

153

it is the same way. I think that is really the problem with the system that we have within the Federal Government.

The duties that we have talked about—the right to make an arrest, carry firearms, advise suspects of the Miranda rights, conduct

criminal investigations—does not take into account the full scope

of what the uniformed officers’ job is all about. Customs Inspectors

and Immigration Inspectors have also consistently been denied the

additional retirement benefit. It is time that this changes, because

the duties that a Federal uniformed officer performs, is the same

as what 99 percent of the law enforcement officers do at the local

level all across the country; but yet, Federal officers are treated differently.

The OPM bureaucrats talked about a study completed in 1993,

and a subsequent plan to establish a new pay and job evaluation

system for Federal law enforcement officers. That is why I say it

is not time to study, it is time to act. And that is what we would

try to encourage you, Mr. Chairman, to do.

The Merit Systems Protection Board has been extremely active

in deciding on a case-by-case basis as to what qualifies an employee for enforcement officer and retirement status. If the present

situation stays in place, as some people have advocated, you are

going to see more and more cases going to the Merit Systems Protection Board. Already in California and in Virginia, the Board has

ruled against the different agencies and said you have to give these

officers 20-year retirement. If Congressman Filner’s legislation does

not become law, you are going to see more and more such appeals.

We also heard about cost this morning, and I challenge the Congress to really set aside this issue and consider the importance of

public safety. I think that is the fundamental question: Do we want

qualified officers, officers who are physically fit, officers who can at

age 60 perform the same job as when they were age 30? And, believe me, I have been a cop since 1964. I am 55 years old, and I

cannot do the same things I could as a 25-, 30-year-old police officer, and I challenge any Federal officer to say otherwise.

What they can say is ‘‘extend the mandatory retirement age and

we can still do the job,’’ and I challenge that because I don’t believe

it. I know in my own case I cannot do the same job as I did as a

young patrol officer. It is a young person’s profession. It has to be

kept that way, and everyone has to be treated the same. And unfortunately under this system, we don’t treat everyone the same.

I agree with what was said earlier when Congressman Traficant

said certain people apply for exceptions to the rule at age 57 retirement. Some get it and some don’t. I think that something has to

be done to make it equitable, and I think that is the challenge for

this subcommittee, to make sure that everyone is treated equitably

and that is what I would implore you to do.

In the end, I think it comes down to the tradeoff of do we want

a professional law enforcement group of uniformed officers or do we

want security guards. And I think the American people and you in

the Congress, and in the administration, want professional law enforcement officers, so we have to set aside the cost. And if agencies

are unable to fill their staffing levels, I say that is poor planning,

because if State and local agencies can do it, I am sure that the

Federal system can.

154

The Department that I came from, we knew 2 to 3 years ahead

of time how many people we had to plan for in retirement and how

many we had to hire to replace those officers. State and local agencies do it all the time. Why can’t the Federal Government? I don’t

think that the will has been there. Now we have to pass H.R. 1228,

and I think that will be a big step in providing equity to the uniformed officers who are really the backbone of the Federal law enforcement system. Thank you.

Mr. SCARBOROUGH. Thank you, Mr. Gallegos, for your persuasive

testimony.

[The prepared statement of Mr. Gallegos follows:]

155

156

157

158

159

160

161

162

163

164

165

166

Mr. SCARBOROUGH. We will now see if Mr. Ferrara is so persuaded to set aside the cost issue.

Mr. FERRARA. Thank you, Mr. Chairman. Let me focus on a couple of points. Ms. Kelley focused on the point that the people she

would like to expand the benefits to are, ‘‘subject to the same perils

as other law enforcement officers.’’

Well, in panel 2, the agencies themselves testified that is not the

case. They said that in each case the people they wanted to expand

the benefits to do not have the same front line law enforcement responsibilities that these benefits were designed for. They don’t

carry weapons and don’t apprehend criminals, et cetera. The agency said they are not subject to the same perils as other law enforcement officers. And that completely displaces the parity issue. It is

not the same job and therefore it is not the same—the same benefits should not apply.

Despite all of the issues raised by Ms. Kelley, the agencies also

testified there is not an employment problem. They don’t have

problems filling the positions or retaining workers. And if there is

not an employment problem, then from the perspective of taxpayers, it would be totally illegitimate to expand the pay and benefits further. We should not pay more than necessary to recruit the

qualified personnel to fulfill these positions, and the agencies say

with the current pay and benefits, they are achieving that goal and

therefore it would be a waste of taxpayer funds to throw additional

benefits on top of what is already being spent.

So it is not an issue, as Mr. Gallegos says, do we want professional law enforcement agents or not. We already have a professional law enforcement force that is performing the job quite well

at the current pay and benefits. He argued that we should set

aside cost and focus on public safety. We are already achieving the

public safety goals with the current pay and benefits. So it would

be a waste of hard-earned taxpayer dollars to throw additional pay

and benefits on top of what we are already paying that are achieving the goal.

Another point I would like to raise is let’s add into this discussion the fact that there is life after government employment. People who retire after 20 years, they go to work in the private sector.

A perfect example is an assistant U.S. attorney. A U.S. attorney

works for 20 years and retires from his Federal employment. He

would be getting Federal employee retirement, and he goes to work

for a private law firm based on all of the experience he had for 20

years as assistant U.S. attorney, making much more than he ever

did as assistant U.S. attorney, and then he is getting taxpayerfunded retirement benefits on top of that pay? I would submit that

falls into the category of waste, fraud and abuse that we have

talked about as the kind of spending that should be eliminated.

The same is true of other Federal employees. They gain expertise

as Customs Inspectors and Revenue Officers and they go out in the

private sector and utilize that expertise to earn even more. And the

idea that the taxpayer should be paying benefits to these people

who are still working and still earning good pay in the private sector is completely unjustifiable.

So we would argue that—we strongly oppose this legislation and

we strongly oppose expanding these benefits further. In fact, we

167

suggest that in any study being conducted, we need to study the

issue of what people do after they leave Federal employment in

these occupations. Do they leave Federal employment after 20

years and find that they cannot work? Or do they leave Federal

employment after 20 years and then find that they are gaining better jobs in the private sector? I would submit that study would

show again that this kind of pay is unnecessary.

I also want to bring up and focus on the point that these workers

already have generous benefits in retirement. It is not like these

workers have demanding jobs and are left bereft in retirement. We

already have a more than adequate retirement system for these

workers.

My final point is that the Federal Treasury Employees Union in

their written testimony suggested that we should forego the tax cut

that the Congress recently passed and instead use the money for

higher pay and benefits for the employees they represent.

I would submit that this proposed legislation is in fact a good argument for a tax cut. It shows if we don’t cut taxes, a long line of

special interests will come before Congress with plenty of plans to

spend the money. It shows the urgency to get this money out of

Washington and get it back to the taxpayers where it belongs before it is spent on wasteful special interest spending. Thank you

very much.

Mr. SCARBOROUGH. Thank you for your subtle remarks, Mr. Ferrara.

Mr. FERRARA. That is my job.

Mr. SCARBOROUGH. That is your job, and you are doing it well.

[The prepared statement of Mr. Ferrara follows:]

168

169

170

Mr. SCARBOROUGH. Ms. Kelley, let me ask you to touch on a couple of points, and that is the testimony of the agencies of the employees that you represent so well.

What do you say to those agencies whose main argument is that

they are not having problems in recruitment, they are not having

any problems retaining employees that you represent. What is your

counter to that?

Ms. KELLEY. One, as far as the U.S. Customs Service goes, they

currently have a work group looking at recruitment and retention,

I believe, because they recognize that there is a problem. Perhaps

it is not as large a problem today as it may be tomorrow, but one

of the reasons that they are looking at this is because in the last

5 years there have been over 3,000 Customs Inspectors hired. And

what we are hearing anecdotally is that the new Customs Inspectors that are being hired at the younger ages are not staying with

the Customs Service. They are going to State and local law enforcement agencies where the 20-year retirement is available.

While there is no study, I would encourage that the Customs

Service start tracking this issue very closely.

I would just make another comment. I unfortunately missed the

testimony of the second panel, but I would be shocked to hear that

the Customs Service said that the Customs Inspectors and CEOs

do not carry weapons. Every one of them does.

Mr. SCARBOROUGH. I want to underline a point that you made

earlier about IRS agents. I have heard from many, many IRS

agents that even work in offices, that don’t go out in the field, that

they certainly do fear for their lives at times. It is obviously something that again we need to address and some issue. I guess the

main problem today—and I certainly understand, Mr. Gallegos,

your statement about let’s worry about security first and cost later,

but regrettably this year as we move toward adjournment, we are

obviously up against some tremendous pressures regarding costs.

If the costs associated with these benefits were imposed on the

agencies—they have testified that other functions would have to be

cut back and perhaps fewer people would be hired in the favored

employment categories or the measures could result in RIFs from

the current work force levels—what effects do you anticipate for

the increase in benefits that you have supported in your testimony

today regarding RIFs or what other areas of the agencies that you

represent would have to be slashed, Mr. Gallegos?

Mr. GALLEGOS. What I have seen in my experience in my own

agency in New Mexico when we had a similar situation, they redcircled different employees so that they were not put into RIF status—and that could easily be done with this type of legislation—

the people on the cusp, so to speak, who are in the position of having to leave or whatever status they are in, that there could be special provisions to account for those until through attrition and normal retirements they can catch up.

I think it is a challenge, and quite frankly my personal opinion

on the position of Congress and with the moneys is that you have

painted yourself into a corner by the ceiling levels that you have

set. I don’t think that they are realistic, but I understand your position on that and the position of Congress, and I think that is a

171

separate issue. But I do think that it is going to cause a ripple effect on down the line.

The last point I want to make is what was testified regarding attrition and the ability to hire people. It all depends who you talk

to. I talk to the officers, front line supervisors, commanders, I talk

to SACs of different agencies. You talk to them and you talk to the

head of Customs or the head of DEA or the Bureau of Engraving

Police, you get a totally different picture. And they are in fact—

what they tell me is that they are having a hard time hiring people

and maintaining the manpower levels that are required. It all depends on who you talk to. If you talk to the bureaucrats, they will

tell you one thing, and if you talk to the front line people, they will

tell you the real story.

Ms. KELLEY. We realize, Mr. Chairman, there is a cost attached

to this. We do have some questions about the methodologies used

by OPM to date and by those who testified in the second panel. We

would join with Congressman Filner and offer to work with the

subcommittee on what the appropriate costs would be and how

they could be funded, because I would like to clarify that my testimony does not suggest that all of the tax cuts be foregone and used

for this issue.

What we did suggest was that a very small piece of it would be

a wise investment for the country and what we would hope is that

while these issues are surely connected, that first the decision

would be made based on the merits of whether these men and

women should have law enforcement status, and then to jointly

work together to find the means within the budget and without

causing RIFs to make that happen. So we see that as two pieces,

but we worry that the decision is being made solely on money and

that the merit issue is not being fully discussed and decided and

that is what we would ask.

Mr. SCARBOROUGH. Mr. Ferrara, any comments on this issue?

Mr. FERRARA. Well, the bottom line is that there is a market test

here for government employment: Can you attract the workers or

not? And if—as an advocate of taxpayers, I don’t want to see the

government pay any more in pay and benefits than necessary to fill

the jobs. I don’t want to see any sort of employment crisis be manufactured to justify these additional benefits. Once it is clear that

you can attract these workers, there is no justification for higher

spending.

A point that I would like to add is that the best way to address

the problem that officers face is tax reform, and maybe Congress

ought to get on with that, different types of tax codes which would

not require the same level of enforcement burden that this one

does.

Mr. SCARBOROUGH. God bless you, man. A lot more people talked

like you in 1994. He is a blast from the past, ain’t he?

Mr. FERRARA. And the future.

Mr. SCARBOROUGH. I had a lot of friends who spoke like you a

few years ago. I don’t know where they went.

Mr. FERRARA. They work for us now.

Mr. SCARBOROUGH. After they got defeated in 1996 and 1998.

Mr. FERRARA. Let me write that down.

172

Mr. SCARBOROUGH. A couple of months ago, we tried to do some

things regarding Thrift Savings Accounts, and the total cost was

something like $35 million spread out over 5 years, very small compared to the one-time cost of possibly $600 million or over $1 billion.

The argument then by the unions was that could not be allowed

because it would cause massive RIFs in the system.

What I would like you to help square up for me today is how employees unions could take that stance a couple of months ago, saying if we cut $35 million, it is going to cause all of these RIFs. And

yet we have costs that may run over $1 billion, and the argument

now is that possibly no RIFs will be caused. Is it possible to square

those two arguments up?

Ms. KELLEY. Mr. Chairman, I think that with work and with

time, that it is possible. I was not here a few months ago to address the specific issue that you are referring to, but I think there

are options available. There are surely ways to look at if it were

to be determined that less employees were needed, not just from

a cost standpoint, attrition, a long-term plan rather than an immediate reaction is one way to accomplish that.

Another is to look at a proposal that law enforcement status and

the costs associated with it—because as we all know you can do

numbers a variety of ways and come up with a variety of conclusions. There are ways to phase in the cost. The current bill does

suggest retroactivity and it raises the whole question of the unfunded liability. We would like to work with OPM on the numbers,

and the subcommittee, and determine if there is a 5- or 10-year

plan to look at this.

Mr. SCARBOROUGH. Let me tell you, just like I told the first panel

and like I said earlier, we will be glad to sit down and talk about

what options are possible and look forward to working with all of

you as we move forward.

Let’s talk about the question, the issue that Mr. Ferrara brought

up in his last statement regarding whether this crisis regarding

hiring and retaining and retention is actual or manufactured.

Again your agencies have said that it is not an actual crisis, and

we talked about this before. You talked about people on the front

line telling you that there were problems with retention. Do you

have any evidence, any studies that you can bring to the committee

in the next 2 to 3 weeks that we can make as part of the record

that would show that you are having problems recruiting or retaining people in any of these areas?

Mr. GALLEGOS. We can provide you that information from the

FOP.

Again, the real question comes up as to how you set up a sensible level of staffing, and how you are going to keep that up and

how you plan for the future. That is really what any law enforcement agency does. Through proper planning, which I don’t think

that they have done at the Federal level, I think you can address

that.

The other thing, and I agree, I think you can hire anybody. I

think you can go out on the street and hire a bunch of people, and

if you just want to fill the slots, you get one quality of people. However, if you want to have highly professional people like we have

173

in the Capitol Police, you have to go after the best people available

to fill those positions.

State and local agencies are having the same problem. A lot of

local agencies are now requiring college degrees. I know that in my

agency, that is required. We are having a hard time. We are having

to compete with industry to bring in qualified people, and I think

that is what really the Federal Government has to do. They have

got to come into focus on how are they going to attract the best

people, and you do it just like the private sector does. They have

attractive packages.

You are providing a quality service now. I think the uniformed

officers do that now. The FBI, DEA, everybody else does. I think

that we can continue that. But we have got to look at really what

is facing us ahead.

Mr. SCARBOROUGH. So is your view today, as you testify before

this committee, that based on the current facts that we have, that

we do have qualified law enforcement officers across the broad

spectrum of the government, or are you concerned that the quality

is slipping now because you don’t think that the benefits package

is attractive enough?

Mr. GALLEGOS. I have talked to high-ranking officials in various

agencies who believe that; that it is starting to slip. I think when

you are competing against the IBMs and the Intels and everybody

else, I think we have to focus on how are you going to keep the

people you have and attract new people. It is not a matter of just

filling the slots with people who are security guards and can stand

at a post and let people in or out or whatever. These are qualified

law enforcement officers and they have to be viewed as such. When

we view them seriously like that, I think it takes on a different

tone.

And it was interesting to hear Mr. Ferrara talk about ‘‘they are

here’’ and ‘‘they can stay.’’ We don’t have to worry about retirements. The Emancipation Proclamation took care of that. We don’t

have slave labor in the Federal work force either, and you do have

to compensate them and they do have a life after the Federal system and they should have those privileges to go on to other things

like anybody does.

Ms. KELLEY. Mr. Chairman, you had asked if there were any

studies that the agencies have. The U.S. Customs Service is currently in the process of putting a request together that would request special hiring authority for just this reason, because they believe that they are running up against a lot of problems of identifying—not identifying, but recruiting the best and the brightest into

the inspector and the CEO ranks. Once that report is finished and

available, we will be glad to provide it to the subcommittee.

Mr. SCARBOROUGH. Let me say I have some people suggest that

another option be put on the table. Part of the concern underlying

this is what some people call the golden handcuffs. That is, people

stay in their positions long after they have stopped advancing in

their careers because they are attached to the retirement benefits.

These benefits are not portable, and they hate to lose out on benefits earned because they didn’t invest or they are just a few years

away from eligibility. Rather than continuing to expand the golden

handcuffs, these people suggest that we begin to migrate retireVerDate 11-MAY-2000 11:49 Jul 28, 2000 Jkt 000000 PO 00000 Frm 00177 Fmt 6633 Sfmt 6633 C:\DOCS\64649.TXT HGOVREF1 PsN: HGOVREF1
174

ment toward a defined contribution framework. That is, move the

Federal retirement benefit into an investment account that people

could take with them wherever they went, and change careers according to their interests rather than according to the constraints

of their retirement plans. Have you heard this suggestion and how

would you react to such a proposal?

Mr. FERRARA. Yes, I think that is a good alternative. Instead of

saying we will give you retirement benefits so you can leave after

20 years, and we will give you this taxpayer subsidy, what you

could do is make the retirement benefits more portable so that

someone who wanted to leave after 20 years, instead of feeling that

they were locked into Federal employment, would have a defined

contribution account. In other words, instead of the Federal Government over years would make contributions to an account that

would be invested and the worker—whenever the worker left, he

or she would take that account with them. So after 20 years, people

would be free to take that account with them, and they would not

be locked into Federal employment when they might have better

private opportunities. The taxpayers would not have to pay any

more, but the workers could take that account and have those attractive benefits.

I think that is a more appealing alternative. We have been advocates of this for some time. We want to see people have more control over their retirement resources. We have studies which show

that people can get at least as good benefits, if not better, in terms

of the final retirement benefit through these types of plans, and

they are often more fair because you don’t have this redistribution

from some workers to others. Each worker gets the money and they

have the chance to reinvest. They can get good returns in the private market. We think that is a better way of approaching this

issue. Instead of saying after 20 years we will give you this benefit

and you can get out, say at any point you can take the money and

go to the best employment opportunity, best employment opportunity you have.

I also want to state for the record in response to Mr. Gallegos,

I think it is clear that Federal employees are compensated and

they therefore are not slave labor and they do have attractive retirement benefits already.

Mr. SCARBOROUGH. What do you think about the portability concept?

Mr. GALLEGOS. Mr. Chairman, when you have portability, you

have to stay basically within the same class. My experience has

been if you have—let’s say in the State of New Mexico, if you are

a police officer in the city of Albuquerque for 10 years and move

to Las Cruces, you carry that time and service and those contributions with you over to the other agency. Even if you become a public employee as a city planner or whatever other entity that you

enter in the public sector, you carry those benefits and those contributions with you and you can apply that toward it. So there is

some portability.

I guess the question is if you are working for the Federal Government, then you decide to go to work at Intel doing something else,

I think that is what Mr. Ferrara is speaking to. I think you would

have a lot of demands on the funding issue and the ability for reVerDate 11-MAY-2000 11:49 Jul 28, 2000 Jkt 000000 PO 00000 Frm 00178 Fmt 6633 Sfmt 6633 C:\DOCS\64649.TXT HGOVREF1 PsN: HGOVREF1
175

tirement funds to be solvent over the long term. I think you would

have a tremendous drain on that. If they stay within the same

class, I would argue that is probably true.

If you are a Customs Inspector and you go to be an FBI officer,

that should be portable and counted toward that, and I think in

most cases it is.

Ms. KELLEY. I was a Federal employee for 15 years with the IRS

under the CRS system. As I understand it, FERS addressed this

golden handcuffs issue when it was created and the Thrift Savings

Plan makes the Federal retirement system quite portable. So the

retirement system does not need change, that is not the question

that surrounds this law enforcement status in our opinion.

Mr. FERRARA. Can I address those two questions briefly?

Mr. SCARBOROUGH. Sure.

Mr. FERRARA. Some other State and local jurisdictions are starting to move toward these types of plans. In the private sector you

have had a vast switch away from defined benefit plans to defined

contribution plans so you can design this, it has been shown, so

that you do not endanger the solvency of current retirement funds,

as Mr. Gallegos suggests.

Moreover, unions that represent public employees, the notion of

portability to go to nonpublic employment is anathema. So as long

as you have portability within government employment, there is no

problem. But for the worker, there is a problem because they may

want to work in the private sector, outside the government, and

there the portability issue has not been addressed. Particularly

workers who work less than 20 years lose out on the retirement

benefits and, again, a lot of studies show that. They are greatly disadvantaged by the traditional type of defined benefit plans like you

have at the Federal level and at most State and local governments.

So if you go to a defined contribution plan, those workers have

the same opportunity to benefit as longer-term workers, and so it

is more fair and in many cases you can expect the benefits to be

better over the long run for the longer-term worker with standard

investment performance.

Mr. GALLEGOS. But in most public sector retirement programs,

you pull your contribution out if you leave after 10 years and invest

it into another program.

Mr. FERRARA. But not the employer’s contribution. That is the

problem. That is where you lose.

Mr. SCARBOROUGH. To be continued. Well, I appreciate your testimony. It certainly has been helpful and again I pledge that this

subcommittee and the committee overall will be glad to work with

you all, and the Members who put these bills forward, to see what

we can do.

We will keep the record open for the next 45 days so any additional comments that you all may wish to add or any proposals for

true income tax reform that you may want to put in that you think

may make an IRS agent’s life easier, feel free to put that in the

record. Thank you again, and we are adjourned.

[Whereupon, at 12:55 p.m., the subcommittee was adjourned.]

[Additional information submitted for the hearing record follows:]

176

177

178

179

180

181

182

183

184

185

186

187

188

189

190

191

192

193

194

Æ