GAO-12-855R Reemployment of Retirees

September 10, 2012

The Honorable Joseph Lieberman

Chairman

The Honorable Susan M. Collins

Ranking Member

Committee on Homeland Security and Governmental Affairs

United States Senate

The Honorable Darrell E. Issa

Chairman

The Honorable Elijah Cummings

Ranking Member

Committee on Oversight and Government Reform

House of Representatives

Subject: Reemployment of Retirees: Six Agencies’ Use of Dual Compensation Waiver 

Authority is Limited

This report formally transmits a briefing we provided to the U.S. House of Representatives, 

Committee on Oversight and Government Reform on May 31, 2012, and to the U.S. Senate, 

Committee on Homeland Security and Governmental Affairs on June 5, 2012, which we have 

revised to reflect technical comments made in response to a draft of this report (see enc. I). 

We developed this briefing in response to a requirement in section 1123 of the National 

Defense Authorization Act (NDAA) for fiscal year 2010, which requires us to provide 

information on the use of agencies’ authority to grant NDAA waivers to Civil Service 

Retirement System and Federal Employment Retirement System reemployed annuitants. 

During our briefings to your offices, it was agreed that the work we conducted to date on 

agencies’ use of the NDAA waiver authority was sufficient to respond to the mandate.

The federal government has faced challenges in hiring and retaining talented workers, which 

are exacerbated by increased retirements in the federal workforce. To address these 

challenges, agencies have sought to rehire retired federal employees. Generally, when 

agencies rehire retirees their salary is subject to a deduction (offset) in the amount of the 

annuity.1 Section 1122 of the NDAA for fiscal year 2010 gives agencies the authority to waive 

this requirement on a temporary basis to allow for dual compensation of the salary and 

annuity as necessary; to fulfill functions critical to the mission of the agency; and to assist in 

 

1

See, 5 U.S.C. §§ 8344 and 8468.

United States Government Accountability Office

Washington, DC 20548
Page 2 GAO-12-855R Reemployment of Retirees

the development, management, or oversight of agency procurement actions; among other 

purposes.2

 

To respond to the NDAA mandate for information on federal agencies’ use of NDAA waivers 

for Civil Service Retirement System and Federal Employment Retirement System reemployed 

annuitants in fiscal years 2010 and 2011, we attempted to obtain and analyze governmentwide dual compensation reemployment data from the Office of Personnel Management 

(OPM); however, agency-reported data were insufficient to definitively determine the number 

of NDAA waivers the agency issued. Thus, we obtained data directly from a nongeneralizable 

sample of selected agencies. 

In the absence of reliable government-wide information, this report provides data directly from 

selected agencies and addresses the experience of selected agencies in using NDAA waiver 

authority to rehire retired Civil Service Retirement System and Federal Employment 

Retirement System annuitants. To do this, we selected a nongeneralizable sample of six 

agencies to review. We selected four Chief Financial Officer Act agencies3

—Nuclear 

Regulatory Commission (NRC), Small Business Administration, U.S. Agency for International 

Development, and Department of the Treasury—because they appeared to have the highest 

use of dual compensation waivers based on available data. We also selected U.S. Postal 

Service, a non-Chief Financial Officer Act agency, because it has a large number of 

employees, and because its increase in the use of part-time staff to address its financial 

insolvency indicated that it may have used a large number of NDAA waivers. Finally, we 

included OPM, a Chief Financial Officer Act agency, because it maintains executive agencies’ 

dual compensation reemployment data, and during the course of the review we inquired 

about OPM’s use of NDAA waiver authority. We obtained and reviewed data and conducted 

interviews with officials from these six agencies about their use of dual compensation waiver 

authorities. We determined that the agencies’ NDAA waiver data and information we used 

were sufficiently reliable given the extensive discussion and follow-up we conducted with 

them about the requested data. 

We conducted this performance audit from January 2012 through September 2012 in 

accordance with generally accepted government auditing standards. These standards require 

that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a 

reasonable basis for our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings and conclusions 

based on our audit objectives. 

In summary, the six agencies we reviewed made very little use of the NDAA waiver authority 

in fiscal years 2010 and 2011. The Department of Treasury made the most, although still very 

little, use of the waiver authority in both fiscal years—167 waivers in fiscal year 2010 and 214 

waivers in fiscal year 2011. Agency officials told us that their agencies used a combination of 

NDAA and other waiver authorities already in place when hiring retired workers. For example, 

during our review we found that the NRC used the waiver authority provided to it in the

 

2

Pub. L. No. 111-84, § 1122, div. A. title XI, 123 Stat. 2190, 2505-09 (Oct. 28, 2009). While this 

authority applies across the government (executive, legislative, and judicial branches), the Department 

of Defense and our agency are excluded from this authority since we both have separate authority 

permitting the reemployment of annuitants without subjecting salaries to offset. NDAA waivers are 

limited to annuitants who work no more than: 520 hours during the first 6 months of their retirement, 

1,040 hours during any 12-month period, or 3,120 hours total during their reemployment.

3

There are 24 agencies subject to the Chief Financial Officer Act, listed at 31 U.S.C. § 901.
Page 3 GAO-12-855R Reemployment of Retirees

Energy Policy Act of 2005, and used the NDAA authority to rehire an annuitant for purposes 

not available in the Energy Policy Act.4 None of the agencies reported that they exceeded the 

threshold imposed by the NDAA, 1 percent of their full-time employees, thus they were not 

required to prepare succession plans, as would have been required under the act. 

Agency Comments and Our Evaluation

We provided a draft of this report to OPM, NRC, the Department of the Treasury, Small 

Business Administration, U.S. Agency for International Development, and U.S. Postal Service 

for review and comment. All agencies agreed with our findings, and NRC was the only agency 

that provided written comments. The other agencies responded, but had no additional

comments on our draft report. 

In an August 16, 2012 letter (enc. II), NRC generally concurred with our finding that agencies 

made very limited use of the NDAA waiver authority during fiscal years 2010 and 2011, and 

stated that our report accurately reflected NRC’s use of the authority. NRC provided clarifying 

and technical comments to the report, which we incorporated as appropriate. In commenting 

on its use of the NDAA waiver authority, NRC stated that it appreciated the flexibility under 

the authority to waive pension offset to fulfill functions critical to the mission of the agency or 

any component of the agency; develop, manage, or oversee agency procurement actions; or 

promote appropriate training or mentoring of employees; among other reasons. NRC stated 

that it hopes that the authority will be extended. 

- - - - - 

We are sending copies of this report to the appropriate congressional committees. We are 

also sending copies to OPM, NRC, the Department of the Treasury, Small Business 

Administration, U.S. Agency for International Development, and U.S. Postal Service. This 

report will also be available at no charge on our website at http://www.gao.gov. 

Should you or your staff have questions concerning this report, please contact me at (202) 

512- 6806 or mihmj@gao.gov. Contact points for Offices of Congressional Relations and 

Public Affairs may be found on the last page of this report. Lisa Pearson, Assistant Director; 

Sara Daleski; Pawnee A. Davis; Karin Fangman; Rebecca Shea; and Greg Wilmoth made 

significant contributions to this report.

J. Christopher Mihm

Managing Director, Strategic Issues

Enclosures—2 

 

4

42 U.S.C. § 2210c. This waiver authority may be used when a temporary emergency hiring need 

exists or when there is exceptional difficulty recruiting or retaining a qualified employee.
Enclosure I

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Enclosure I

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Enclosure I

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Enclosure I

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Enclosure I

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Enclosure I 

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Enclosure I

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Enclosure I

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Enclosure I

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Enclosure I

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Enclosure II

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Comments from the Nuclear Regulatory Commission
Enclosure II

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Enclosure II

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(450957)
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