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AGENCY MISTAKES IN FEDERAL RETIREMENT—

WHO PAYS THE PRICE?

HEARING

BEFORE THE

SUBCOMMITTEE ON THE CIVIL SERVICE

OF THE

COMMITTEE ON 

GOVERNMENT REFORM 

AND OVERSIGHT 

HOUSE OF REPRESENTATIVES

ONE HUNDRED FIFTH CONGRESS

FIRST SESSION

JULY 31, 1997

Serial No. 105–80

Printed for the use of the Committee on Government Reform and Oversight

(

(II)

COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT 

DAN BURTON, Indiana, Chairman 

BENJAMIN A. GILMAN, New York 

J. DENNIS HASTERT, Illinois 

CONSTANCE A. MORELLA, Maryland 

CHRISTOPHER SHAYS, Connecticut 

STEVEN SCHIFF, New Mexico 

CHRISTOPHER COX, California 

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 

JOHN B. SHADEGG, Arizona 

STEVEN C. LATOURETTE, Ohio 

MARSHALL ‘‘MARK’’ SANFORD, South 

Carolina 

JOHN E. SUNUNU, New Hampshire 

PETE SESSIONS, Texas 

MICHAEL PAPPAS, New Jersey 

VINCE SNOWBARGER, Kansas 

BOB BARR, Georgia 

ROB PORTMAN, Ohio 

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 

GARY A. CONDIT, California 

CAROLYN B. MALONEY, New York 

THOMAS M. BARRETT, Wisconsin 

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 

———

BERNARD SANDERS, Vermont 

(Independent) 

KEVIN BINGER, Staff Director 

DANIEL R. MOLL, Deputy Staff Director 

WILLIAM MOSCHELLA, Deputy Counsel and Parliamentarian 

JUDITH MCCOY, Chief Clerk 

PHIL SCHILIRO, Minority Staff Director 

SUBCOMMITTEE ON THE CIVIL SERVICE

JOHN L. MICA, Florida, Chairman 

MICHAEL PAPPAS, New Jersey 

CONSTANCE A. MORELLA, Maryland 

CHRISTOPHER COX, California 

PETE SESSIONS, Texas 

ELIJAH E. CUMMINGS, Maryland 

ELEANOR HOLMES NORTON, Washington, 

DC 

HAROLD E. FORD, JR., Tennessee 

EX OFFICIO

DAN BURTON, Indiana HENRY A. WAXMAN, California 

GEORGE NESTERCZUK, Staff Director 

NED LYNCH, Professional Staff Member 

CAROLINE FIEL, Clerk 

CEDRIC HENDRICKS, Minority Counsel 

(III)

C O N T E N T S 

Page 

Hearing held on July 31, 1997 ............................................................................... 1

Statement of: 

Flynn, William E., Associate Director, Retirement and Insurance Service, 

Office of Personnel Management; Sarah Hall Ingram, Associate Chief 

Counsel, Employee Benefits/Exemption Organizations, Internal Revenue Service; Diane Disney, Deputy Assistant Secretary, Civilian Personnel, Department of Defense; and Linda Oakey-Hemphill, Agency 

Retirement Counselor, Department of the Treasury ................................. 43

White, Alan, Office of the Inspector General, Department of Defense; 

David Mangam, Army War College; John Gabrielli, Internal Revenue 

Service; and E. Barry Schrum, Department of Energy ............................. 8

Letters, statements, etc., submitted for the record by: 

Disney, Diane, Deputy Assistant Secretary, Civilian Personnel, Department of Defense, prepared statement of ..................................................... 62

Ingram, Sarah Hall, Associate Chief Counsel, Employee Benefits/Exemption Organizations, Internal Revenue Service, prepared statement of .... 55

Mica, Hon. John L., a Representative in Congress from the State of 

Florida, prepared statement of .................................................................... 4

Oakey-Hemphill, Linda, Agency Retirement Counselor, Department of 

the Treasury, prepared statement of ........................................................... 66

Schrum, E. Barry, Department of Energy, letter dated July 21, 1997 ........ 31 

White, Alan, Office of the Inspector General, Department of Defense, 

prepared statement of ................................................................................... 12

(1)

AGENCY MISTAKES IN FEDERAL 

RETIREMENT—WHO PAYS THE PRICE? 

THURSDAY, JULY 31, 1997 

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON THE CIVIL SERVICE, COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT, Washington, DC. 

The subcommittee met, pursuant to notice, at 9:05 a.m., in room 

2154, Rayburn House Office Building, Hon. John L. Mica (chairman of the subcommittee) presiding. 

Present: Representatives Mica, Pappas, Morella, Cummings, and 

Ford. 

Staff present: George Nesterczuk, staff director; Ned Lynch, professional staff member; Caroline Fiel, clerk; and Cedric Hendricks, 

minority counsel. 

Mr. MICA. I’d like to call this meeting of the House Civil Service 

Subcommittee to order. This morning we’re going to have a hearing 

related to mistaken enrollments in our Federal retirement programs. And the title of today’s hearing is, ‘‘Who Pays the Price?’’

I’d like to start with an opening statement, then I’ll recognize 

other Members for their comments and we’ll begin the hearing. 

We, in fact, have heard many complaints about Government 

agencies making errors in Social Security payments, veterans’ benefits, tax audits, and other transactions with ordinary citizens. 

Today, however, we’ll hear about a strange twist in this tale. And 

that is Federal employees who themselves are victimized by mistakes of their own agencies. Beginning some 10 years ago, hundreds, perhaps thousands of Federal employees—and we’re trying 

to get a handle on that figure—but hundreds, in fact, maybe thousands of employees here are enrolled in the wrong retirement system. 

What sounds like simple administrative error has turned into a 

bureaucratic nightmare for many of these individuals. The consequences of these errors, in fact, can be quite severe: reduced retirement benefits, back taxes owed, underfunded Thrift Savings accounts, lost investment opportunities, and tons and tons of aggravation. 

Our purpose today is to hear testimony that will illustrate and 

personalize the impact of these agency mistakes. We’ll also hear 

from some of the agencies that are involved. I hope that their experiences will contribute to a swift and satisfactory resolution of our 

employees’ problems. 

This issue has festered for several years now, and the list of victims keeps growing. By now there’s plenty of blame to go around 

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for everyone. We can start with the employees in the agencies who 

made the mistakes in the first place. Then, of course, there’s the 

Office of Personnel Management, the agency responsible for administering our Federal retirement programs. Why haven’t they in fact 

intervened or found a solution to this problem? Does OPM think 

that expensive legal suits are the proper course, or in some cases, 

the only course for individuals to resolve this? The Federal Retirement Thrift Savings Board deserves credit for attempting to resolve 

this problem in 1990. But they could have saved many people unnecessary grief if they had pursued enrollment problems more aggressively. 

Of course we can’t forget the Post Office and Civil Service Committee in the 101st Congress. Congress should receive a special 

prize for ducking this issue from the beginning. In fact, Congress’ 

position on this enrollment problem was not just nonresponsive, it 

was, in fact, irresponsible. 

Here’s what they said in an April 19, 1990, report: ‘‘The committee believes that the right to file suit provided in current law 

is an appropriate means for participants and beneficiaries to seek 

relief if the administrative process proves unsatisfactory.’’

In effect, Congress threw these employees to the wolves—and it 

sounds like the attorneys—and told them to sue if they didn’t like 

it. But then OPM was not much better. This has been called an administration that ‘‘feels your pain’’ and trumpets its alleged ‘‘customer-oriented’’ reinvention of government. OPM’s customers are 

the Federal employees whose retirements they hold in trust. And, 

unfortunately, these are the people that are also feeling the pain 

right now. 

Stripped of the formalities, this is what OPM has to say about 

the innocent victims of this administrative nightmare. And I quote 

again from one of their correspondences on this issue.

Dear Federal employee: Your agency has made a mistake. Because of that mistake your enrollment in CSRS retirement is terminated. You are being placed in 

FERS. You now have a Social Security problem. So contact the Social Security administration to correct your records. 

You also have a tax problem. So you should contact the Internal Revenue Service 

and work it out. While you’re at it, get in touch with the Thrift Investment Board, 

then check your agency personnel records and also straighten out your Federal retirement records.

We have a copy of one of these letters that was sent out December 24, 1996—the end of last year—just in time for the holidays. 

I sure hope that whoever came up with the letter didn’t get the 

Vice President’s Golden Hammer Award for warmth and sensitivity. 

The retirement and insurance service at OPM has been chosen 

to be one of the administration’s flagship performance-based organizations. If this is what they consider model performance, then the 

expression, ‘‘I’m from the government. I’m here to help you,’’ will 

remain a warning, not a promise. 

Can you imagine a private sector company sending a similar letter? We made one up here just for illustration purposes.

Dear consumer: About the car you bought from us last year. It’s a lemon. The 

transmission is bad and will cost you a bundle to fix. You have probably noticed 

that the engine is no good. We hope you can afford to maintain it. We made a mistake in pricing the car, so we kept the sales tax to make up the difference. 

3

Your state revenue office will be in touch to collect the taxes you now owe. By 

the way, we put the wrong plates on your car and messed up your registration. You 

may want to sort that out with the Motor Vehicle Bureau. It’s been a pleasure, and 

we hope to see you again real soon.

We just made that up for illustration. But it does sum up the 

type of problem that we face here. Fortunately, in a competitive 

marketplace, businesses like that would not survive. Businesses 

that send out that kind of notice would be laughed at. The marketplace would take care of that problem before government regulations could be enacted. 

Unfortunately, for our Federal employees, it will take legislation 

to fix this enrollment problem. And we’re here today to try to come 

up with a better answer than the bureaucratic inertia these employees have had to face so far. I’ve made some light of the aspects 

of this issue, but the problems are very real. 

Our first panel today will put a human face on this problem. And 

our second panel of agency witnesses hopefully will provide some 

useful suggestions and solutions from the administration on how 

we may work together to fix this problem. 

Even if we are unable to resolve this with the recommendations 

from the panel, I hope that we in Congress can come up with a solution that will help the agencies out of this dilemma we find ourselves in today. Those are my opening comments. I’m very pleased 

to yield now to the distinguished gentleman and ranking member 

from Maryland, Mr. Cummings. 

[The prepared statement of Hon. John L. Mica follows:]

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Mr. CUMMINGS. Mr. Chairman, I want to thank you very much 

for holding this hearing today. It is a very important hearing. I will 

not spend my time trying to place blame here or there. I am interested to hear what the second panel has to say. But I know one 

thing. If we can send that little wagon up there to Mars and we 

can get pictures back, then we sure ought to be able to resolve this 

issue. 

One of the things that has consistently concerned me is that a 

lot of times we in Government forget that we as human beings 

have one life to live; this is no dress rehearsal, and this is the life. 

And so when we miss out, when people are deprived of things 

that they were due through no fault of their own, government has 

a responsibility to correct it if we made the mistake. And that’s 

what it’s all about. 

I want to be in a situation that after this hearing, by the end 

of this hearing, that we set some kind of a deadline to have this 

matter resolved. I mean to have it resolved so that people do not—

I read the testimony and it screams at me. When I read the testimony last night that was going to be presented here today, I said, 

‘‘Something has to be corrected.’’

Now let me tell you something. We can have motion, commotion, 

and emotion, and no results. That does not do families any good 

whatsoever. It does not do these witnesses any good. And the people that they represent. And when I say the people they represent, 

I mean the people that are in like circumstances. 

And so today we need to begin—we have done all kinds of things 

in this Congress very rapidly. When we want to do something we 

do it. And I think that between both sides of this—and I know of 

our chairman’s concern. But that concern, all of our concern has to 

be turned into results with a timetable. 

And so the agencies at some point have to come together. Mr. 

Chairman, I’m going to recommend at some point that we set a 

deadline for having this matter resolved. I mean, we can go on and 

on and on, and guess what. I’m so glad that you talked about the 

history of this, because folk could be in the same position next 

year, 5 years from now, 10 years from now, unless we set some 

type of deadlines. 

And so I’m glad you brought us together today with regard to 

this issue. It is a very important issue. And now government must 

stand up for people who have stood up for us. I get tired of the rap 

that Federal employees take when they are working, giving this 

United States of America every single thing—their blood, sweat, 

and tears—but yet and still when we make mistakes, they’ve got 

to wait to have them resolved. 

And so I had a written statement, but I am so upset about this 

I am speaking from my heart. And so I hope that we’re able to resolve this, Mr. Chairman. And I agree with you. We cannot wait 

one moment. One more moment not resolving this matter is a moment that some child in the family of one of these witnesses will 

not get what they are due. 

When opportunities are missed—and I repeat, we have one life 

to live. This is no dress rehearsal. And this is the life. I want to 

thank the witnesses for being here today. I look forward to your 

7

testimony. And hopefully we’ll be able to bring some swift and appropriate resolution to this matter. 

Mr. MICA. I thank the gentleman for his opening comments and 

yield now to the vice chairman of our panel, Mr. Pappas. You’re 

recognized. 

Mr. PAPPAS. Thank you, Mr. Chairman. And thank you for calling this hearing. And I, too, had the opportunity to review the written testimony of some of the folks that we’re going to hear from. 

And I was equally horrified. 

And, you know, one thing that struck me, we each in our lives 

have to deal with deadlines. We have reports or tasks that have 

to be done by a certain date. People that are in business have to 

meet deadlines in dealing with their customers. And what I saw 

here, again, in reading these stories and the descriptive memo kind 

of outlining this entire situation, appeared to be a lack of accountability from some who may have been dealing with these programs 

and dealing with the Federal employees, many of which have experienced disruption to their lives and to their financial well-being. 

So I, too, want to join my voice to those who are demanding accountability for what has taken place and not to just set yet another deadline that won’t be met. Thank you, Mr. Chairman. 

Mr. MICA. Thank you. And I now recognize the gentlelady from 

Maryland, Mrs. Morella. 

Mrs. MORELLA. Thank you, Mr. Chairman. I do want to thank 

you for holding this morning’s hearing to discuss retirement enrollment errors between January 1984 to January 1987. 

In May, I wrote the chairman a letter requesting that he hold a 

hearing on this matter. And I really want to thank him and his 

staff for beginning the process of figuring out how to remedy this 

complicated issue. I also wrote to OPM, and I haven’t yet received 

a response. 

Many, possibly thousands of Federal employees who were hired 

between January 1984 and 1987 were erroneously placed in CSRS. 

And to this day, many of them do not know that they are in the 

wrong system and the serious financial consequences that await 

them. 

Those who have discovered the error have been deprived of critically important retirement benefits and tax benefits. And they have 

been subjected to tremendous strain and incurred tremendous legal 

expenses. Mr. Chairman, this situation is incredibly unfair. I 

strongly believe that these Federal employees are entitled to compensation for these losses, losses that were the direct result of their 

agency’s actions. 

Testifying before us today is one of my constituents, Barry 

Schrum. He has been deeply affected by his agency’s errors. Mr. 

Schrum was hired by the Office of the Inspector General of the Department of Energy in December 1994, and was placed in the Civil 

Service Retirement System, despite the fact that new enrollments 

were prohibited after December 31, 1983. 

In August 1987, he was told he had the option of electing to participate in the new retirement system, the Federal Employee Retirement System. But he chose to remain in the CSRS. From that 

time until April 1996 the OIG withheld CSRS contributions of 7 

percent of his salary. 

8

In April 1996, OIG personnel determined that he had been improperly placed in CSRS and that his retirement classification 

would retroactively be changed to FERS. Mr. Schrum will tell the 

whole story. But I must emphasize the fact that Mr. Schrum and 

thousands of other Federal employees who were incorrectly classified were denied several opportunities to save for their retirement, 

and we owe it to them to remedy this situation. 

It is absolutely critical that we hold OPM and agencies responsible. Last year the Senate Appropriations Committee directed 

OPM to provide a legislative recommendation by January. As no 

action by OPM has been taken, it is past time for the Congress to 

step in. 

I look forward to today’s discussion of ways to remedy this egregious situation. 

Thank you, Mr. Chairman. 

Mr. MICA. I thank the gentlelady and also for her leadership on 

this issue and helping to bring it before our panel. I would like to 

introduce and welcome our first panel this morning. Our panel is 

just a sampling of dozens of individuals we’ve heard from and cases 

resulting from these errors in enrollment. 

Our first panel today consists of Alan White, Office of Inspector 

General, the Department of Defense, Mission Viejo, CA. I think 

he’s also going to bring us some remarks from a witness who 

couldn’t be with us, Deborah Monroe. 

We have David Mangam, from the Army War College of Carlisle, 

PA; John Gabrielli, Internal Revenue Service, Buffalo, NY; and E. 

Barry Schrum, Department of Energy, Derwood, MD. 

I just want to advise the members of our panel that this is an 

investigations and oversight subcommittee of Congress. It is customary that we swear all of our witnesses in, so if you would stand. 

[Witnesses sworn.] 

Mr. MICA. The record will reflect the witnesses answered in the 

affirmative. Since you have not testified before this panel before, I 

might indicate that we like to have our panelists keep their oral 

comments to the subcommittee limited to 5 minutes, if you would, 

and try to summarize. 

And we would be glad to take other testimony or information for 

the record. We’ll be glad to do that. 

I’d like to welcome each of you; thank you for participating. First, 

for 5 minutes, Mr. Alan White, Office of the Inspector General, Department of Defense, Mission Viejo, CA; good morning and welcome, Mr. White, you’re recognized. 

STATEMENTS OF ALAN WHITE, OFFICE OF THE INSPECTOR 

GENERAL, DEPARTMENT OF DEFENSE; DAVID MANGAM, 

ARMY WAR COLLEGE; JOHN GABRIELLI, INTERNAL REVENUE SERVICE; AND E. BARRY SCHRUM, DEPARTMENT OF 

ENERGY 

Mr. WHITE. Thank you, Mr. Chairman and members of the subcommittee. It is my pleasure to be here today and have this opportunity to discuss the matter of erroneous enrollments in the Federal retirement systems. 

It is my belief that it is a significant problem throughout the 

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9

ployees. At the request of the subcommittee I will provide testimony about my experience as an employee of the Department of 

Defense Inspector General. 

By way of introduction, I am currently a GS–15 working as the 

assistant special agent in charge of the Defense Criminal Investigative Service western field office in Mission Viejo. We’re the criminal 

investigative arm of the Department of Defense Inspector General. 

As you requested, I will specifically address those issues mentioned in your letter. On August 26, 1984, I was hired by the Department of the Air Force as a civilian criminal investigator and 

placed into the Civil Service Retirement System for Federal law enforcement. 

On August 31, 1986, I accepted a position with the Department 

of Defense Inspector General, DCIS and remained in the CSRS. 

With the passage of FERS I should have been transferred to FERS 

effective January 1, 1997. The DODIG personnel office did not 

transfer me into FERS but continued to classify me as an employee 

covered by CSRS offset program. In April 1991 the DODIG personnel office documented a review of my personnel file to verify my 

service computation date and that I was in the proper retirement 

system. This review failed to detect the erroneous retirement enrollment. CSRS contributions of 7.5 percent of my salary continued 

to be withheld from my salary until January 1996, when the error 

was detected. 

The error was detected when I requested my personnel office to 

calculate the cost of my active duty military time which I could 

have purchased for CSRS credit. During that process it was discovered that I was in the wrong retirement system. 

As a result, on February 28 my personnel office changed me from 

CSRS to FERS. I was not notified of this change until I later discovered the discrepancy on my leave and earnings statement on a 

Saturday. I happened to read it at the mail box. I knew something 

was deeply wrong at that time when the amount had changed from 

$51,000 to $103. 

The personnel office did not officially notify me until April 3, 

1996. Between April and May 1996 I had many contacts with my 

personnel office as well as OPM. Neither agency could provide me 

with any guidance on what I should do. Rather, I was advised that 

the resolution of the matter would require congressional or legal 

action. 

It was suggested that I contact my local Congressman and seek 

his intervention. OPM advised me that they were only aware of a 

few people who were impacted similarly to me. My personnel office 

advised me that I was the only one they were aware of. 

After receipt of this information I appealed to the DODIG personally and requested her intervention. Once she became aware of 

the problem she wrote the appropriate chairmen of the House and 

Senate subcommittees and requested their intervention in addressing this matter. The various responses from those chairmen revealed that they were aware of the problem and it was their hope 

the problem would be addressed in the 105th Congress. 

To protect my interests I retained legal counsel to explore what 

legal remedies were available. Consequently, on July 28, 1997, 1 

day before the statute ran out on my ability to file legal action, I 

10

filed a lawsuit seeking full restitution in U.S. District Court in 

Washington, DC, along with four other of my Federal colleagues. 

Clearly, being in the wrong retirement system has changed my 

whole life over the past 18 months. My retirement planning has 

been centered solely around CSRS. The most immediate concern, as 

a Federal law enforcement officer, is the welfare of my family if 

something should happen to me. 

For example, the survivors’ benefits under FERS are less than 

half of what my family would receive under CSRS. Additionally, 

there are virtually no funds in my Thrift Savings account. 

My wife and I feel frustrated and bitter about how this entire 

matter has been handled and the fact that we’ve had to deplete our 

savings for legal and expert witness fees. The estimated financial 

impact over my lifetime has been estimated at over $2 million. 

My dealings with OPM, my contact with OPM has been horrid 

from the very beginning. At the onset, when I learned how many 

people were impacted, or when I asked how many people were impacted, they refused to tell me. However, I learned that there were 

over 341,000 people hired during that timeframe, between January 

1, 1984 and December 31, 1986. With that large of a number I suspected that there were more than a few impacted. Unfortunately, 

Congress had directed OPM for the past 2 years to study the extent 

of the problem and draft legislation. OPM has continued to ignore 

the issue and failed to responsibly address this problem. Meanwhile the clock continued to tick on any legal action I could take. 

It is outrageous that a Federal agency like OPM can get away with 

acting as irresponsibly as they have in addressing such a significant problem with so many Federal employees that are involved. 

If a private sector company failed to address a problem such as 

this, the Department of Labor and/or the Department of Justice 

would intervene on the wronged employees’ behalf without hesitation, and has done so. 

Obviously, this same legal protection should be afforded to Federal employees as well. Throughout this entire ordeal, myself and 

my fellow Federal employees have been made to feel that we are 

somehow different and held in lower regard than the private sector. 

I can’t help but believe that there are thousands of Federal employees affected, because I continue to receive calls weekly from 

Federal employees who are similarly impacted. It is absurd that 

Federal employees must take legal action to ensure a viable retirement system when this situation was created through no fault of 

their own. 

Finally, I believe that Congress should no longer wait for OPM 

to address the problem since OPM has ignored and defied the specific direction and will of Congress for the past 2 years. Congress 

should enact legislation that would simply allow those wrongly enrolled in CSRS to remain in CSRS if they so choose or transfer to 

FERS. The agency who erroneously enrolled the employee should 

bear the expense of getting that employee whole. 

Further, Congress should require the agency to make the government employee whole by depositing the necessary contributions on 

behalf of the employee at 10 percent of the employee’s wages from 

the date of employment to the present along with the corresponding 5 percent matching funds by the agency plus interest. 

11

The option of investing for the period in question in either the 

C fund or G fund would be at the employee’s discretion. Those impacted by this situation who elect to transfer to FERS Congress 

should provide a one time exemption on the amount that can be 

contributed to an employee’s Thrift Savings account. Currently, the 

law only allows that maximum $9,500 be deposited. This would 

allow the employee’s agency to make a one time deposit of the calculated harm determined by the Thrift Savings Investment Board 

to his or her account. 

Basically, that summarizes my testimony. But one of my colleagues who could not be here today——

[The prepared statement of Mr. White follows:]

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Mr. MICA. Without objection, we’re going to extend your time so 

you may read the comments——

Mr. WHITE. Yes, sir. 

Mr. MICA [continuing]. I understand it’s relatively brief—of Deborah Monroe. 

Mr. WHITE. Yes, sir. 

Mr. MICA. You’re recognized. 

Mr. WHITE. OK. Sir. This statement is by Deborah Monroe, program assistant—GS–7—for the Department of Housing and Urban 

Development from Chicago, IL.

Mr. Chairman and members of the subcommittee, first of all I would like to thank 

Congress for deeming this to be an important issue and making it possible for this 

statement to be read into testimony. 

I am currently a GS–7 program assistant in the multi-family branch in the Department of Housing and Urban Development HUD office in Chicago, Illinois. I was 

hired as a first time Federal employee in 1982 as a clerk typist (temporary) by 

HUD. My appointment ended and I was hired again in August 1983. The date is 

my service com date. 

On February 23, 1995 I was notified by my personnel office in writing that my 

retirement category had been corrected to FERS and Social Security. My personnel 

office informed me that this was done because I had been erroneously placed in the 

wrong retirement system, CSRS. 

I would like to reveal to Congress about the lack of assistance and support that 

I’ve received from my personnel office since 1995. I have received total callous and 

insensitivity regarding my situation. 

An article published by the Federal Times on September 16, 1996 made me aware 

that I was not the only person that was experiencing this problem. I was told that 

I was the only one in this situation by my personnel office. I called Mr. Alan White, 

who had the article written in the Federal Times, to inform him that I had been 

dealing with this problem since February 1995 in vain. This is just an example of 

what happens to a person at my grade level and how I was treated. 

It took Alan White and Barry Schrum, grades 13 and 15, to get this matter moving. I went through and spoke with the same people in my office as Mr. White did 

in his and wrote to everyone that he did. My results: I was told nothing could be 

done. 

No one was willing to help me. I had been an outstanding government employee, 

and this was how I was treated. My personnel office displayed a hostile attitude and 

dealt with me in a negative and unprofessional manner. My continuous effort in trying to resolve this matter to date has been futile. 

My personnel office had no idea on how to resolve this issue. I have escalated the 

problem all the way up to HUD Assistant Secretary, Marilyn Davis, to no avail. I 

attempted and was denied the opportunity for a third party to help, Mr. Linford 

Coleman, who is the Blacks in Government president. 

I have been under an enormous amount of stress and strain and it’s been a major 

strain on my whole family. I am mad at the system and my personnel office because 

this entire matter has been laughed at by many HUD officials. I was told by the 

legal department that if I took this matter out of HUD, I would lose. 

I want to also express that had it not been for Mr. Alan White and Mr. Barry 

Schrum I would have lost my mind. They have been my rock. Because of these issues and the threat of downsizing our office I have no idea where retirement funds 

reside. And this has caused me great psychological and physical trauma. 

I would like, again, to thank the chairman of the committee for taking a concern 

in myself and my two very good friends, Mr. Alan White and Mr. Barry Schrum. 

I thank Congress for allowing my statement to be read and entered into the record. 

And I am very sorry that I could not attend.

Mr. MICA. Thank you, Mr. White. And also thank you for providing us with the testimony of Ms. Monroe. I’d like to now recognize 

David Mangam of the Army War College. You’re recognized, sir. 

Mr. MANGAM. Mr. Chairman, I am David Mangam, a GM–14 

civil servant working for the Department of the Army at the U.S. 

Army War College, Carlisle Barracks, Carlisle, PA. I appreciate the 

opportunity to appear before you today on behalf of myself and all 

24

the other civil servants who are in a similar situation, which is, recently being notified that their employing agency made a mistake 

many years ago and placed them erroneously in the wrong retirement program. 

I entered Federal civil service via the United States Army Europe on January 31, 1983, as an overseas limited appointee, that 

is, a 5-year overseas employee limitation. On January 29, 1984, I 

was converted to a career condition appointment and according to 

the agency and OPM, was correctly placed in the Civil Service Retirement System, as there were no laws otherwise at that time. 

As I now understand the events, Public Law 98–369 on July 18, 

1984, retroactively changed retirement program status for all employees hired post-December 31, 1983. I am a retired Army E–7 

who relinquished promotion and retirement as an E–8 in order to 

accept continued Federal employment as a civilian (original appointment was at grade GS–12). 

My decision to continue Federal service was heavily biased on 

the projected ability to combine my military service with continued 

Federal civil service with a goal to retire at 35 to 40 years of total 

combined service. The Civil Service Retirement System into which 

I was placed offered me this opportunity. 

If I had been informed at the outset of civil service employment 

that I would not be able to fully incorporate my 20 years of military service with continued Federal service and have the option to 

retire after 35 years of service, then I would clearly have chosen 

an employment path that provided me that similar opportunity. 

In August 1996, the local civilian personnel office notified me in 

discussions that they discovered what might be an error in retirement system placement. On November 7, 1996, I was officially notified that I was to be converted to the FERS retirement system. 

Effective November 24, 1996, the personnel system changed my 

retirement enrollment. I requested agency and OPM review of this 

decision on December 4, 1996. The OPM review fully supported the 

agency action. The full transition of this action is still in process 

and could take up to 257 pay periods, which is approximately 10 

years. 

And even with that I will not be fully restored in the FERS system and never be equal to the full CSRS retirement I had been offered as part of my employment. This mistake will cost me more 

than $30,000 per year if I am to retire after 35-plus years of civil 

service. 

It will cost me an aggregate of approximately $1.6 million across 

my projected 35-plus years of retirement. Note, my parents are deceased at age 87 and 90, and I would expect the same life expectancy. 

There is no possible way that I can retire in the next 8 to 10 

years under FERS unless I can obtain a settlement to offset the 

disparity of the decision. My wife and children share this anxiety 

and uncertainty with me. It has caused great turmoil in our lives 

and family relationships. 

An additional personal cost is due to me due to increased stress 

and anxiety which has caused complications in my daily health. I 

am a type II diabetic. The rise in blood sugars causes extreme depression and fatigue on a daily basis, which requires big increases 

25

in sick leave usage. I have applied to the agency, OPM, the 

DODIG, the U.S. Merit Systems Protection Board for review and 

correction. 

I have also discussed this with the TSP board and the Defense 

Finance Accounting Services. All have upheld the action as in accordance with public law. The OPM reply recognized that it was 

clearly an agency error and they could not change the retirement 

coverage due to law and they have no authority over monetary settlement provided by my agency. 

I applied for settlement to my agency. And although they understood the error and supported me, they could not provide settlement. 

Two corrective actions are possible: Grandfathered return to the 

CSRS retirement and repositioning of all fund transfers and taxes 

correctly, reimbursement for out of pocket expenses or, two, make 

me whole in the FERS system and reimburse all lost interest, compound interest, military buy-in loss, retirement offset, IRS/OASDI 

loss, plus personal expenses. 

OPM has provided support only when directly challenged. They, 

through the agency, did not provide all conversion information and 

opportunities. As an example, in 1996 the IRS retirement contribution ceiling was $95,000 and my TSP annual contributions were 

under $4,000. Therefore, I should have been offered the option to 

contribute the difference to back payments to TSP. 

And, until pushed hard, they did not start even making up the 

back payment deductions for TSP. They are also not able to fully 

correct losses in TSP interest and compound interest due to public 

law. To date, they are still withholding over $30,000 plus interest 

out of my previous CSRS contributions, even if they have made 

OASDI and FERS make-up payments from my initial total CSRS 

fund. 

These are direct individual contributions and not required for 

FERS or OASDI or other legal back payments and belong to the 

employee. As reported to by many staff and action personnel, this 

problem has been recognized for more than 6 years, yet OPM policy 

and procedures have not fully developed, nor has this problem been 

fully brought to your committee for a resolution that would be equitable and fair. 

I would recommend that this committee provide full relief to all 

Federal service employees who in good faith contracted employment with the Federal Government, by bringing into law these options: To become fully vested in FERS with Government support 

for losses, or to be fully grandfathered into CSRS with support for 

all losses incurred by these transition efforts. 

Thank you for providing me the opportunity to address this concern to your committee. 

Mr. MICA. I thank you for your testimony and now would like to 

recognize John Gabrielli, Internal Revenue Service. You’re recognized, sir. 

Mr. GABRIELLI. I’m an employee of the Internal Revenue Service 

and a member of the National Treasury Employees Union, local 

chapter 58, from Buffalo, NY. Mr. Chairman and members of the 

subcommittee, I thank you for providing me with the opportunity 

to tell my situation regarding my retirement. 

26

I hope that this subcommittee will be able to provide some relief 

to me and others who have had similar problems. On January 10, 

1983, I started with the Internal Revenue Service under a temporary appointment in the taxpayer service division. The employment was due to expire on April 15, 1983. 

I was employed through a series of temporary appointments until 

I was finally converted to a career conditional appointment on September 30, 1984. It was at this time that I was incorrectly coded 

as eligible for retirement benefits under the Civil Service Retirement System, known as CSRS. 

At the start of 1987, I received a computer-generated letter from 

the human resources division of the national office advising me 

that I was currently covered under the CSRS. The letter also informed me that beginning July 1, 1987, I would have the opportunity to transfer my enrollment to the Federal Employees Retirement System, known as FERS. 

The letter advised me that I would receive information on CSRS 

and FERS that would assist me in making an irrevocable decision 

concerning my retirement. Subsequently, I received written information and an oral presentation comparing the two retirement systems. I elected to remain under the CSRS. 

On April 14, 1993, I was summoned to a meeting with four other 

employees from my district. During this meeting I was informed 

that I was incorrectly placed in the CSRS and should have been 

placed under the FERS. During the meeting we were told that our 

district human resources branch was seeking guidance from the national office of IRS. 

A series of letters passed between the district and the region, all 

seeking equitable solutions. Thereafter, the assistant chief counsel 

indicated in a letter dated November 15, 1993, that there was no 

statutory authority permitting a waiver from the FERS provision 

for me and the other employees. 

In a memorandum dated October 25, 1993, from the acting chief, 

resources management division, I was told that effective May 5, 

1991, I would be placed under the FERS. I was advised that the 

process of adjustments to my retirement funds had begun. I was 

also advised that the IRS was seeking a determination from the 

Comptroller General whether we could receive a refund of our 

CSRS contributions that could not be paid into Social Security for 

the years which are beyond a 3-year statute of limitations. To this 

date, I have not been informed of a final decision on this issue. 

When it became clear that I was placed under the FERS, I enrolled in the Thrift Savings Plan, known as TSP, on September 13, 

1993, I designated 5 percent of my income to be apportioned between the three funds. Later, in an attempt to make up for the 6 

years that I should have had in the TSP, I transferred all moneys 

from the G and F funds to the C fund and started having 100 percent of my 5 percent plus matching funds invested in only the C 

fund. 

Despite the risks involved with this strategy, I’m seeking the 

highest return on my investments in an effort to catch up on all 

the time I missed. As of August 7, 1993, I had $13,382 in my CSRS 

retirement fund. When I was switched over to the FERS, 0.8 percent of this amount was applied to my FERS retirement account. 

27

The IRS informed me that it could only pay 3 years retroactively 

for Social Security. The rest of the moneys that I contributed under 

the CSRS are the subject of the pending Comptroller General decision. 

It would only seem fair for me to get back the moneys that I invested, and reinvest them in my TSP account. I have yet to see any 

reimbursements. 

If I had been correctly informed in 1987, that I was covered 

under the FERS, I would have opted to place 5 percent of my gross 

wages into the TSP. Instead, believing that I was covered under 

the CSRS, I chose not to join TSP at that time. 

I have lost 6 years of contributions into the TSP, as well as the 

agency’s matching contributions. In addition, I have missed 9 

years’ worth of Social Security deductions. Robert Tobias, president 

of the National Treasury Employees Union, sent a letter to IRS on 

behalf of the affected employees, seeking assistance and a legislative solution. David Mader, chief, management and administration, 

responded that the affected individuals would ‘‘Receive full FERS 

and Social Security coverage in addition to retroactive agency automatic TSP contributions, agency matching benefits and lost earnings.’’

In the fiscal year 1996 Treasury Postal Appropriations bill, 

NTEU sought a solution. The language included in the legislation 

stated, ‘‘OPM is directed to review the IRS problem and other similar circumstances and make every effort to resolve this issue with 

common sense and fairness in mind. OPM is instructed to correct 

these problems through administrative procedures, if possible, and 

if not, recommend any legislative action that may be required to 

correct this and any other inadvertent inequities.’’

This bill, Senate bill 1287, introduced by Senator Leahy of 

Vermont, also provided Federal employees who were erroneously 

covered by CSRS the option to elect continued coverage under the 

CSRS or transfer coverage to the FERS. 

In my view, legislation should be passed that would give me either the option to revert to coverage under CSRS or to remain in 

FERS with guarantees that all of my CSRS contributions plus 

matching agency contributions would be credited to my TSP account, together with accrued interest. 

As the events described above unfolded I relied on the efforts 

that the IRS was making on my behalf. I voiced my concern about 

possible financial harm that I would encounter upon retirement. 

These efforts included an appeal to the Merit Systems Protection 

Board, letters to Senator Alfonse D’Amato, and discussions with 

NTEU. 

I never had any direct dealings with the Office of Personnel Management, and am not aware of any efforts that OPM has made on 

my behalf to either correct or facilitate the correction of my records 

with the Internal Revenue Service or with the Social Security Administration. 

In conclusion, I feel that some form of legislation is needed to ensure that I and the other people in similar circumstances are not 

harmed financially in any way from a mistake that we had no control over. I believe that every effort should be made, through proper 

legislation to recompense our TSP accounts to reflect the contribuVerDate jul 14 2003 11:24 Dec 03, 2003 Jkt 010199 PO 00000 Frm 00031 Fmt 6633 Sfmt 6602 W:\DISC\46343 46343
28

tions that we would have made had we known that we were to be 

covered under FERS, a system whose main component is the TSP. 

Thank you for the opportunity to provide this statement. I’d be 

happy to answer any questions that you have on this issue. 

Mr. MICA. Thank you, and I’d like to now recognize Barry 

Schrum. And he’s with the Department of Energy from Derwood, 

MD. You’re recognized, sir. 

Mr. SCHRUM. Mr. Chairman, members of the subcommittee, I’m 

pleased to be permitted the opportunity to address you concerning 

an egregious wrong which was done to me and others and which 

has already damaged me personally, both financially and emotionally, and has the potential, unless expeditiously resolved, for greater harm. 

I will provide you testimony about my enrollment in the wrong 

Federal retirement system as an employee of the Department of 

Energy, Office of the Inspector General. I was first hired as a first 

time Federal employee as a criminal investigator by the Inspector 

General on December 24, 1984, and was placed in the Civil Service 

Special Retirement code C system. 

As a criminal investigator I was subject to a 7.5 percent CSRS 

deduction. With the enactment of the Federal Employees Retirement System Act I should have been transferred to FERS effective 

January 1, 1987. I was not transferred into FERS but continued to 

be classified as an employee covered by CSRS. 

On August 13, 1987, personnel officials advised me that I had 

the option of electing to participate in FERS or remain in CSRS. 

I chose to remain in CSRS. From that date my lifestyle and investment planning was based on a CSRS retirement. 

A year later, on March 6, 1988, I was reassigned from the criminal investigator series to a program analyst series. This change 

should have required a reduction in my CSRS withholdings from 

7.5 to 7 percent and a refund of the 5.5 percent that had been withheld. 

However, after the change my retirement code remained CSRS 

special code 6, and payroll continued to deduct 7.5 percent, although according to OPM I was not eligible for coverage under 

CSRS offset. My pay statement for pay period ending April 6, 1991, 

indicated that my retirement coverage had been changed to the 

civil service offset code C. 

In April 1996, OIG personnel officials advised me that I had been 

improperly placed in the CSRS and that my retirement classification would be retroactively changed to FERS. I was officially notified of the change in a memorandum dated June 25, 1996, from the 

OIG personnel office. 

I was also advised that I could retroactively adjust the amount 

that I had contributed to the Thrift Savings Plan. In an effort to 

raise the funds needed to make these retroactive contributions, I 

sold my home. I was later advised by DOE that I had been given 

incorrect information regarding my ability to make retroactive contributions to the TSP. 

DOE determined that adjustment to the TSP could be made over 

an 8-year period. On December 9, 1996, I made the first payment 

to my TSP. I withdrew $4,936 from savings and forwarded it to the 

Department of Energy. DOE also reminded me that in order to 

29

completely fund my TSP I would be required to remain in Federal 

service with no breaks for an additional 8 years and make the remaining seven lump sum payments. I would be required to provide approximately $35,000 over 8 

years in order to get TSP matching funds from the Department of 

Energy. My wife and I have completely rearranged our lives and 

financial planning in an attempt to meet these requirements. 

Between April and July 1996, I had many contacts with the Inspector General and Department of Energy personnel as well as 

OPM. All advised me that resolution of this matter would require 

congressional or legal action. OPM advised me that they were 

aware of only a few people who were impacted similar to me. 

To protect my interests I retained legal counsel in May 1997, and 

my attorney filed an administrative tort claim seeking restitution 

for the financial impact of being placed in the wrong retirement 

system. And on July 28, 1997, I filed a lawsuit seeking full restitution in the U.S. District Court in Washington, DC. 

The uncertainty of my retirement and future lump sum payments to the TSP has created a great deal of emotional stress and 

strain on my wife and me. We are bitter and frustrated about this 

matter and how it has been handled, and the fact that we have had 

to spend a great deal of our savings on legal and expert witnesses. 

Over 2 years ago Congress tasked OPM to explore the extent of the 

problem and to draft legislation that would correct the problem. 

OPM has failed. 

OPM continues to ignore the problem and has failed to responsibly address the matter. I believe that Congress should no longer 

wait for OPM to address the problem. Congress should immediately 

enact legislation that would correct these wrongs and grant relief 

to innocent Government employees caught in this situation. 

Congress should direct each agency which erroneously enrolled 

an employee in the wrong retirement system to bear the expenses 

of getting the employee whole, to include completely funding the 

TSP, and do so immediately. For those of us who have retained 

legal counsel, I believe we are entitled to full restitution to the 

amount specified in the lawsuit. 

With respect to the subcommittee’s request for review as to the 

necessary changes in the law, I am providing a copy of the July 21, 

1997, two-page letter to my attorney, Thomas J. O’Rourke, from 

Sanford J. Parnes, counsel to the Inspector General. 

I ask that this letter be identified and received as an exhibit. Mr. 

Parnes asserts that the Department of Energy’s authority to pay 

my claim for damages is a threshold issue that must be addressed 

prior to entering specific mediation over amounts potentially owed. 

In other words, DOE cannot even discuss the dollar amount of 

damages until he is satisfied there is legislative authority to pay 

it. 

Although I believe that this subcommittee would have greatly 

been assisted if DOE had been willing to negotiate specific damages, Mr. Parnes believes there is a need for additional legislation 

that expressly confers authority for Federal agencies to pay such 

damages. 

Mr. Parnes makes several related statements to indicate a need 

for Federal legislation in order to correct the problem that I and 

30

other Federal employees are facing as a result of being 

misclassified as CSRS rather than FERS employees. 

Thus, Mr. Parnes reports that the Department of Justice must 

preapprove payments under the Federal Torts Claim Act. And DOJ 

has said it will not approve payments under the Federal Torts 

Claim Act for these purposes. 

It seems to me that the Federal Torts Claim Act needs to be 

amended to allow injured Federal employees like myself a form of 

redress. Mr. Parnes also cites a February 1989 decision of the 

Comptroller General which states that, ‘‘The Department of the Interior is without authority to make payments to employees’ Thrift 

Savings Plan accounts for lost earnings on issues of deficient agency contributions resulting from administrative error because earnings on contributions are a form of interest not expressly provided 

for by interior appropriations, and such payments are not otherwise authorized under the back pay act.’’

Again, speaking as a lay person, it seems to me that this Comptroller General’s decision points to the need for appropriate legislation as well as legislation amending the back pay act. 

Mr. Chairman, this concludes my testimony. On behalf of myself 

and my fellow Federal workers who are affected by this hard situation, I would like to thank you and the members of the subcommittee for this opportunity to appear and discuss this important issue. 

I would also like to thank many of the Department of Energy 

and Inspector General employees for their support throughout this 

ordeal. I look forward to answering any questions you and the subcommittee members may have. Thank you. 

[The letter referred to follows:]

31


g:\graphics\46343.014
32


g:\graphics\46343.015
33

Mr. MICA. I thank you for your testimony. And I think we’ve 

heard testimony from all of our witnesses. They’ve literally been 

through Hell in this matter. It’s embarrassing for the Government 

in bungling in such dramatic proportions to each of you personally. 

Mr. Schrum, did you testify—and let me get this straight—that 

you were advised that you could make a lump sum payment, and 

you sold your house? 

Mr. SCHRUM. Yes. 

Mr. MICA. And then, after that, you were told that you couldn’t 

make that payment? 

Mr. SCHRUM. Yes, Mr. Chairman, I was. 

Mr. MICA. So you sold your residence on advice from Federal personnel? 

Mr. SCHRUM. From my personnel office—told me that I could 

make the lump sum payment of some approximately $35,000. And 

then after I sold the house the Department of Energy’s payroll people, personnel people came back and told me that it was incorrect, 

that I could not make such a payment. 

Mr. MICA. Unbelievable. Mr. White. 

Mr. WHITE. Yes, sir. 

Mr. MICA. Mr. White, you called the personnel office, you said. 

Now, your situation goes back to when, 1984? 

Mr. WHITE. Yes, sir. I was hired in August 1984. August 26, 

1984. 

Mr. MICA. And there was some review, we understand, of your 

case, of your personnel situation in 1991? 

Mr. WHITE. Yes, sir, in April 1991. 

Mr. MICA. There was no problem identified. In 1996, you called 

your personnel officer. And what did he say? 

Mr. WHITE. In 1996, the only way that this came about or was 

detected—and I must interject real quick, I’m glad it was 

caught——

Mr. MICA. This is when you got a notice? 

Mr. WHITE. I had requested that my personnel file be reviewed 

to determine how much it would cost me to pay for deposit for my 

military time. During that review, they detected, ‘‘This guy’s in the 

wrong retirement system.’’ And they sent the appropriate standard 

form 50’s over to finance to effect that change in February. I did 

not find out about it until a month later, until I received my leave 

and earning statement and I noticed the difference between the 

two balances, the former——

Mr. MICA. Is that in 1996? 

Mr. WHITE. Yes, sir. And that was——

Mr. MICA. So you called your personnel office? 

Mr. WHITE. I’m the one that initiated the contact with my personnel office. 

Mr. MICA. Right. And what did the personnel officer say? 

Mr. WHITE. They were sorry. They had been meaning to contact 

me a month ago, but they had been dreading the call, quite frankly, ‘‘since you’ve asked.’’ That was the quote/unquote comment. 

Mr. MICA. His comment was? 

Mr. WHITE. ‘‘I have been dreading this call for a month, Al.’’ That 

was the response that I got. 

34

Mr. MICA. Was someone else trying to comment on their particular situation when I was talking to the first witness? No. OK. 

I didn’t want to ignore anyone; I thought someone was trying to get 

my attention. 

Have any of you received a full accounting of funds that were in 

your CSRS account before corrections to your enrollment were 

made? Have you? 

Mr. SCHRUM. No, sir. I have not. 

Mr. MICA. Mr. Gabrielli. 

Mr. GABRIELLI. No. 

Mr. MICA. Mr. Mangam. 

Mr. MANGAM. I received a full accounting of what funds were 

there and what the distribution of those funds were made to date. 

But not all of those funds have been distributed. 

Mr. WHITE. And I have not to this date. 

Mr. MICA. You have not. And it’s my understanding that legislation was introduced in 1995. 

Mr. WHITE. 1995. 

Mr. MICA. And that legislation possibly would have resolved this 

problem. And it’s my understanding also that OPM opposed this 

legislation. Is that your understanding also? 

Mr. WHITE. Yes, sir. That’s what I was told. 

Mr. MICA. OK. Now, one of the purposes of this hearing is to find 

a solution. And one thing that’s been recommended to me is that 

you all be placed back into the old system—CSRS. Would that be 

acceptable, Mr. White? 

Mr. WHITE. Sir, based on the harm that I’ve incurred right now, 

had I been in FERS from day one, that would have been better for 

me. Had I known from day one—I mean, the calculations now. 

At the time that’s what I wanted. But with the accounting or 

lack of accounting of my civil service trust fund right now, I would 

like to get whole in FERS. That would be my first option. If that 

were not an option—since they’ve already made the change. That’s 

what I would prefer personally. 

Mr. MICA. Mm-hmm. 

Mr. WHITE. Because it has been very traumatic for me. And for 

me to go back now. I would prefer that option if given that option. 

Mr. MICA. Each of these cases have different levels of trauma. 

Mr. WHITE. Sure. 

Mr. MICA. For Mr. Schrum, I mean, to sell his house. 

Mr. WHITE. Sure. 

Mr. MICA. And then be told you could put the money in to make 

it up and then be left in that situation is mind-boggling. I know 

each of you have different degrees of anxiety about this. Mr. 

Mangam, would this be acceptable? 

Mr. MANGAM. Since that’s what I originally expected out of this 

employment contract, that would be fine with me as long as my 

other costs were taken care of and things were converted. 

Mr. MICA. Mr. Gabrielli. 

Mr. GABRIELLI. Again, at the time I wanted to stay in CSRS because I compared the two systems. But now I have invested in the 

Thrift Savings Plan. I think I would prefer to stay in FERS, but 

only with the condition that I could have my CSRS contributions 

put in there with matching funds and interest that would have acVerDate jul 14 2003 11:24 Dec 03, 2003 Jkt 010199 PO 00000 Frm 00038 Fmt 6633 Sfmt 6602 W:\DISC\46343 46343
35

crued since 1987, when I would have been eligible to join the TSP 

had I known I was in the new retirement system. 

In my statement I indicated that I think we should have the option to choose between the two. I think there’s going to be a lot of 

administrative nightmare to figure out all the matching funds. If 

I was to go back to CSRS they’d have to take back the matching 

funds and all the interest that generated over the last few years. 

I’d still like the option, you know, after it was planned out, how 

it would—the smoothest possible transition. Then I would make a 

choice at that time. But——

Mr. MICA. Thank you. Mr. Schrum. 

Mr. SCHRUM. I would not want to go back. I would like to just 

remain where I am. I’ve already started making my contributions. 

I just would like to be made whole and remain where I am and not 

have to have this burden of worrying about the next 8 years of having a RIF. Because if I have 1 minute of break in Federal service 

my wife loses all my benefits. 

Mr. MICA. Well, it doesn’t sound like there’s a simple solution. 

And each of the individuals involved just before us, and the dozens, 

probably hundreds and maybe thousands of others, have made different plans or are affected differently as far as Social Security, 

Thrift Savings, their plans to enter FERS or other retirement arrangements. So we’ve got a very complicated situation that may require a number of legislative and administrative remedies. 

I will yield now to Mr. Cummings, our ranking member. 

Mr. CUMMINGS. I want to thank all of you for being here. As I 

was sitting here I was saying to myself, I wish the agency people 

could sit where we’re sitting so that we could see the pain on your 

faces. 

And it really—I could see when Mr. Schrum was testifying, I 

could see the pain on your face, Mr. White. It was very clear. So 

we’re going to try to find a solution to this. 

But let me just ask you all a few questions. Mr. White, when you 

were testifying and you read the letter of Deborah Monroe? 

Mr. WHITE. That is correct. 

Mr. CUMMINGS. I take it that you all know each other. She referred to Mr. Schrum. Can you tell me—I take it that that’s accurate? 

Mr. WHITE. Yes, sir. 

Mr. CUMMINGS. And how did you all come together? 

Mr. WHITE. This was prompted as a result of the first Federal 

Times article that was on July 1, 1996. That’s when I went public 

with this issue. I knew that I wasn’t the only one. And I knew that 

there weren’t only a few impacted. I suspected more. 

And I was told by the Federal Times that there were other employees. So they ran an article. So as a result of that I got literally 

hundreds of calls from all over the world, all over the world. My 

name was mentioned in there as well as my phone number. That’s 

where I met Mr. Barry Schrum and Deborah Monroe. 

And the original three of us have been together telephonically. 

Today was the first time that I’ve ever met Barry Schrum, although I feel like he’s a brethren. Same thing with Deborah Monroe. I feel like she’s a sister of mine. 

36

I mean, we’ve been through Hell, quite frankly, over the last 18 

months trying to figure out what it is we need to do to get this 

thing fixed. And I extremely feel sorry for her, because, as she 

mentioned, she’s run into a number of stumbling blocks and has no 

one to help her there. 

At least some of us had some experience, Barry and I, in what 

we thought we needed to do to pursue this in the most logical, professional, but yet administratively correct process. Deborah did not. 

But we were there from day one with her. And we’ve gone 

through countless hours of reliving the emotional things, how your 

life is turned upside down. In things like this, it’s just been a tremendous relationship, not necessarily that we wanted it to come together because of this situation, but it’s just unfolded and evolved. 

And that’s why she wanted us to read her testimony. 

Mr. CUMMINGS. You had testified that this whole situation has 

cost $2 million. Can you give us an idea of how you came up with 

that figure? 

Mr. WHITE. Yes. I’d be more than happy to. When asked would 

I want to transfer now, this is why I mentioned that. Had I been 

appropriately placed in FERS from day one, with the amount that 

I could have contributed, the full 10 percent plus the pre-tax profit, 

I would have gotten more each year as far as real income, not to 

mention the 5 percent matching funds. 

And had I invested in the C fund, which I’m currently doing, for 

the brief time I’ve been in FERS, over the lifetime, based on my 

salary as a Federal law enforcement officer—as you’re aware, I can 

retire earlier. So the impact, I pay more up front. 

But the consequence to me, for example, just up front, is a difference of 30 percent in annuities under FERS versus CSRS. Right 

off the bat it’s 30 percent. Now, had I been able to contribute fully 

to age 50 or even 57, collectively that’s the combined impact pretax—which this amount has been confirmed by an industry expert 

that provides these type of monetary damages both to the Government as well as to the private industry. That’s why this amount 

is very significant to me and why I’d prefer to stay in FERS. 

Mr. CUMMINGS. Your dealings with OPM have not been good, 

have they? 

Mr. WHITE. No. Not at all. My contact with them—and I’ve been 

around a long time. And I understand that everything doesn’t 

revolve around a single individual. But I would expect that if a 15 

had contacted you, you would take it a little bit serious, as a senior 

Federal employee, and at least address this issue, recognizing that 

not that it just affected me, but it affected a number of people. 

But I didn’t get that. They pointed the finger at Congress. And 

it just became something that was the same old song and dance. 

I got a number of form letters back, even from President Clinton—

it’s the same form letter I got back from the Office of Personnel 

Management, the only difference was, on behalf of the President, 

we’d like to thank you. 

But the bottom line was, it was my problem, my agency caused 

it, there’s nothing we can do, and we’re looking at coverage errors; 

we’re studying the problem. 

Mr. CUMMINGS. How high up did you go in OPM, do you know? 

37

Mr. WHITE. I went—I don’t know what his grade is—but I went 

to the Chief of Retirement Policy Division, Mr. John Landers. Actually, his boss, too, I originally talked to at the recommendation of 

my Congressman, Congressman Ron Packard, was Mr. John 

Panagakos. 

I made him aware of the problem in April 1996. That’s when I 

had the first dialog with him. 

Mr. CUMMINGS. April 1996? 

Mr. WHITE. Yes, sir. April 1996. And that’s when I was advised 

that there was basically nothing that they could do. They were 

studying the problem. It was going to take a congressional fix. 

Repeatedly I asked, please, that’s one thing I would like to 

know—we didn’t jump from a to z on this. We went through the 

entire process from MSPB, OPM. 

Mr. CUMMINGS. So in other words, you were trying to work with 

him? 

Mr. WHITE. Absolutely. From start to finish. What do we need to 

get this problem fixed? We got nowhere. And, again, we got the 

standard reply form letters which not only me but my colleagues 

got back, as well, saying, ‘‘It’s not our problem. We’re studying it.’’

I asked Mr. Landers as recently of February this year. I said, 

‘‘When do you think you will have legislation drafted?’’

‘‘I don’t have any idea. We’re waiting on the administration.’’

I said, ‘‘Aren’t you a part of the administration?’’

He said, ‘‘Yes. But I have no idea, Mr. White.’’

I said, ‘‘So, what you’re telling me is that I have no recourse but 

to file legal action.’’

He said, ‘‘Well, it sounds to me like that’s your only recourse.’’

Which was rather unfortunate. But that’s where I’ve been in my 

agency, even though they made the original wrongdoing in this. 

They relied on OPM to provide them guidance on this. And they 

have not got the same two answers twice, either. 

Nor have they even been responded to. They wrote them in July 

of last year, in 1996, and my IG never got a response back from 

them also. So I’m not the only one who is being shunned on this 

particular issue. I mean, you have a Presidential appointee that 

doesn’t even get a response back. Something is wrong. And, of 

course, obviously Congresswoman Morella hasn’t got a response, either. So that’s rather indicative of how people are treated. So——

Mr. CUMMINGS. Mr. Schrum, let me ask you just a few questions. 

You testified that OPM Director King opposed Senator Leahy’s bill, 

is that right? 

Mr. SCHRUM. Yes. 

Mr. CUMMINGS. Were you given any reasons for that, do you 

know? 

Mr. SCHRUM. The only response—I have never—I have made numerous calls to OPM. I stay in touch with Alan. And the reason 

I know that is the documentation that he got and what we found 

out about Senator Leahy’s bill. They’ve never even had the decency 

to respond back to me even on a telephone call. 

Mr. CUMMINGS. Hmm. 

Mr. SCHRUM. My Congresswoman, she wrote the letter. And, obviously, they didn’t think that was important, either, so they never 

responded back to her. 

38

Mr. CUMMINGS. This is very painful for you, isn’t it? 

Mr. SCHRUM. Yes, it is. 

Mr. CUMMINGS. Mr. Gabrielli, you indicated that the Treasury 

Department told your agency, IRS, that OPM was unwilling to seek 

a legislative solution. Were you given any reasons for that? 

Mr. GABRIELLI. No, I wasn’t. 

Mr. CUMMINGS. Hmm. 

Mr. GABRIELLI. I’m not aware of any reasons. 

Mr. CUMMINGS. I’m sorry, were you finished? 

Mr. GABRIELLI. Yes. 

Mr. CUMMINGS. Oh, I’m sorry. Let me just ask you one last question. Mr. Mangam, am I pronouncing that correctly? 

Mr. MANGAM. That is correct. 

Mr. CUMMINGS. You testified that the error made in your case 

will cost you more than $30,000 a year? Is that what you estimated? 

Mr. MANGAM. That is correct. 

Mr. CUMMINGS. How did you come up with that figure? 

Mr. MANGAM. Part of my retirement will be based on bringing 

my military service into my Federal combined service retirement. 

And if I were to retire at age 55 and continue to work in some 

other endeavor, then any income I made over $8,000 and some dollars a year would reduce my annuity by a like amount until I could 

get to zero. 

I had planned on working from 55 to 65 as a consultant or something else and banking, basically investing the funds between those 

years. If my annuity from the Government was to be reduced to almost zero for those 10 years, I would not be able to invest that 

money, although I would be getting the retirement of some $34,000 

in FERS versus some $49,000 in CSRS. A little bit convoluted. 

Plus I expect to live to 90 like my parents. So, with 30 years of 

real retirement on top of another 5 to 10 years of working, you can 

see how that multiplies. Thirty times $30,000 is $900,000 alone 

without taking a look at the reinvestment opportunities for 10 

years of working when I have zero annuity due to the Social Security offsets on the FERS retirement. 

Mr. CUMMINGS. Well, I just want you to know that I’m hoping 

that you live to be more than 90. And I want to be here with you 

so I can say happy birthday. 

Mr. MANGAM. Thank you. I hope so, too. 

Mr. CUMMINGS. Thank you very much. 

Mr. MICA. I thank the gentleman. I hope I can be at that party 

to blow out the candles. But I’d like to recognize, now, the 

gentlelady from Maryland, Mrs. Morella. 

Mrs. MORELLA. Thank you, Mr. Chairman. I heard Mr. White, 

Mr. Schrum mention it. But let me just ask all of you. Have any 

of you received any assistance from, No. 1, OPM, or your own agency? Have any of you been able to sit down with somebody from that 

agency who told you how they could remedy, resolve the situation, 

to give you the kind of advice, counsel that you deserved? 

Mr. WHITE. Mrs. Congresswoman Morella, OPM has provided absolutely no assistance to me. 

Mrs. MORELLA. Mm-hmm. 

39

Mr. WHITE. Second of all, once my IG became aware of this, she 

did get involved to the extent that they could. She wrote letters, 

she followed up. But they, too, had to rely on OPM for guidance, 

which—we have been provided conflicting guidance on how to handle my issue, from the funds disbursement to you name it. 

There has been no definitive guidance at all. As of today I still 

don’t know where my funds are. All I know is that some of my civil 

service funds paid my organization’s responsibility for FICA taxes, 

to what extent, I don’t know. 

Mrs. MORELLA. Mm-hmm. 

Mr. WHITE. So, again, I think the central theme or burden clearly rests with OPM. 

Mrs. MORELLA. So you get some comfort from a representative 

from your agency——

Mr. WHITE. From Ms. Eleanor Hill and Don Mancuso, correct. 

Mrs. MORELLA [continuing]. But no figures, facts, avenue, program, nothing from OPM? 

Mr. WHITE. No, ma’am. 

Mrs. MORELLA. Mm-hmm. Right. Mr. Mangam. 

Mr. MANGAM. The local agency has been very supportive in trying to ferret out information and get decisions. But they’ve relied 

on the higher agency, being Department of Army, who has gone to 

OPM and sought answers. The answers coming back are basically 

what you’ve heard read into testimony. 

It’s a problem. It’s based in law. And go seek your own resolution. And they have not provided very clear-cut policy or procedures 

in rectifying any of the transition problems that are involved in 

this. As I testified, to date they have not provided a policy of what 

to do with the residual CSRS funds, which there is, in my case, 

$32,000-some out there which has been laying fallow since last November, not gaining interest. And they have said that they will 

never pay interest on that. So it’s just laying there. 

That’s just one small example. The local command has been very 

supportive. But above that, the support policy procedure is not 

there. 

Mrs. MORELLA. Mm-hmm. Mr. Gabrielli. 

Mr. GABRIELLI. When the problem came to light, again, as I said, 

the Internal Revenue Service sought guidance through the regional 

office, and the region through the national office, and Treasury 

sought opinions from OPM. And also the district director in my district at that time had written letters on my behalf. 

The agency tried to do something. But ultimately it was OPM 

who came back and cited law that there was nothing in the provisions of law that would allow them to make any concessions to 

allow me to stay in CSRS. I never dealt with OPM directly myself. 

Mrs. MORELLA. So, basically, you got tea and sympathy from 

your agency, but no resolution. 

Mr. GABRIELLI. There was a lot of hand wringing and——

Mrs. MORELLA. Right. And no resolutions from OPM. 

Mr. GABRIELLI. Sure. 

Mrs. MORELLA. And you didn’t really deal with OPM, Mr. 

Gabrielli. Mr. Schrum, you stated that in 1987 you were given the 

option of switching to FERS, but no one told you that you were ineligible to stay in CSRS. Is that correct? 

40

Mr. SCHRUM. That is correct. 

Mrs. MORELLA. Absolutely ridiculous. So, after their initial error, 

they had another opportunity to see that they put you in the wrong 

system, but it took them several more years. 

Mr. SCHRUM. That is correct. 

Mrs. MORELLA. Correct. Absolutely unbelievable. 

Mr. SCHRUM. And in 1991 they again put me in the wrong retirement system when they put me in the civil service offset. So that 

was what? The third time? 

Mrs. MORELLA. I want to thank all of you for being here, because 

it’s difficult. You’ve been victimized already by the system, and 

then to come and to reiterate all of that, to go through it all again, 

is pretty anguishing, and I appreciate it. 

Now, some of you have filed lawsuits and some of you have not. 

What do you hope to get from the lawsuits? 

Mr. WHITE. Personally, what I hoped to get from the lawsuit was 

to be made whole. Since I had already been changed to FERS—and 

that’s in response to Congressman Mica’s comment. That’s the 

track that I’m pursuing now. I’ve accepted the fact that’s what I’m 

in. And I expect to get whole. 

I expect to get compensated fully. And I don’t know what sort of 

restitution I would get for emotional strain and anguish, but I have 

followed this from—again, going through every legitimate process 

possible which has forced me now to take legal action to do that. 

So whatever the court decides is appropriate to address my particular situation as well as—there’s four others of us—then so be it. 

But we’ve been out an extensive amount of money—legal fees— 

to get just to this point. Not to mention expert witness fees. Which, 

you talk about outrage. That outrages me more than anything, that 

I had to spend my own money to sue to get to where we are today. 

That outrages me more than anything. 

Mrs. MORELLA. Have your attorneys given you any idea of how 

long the case would take? 

Mr. WHITE. No. We had no idea. Monday—the statute ran out for 

me on Tuesday of this week. We waited until the last possible 

minute. And Monday it was filed. The 28th—this Monday. 

Mrs. MORELLA. Any of the rest of you who have attorneys like 

to comment on that? What you hope to gain from it? How many 

of you have attorneys? You also? 

Mr. MANGAM. I also have an attorney. But my goal is to get 

whole, whether that is returning back into CSRS and return of the 

funds that have been—my word—absconded with, and made whole 

monetarily and put back into the CSRS. Failing that, then I need 

to protect my family and myself and my continuing life. And so 

that’s my goal. And it will cost money. But I hope that the restitution will happen. And I’ve been told that it can take 1 to 2 years. 

Mrs. MORELLA. One to two years. Mr. Schrum, you hired an attorney? 

Mr. SCHRUM. Of course, my attorney is Mr. White’s attorney. 

Just like Alan said, I want to be made whole. 

Mrs. MORELLA. Mr. Gabrielli, you did it through the union. Do 

you have an attorney? 

Mr. GABRIELLI. No. 

Mrs. MORELLA. You didn’t, did you? 

41

Mr. GABRIELLI. No. Frankly, I don’t have the means to pursue 

this through the courts. I just don’t have the means. 

Mrs. MORELLA. That was what I was going to ask. Why did you 

not. Any other comments that you’d like to make that we haven’t 

asked that you think link up to our resolution of this? You know, 

we’re going to have the agencies, as you know, right after this 

panel—are going to testify. 

Mr. WHITE. Mm-hmm. 

Mrs. MORELLA. Is there something you want us to ask them besides the fact, why did you do this, what are you going to do about 

it, look at what you’ve done to people’s lives? This is your last shot. 

Mr. WHITE. It’s not so much a question as it is a recommendation 

that I think, based on the seriousness of the situation and the responsiveness of the Thrift Savings Investment Board, that they 

should be the one that should monetize the impact. 

Mrs. MORELLA. Mm-hmm. 

Mr. WHITE. Look at this issue as opposed to OPM. It’s clear it’s 

not a high priority issue. It’s something that TSP—the Thrift Savings Investment Board—was acutely aware of in 1991, made OPM 

aware of this. I throw that out as a recommendation that, I think, 

to follow Mr. Cummings’ comment. 

If you want a time table, I think that organization would respond 

and would be able to monetize the impact very quickly and get you 

the answers you need for those who have been harmed. 

Because there are literally thousands who don’t even know. And 

there are some right now that know that have not been transferred 

to FERS. I’ve received dozens of calls from fellow law enforcement 

officers that were hired in 1985 that say, ‘‘I am still in CSRS, and 

my organization has not transferred me yet. What should I do?’’

You know, I’ve just told them to stay tuned, hopefully Congress 

can get to this. Which, leaving them in CSRS would be the answer 

for those people. But for those of us who have come out of the 

woodwork, so to speak, and have had to go through this——

Mrs. MORELLA. You mean, some have been changed because they 

were incorrectly kept in CSRS and then changed to FERS, some 

who have been changed don’t even know they have been changed? 

Mr. WHITE. Don’t even know. 

Mr. SCHRUM. That’s right. 

Mrs. MORELLA. Others have not even been changed that have 

gone beyond that time limit? 

Mr. WHITE. That’s correct. 

Mr. SCHRUM. Right. 

Mr. WHITE. There are many other——

Mrs. MORELLA. It’s a total flub-up. 

Mr. SCHRUM. Yes. 

Mr. WHITE. Yes, ma’am. And there are people that are aware 

they’re in the wrong system because of reading the Federal Times 

and articles in the Federal law enforcement officers association 

that know that they’re in the wrong system based on what I have 

advised them, but their organization has not detected it yet. 

So they’re in a precarious situation. What do I do? Do I notify 

them? They don’t want to wait until the day they walk out the door 

to have this detected. So that’s why, again, I applaud all of you for 

having these hearings. It’s so timely, so critical. 

42

And if it doesn’t get resolved now the problem is going to be so 

costly for the Government either through litigation or just downright getting people whole at some point in time. It needs to be 

fixed, and fixed now. 

Mrs. MORELLA. Anyone else want to make any comments? Then 

I yield back my time. Thank you, Mr. Chairman. 

Mr. MICA. I thank the gentlelady. I am going to dismiss this 

panel. But I want to thank—I think Mr. White and Mr. Schrum 

have also helped Deborah Monroe with some of her legal expenses. 

Mr. WHITE. Yes, sir. 

Mr. SCHRUM. Yes. 

Mr. MICA. That’s most admirable. And I understand NTEU has 

helped support you and also bring you here today, Mr. Gabrielli. 

And we’re grateful for their cooperation so we can show this committee and Congress the direct effect that this has had on some of 

our employees and how it has affected them personally. 

And I might say also, to you, Mr. Schrum, and others that have 

been so dramatically personally affected, that the system does 

work. Sometimes it does take some time. 

Mr. SCHRUM. Mm-hmm. 

Mr. MICA. You’ve tried to work through the system. And we appreciate that. And through your representatives. We will find a solution to this problem. And sometimes it’s slow and cumbersome. 

And it takes a while to get to us and get our attention. 

But do hang in there and have faith. And we’ll try to make you 

and your retirement benefits whole. So we thank you for your cooperation and appreciate your being before the subcommittee this 

morning. I’d like to call our next panel. You’re excused. 

Mr. WHITE. Thank you. 

Mr. MICA. Our next panel this morning is William Flynn, who is 

the Associate Director of the Retirement and Insurance Service of 

the Office of Personnel Management, Sarah Hall-Ingram, Associate 

Chief Counsel, the Employee Benefits/Exemption Organizations of 

the Internal Revenue Service, Dr. Diane Disney, Deputy Assistant 

Secretary of Civilian Personnel, the Department of Defense, and 

Linda Oakey-Hemphill, who is an agency retirement counselor with 

the Department of the Treasury. 

Some of you have been with us before and know that this is an 

investigations and oversight subcommittee of Congress. We do 

swear in our witnesses. If you would please stand, and raise your 

right hands. 

[Witnesses sworn.] 

Mr. MICA. The witnesses answered in the affirmative. We’re 

going to go directly first to Mr. Flynn and then we’re going to intervene for some quick questions because our ranking member must 

leave. But Mr. Flynn, you’re recognized. 

43

STATEMENTS OF WILLIAM E. FLYNN, ASSOCIATE DIRECTOR, 

RETIREMENT AND INSURANCE SERVICE, OFFICE OF PERSONNEL MANAGEMENT; SARAH HALL INGRAM, ASSOCIATE 

CHIEF COUNSEL, EMPLOYEE BENEFITS/EXEMPTION ORGANIZATIONS, INTERNAL REVENUE SERVICE; DIANE DISNEY, 

DEPUTY ASSISTANT SECRETARY, CIVILIAN PERSONNEL, DEPARTMENT OF DEFENSE; AND LINDA OAKEY-HEMPHILL, 

AGENCY RETIREMENT COUNSELOR, DEPARTMENT OF THE 

TREASURY 

Mr. FLYNN. Thank you, Mr. Chairman and members of the subcommittee. On behalf of Jim King, the Director of OPM, we appreciate the opportunity to be here today to discuss the subject of erroneous enrollments in the Federal retirement systems. 

As you’ve pointed out, Mr. Chairman, in the Senate committee 

report attached to the Treasury, Postal Service and General Government Appropriations Act of 1996, OPM was directed to review 

the problem of employees who have been placed in the wrong retirement system. 

Now, in addition to OPM, a solution to this problem affects the 

policies and operations of the Federal Retirement Thrift Investment Board, the Social Security Administration, and the Treasury 

Department. 

Before our report can be issued more discussions with those 

agencies on an approach to this issue are needed. I’m hopeful that 

we’ll be able to present our report, including recommendations for 

a legislative solution to the Congress in the near future. 

Nonetheless, at today’s hearing I would like to share with the 

subcommittee our perspective on this problem as well as the general objectives we believe should be sought in molding a remedy. 

Retirement coverage errors are generally the result of difficulties 

government agencies have experienced in the still-ongoing transition that began in 1984 from the Civil Service Retirement System 

[CSRS] to the Federal Employees Retirement System [FERS]. As 

you know, two sets of statutory transition rules must be applied. 

Both contain various exceptions to Social Security coverage. And 

one set of rules required retroactive amendments to coverage determinations made during a period of time in 1984. The statutes also 

created the hybrid retirement system known as CSRS offset. 

When agencies find a mistake in an employee’s retirement coverage, they are required by the law to correct it currently. After 

discovery of a coverage error, the law requires that an employee’s 

defined benefits coverage, including Social Security, be fully corrected with retroactive amendments to retirement records and reallocation of employee and agency contributions. Coverage errors 

that negatively affect the employee’s defined contribution plan participation are those that may in fact disadvantage the employee, as 

you’ve heard today from the witnesses earlier. An employee’s participation in the Thrift Savings Plan is a matter of personal choice 

affected by the employee’s available income and personal retirement planning. Those decisions, in turn, rely on correct coverage 

determinations by the employer. 

Now, apart from the 1 percent government contribution and its 

associated earnings, which must be deposited for all employees covered in the Federal Employees Retirement System, regardless of 

44

whether or not the employee contributes; the total amount of the 

agency’s make-up contribution when errors are discovered depends 

on the employee’s past contributions to the Thrift Savings Plan and 

his or her future salary withholdings to make up for the period of 

the erroneous coverage. 

This approach to making an employee whole after retirement 

coverage error has been determined has significant gaps, again, as 

you have heard from the witnesses earlier this morning. First, because it relies on future salary withholdings, an employee whose 

coverage error is discovered upon separation does not have an opportunity at all to make up lost contributions. An employee who 

does not have income available for this purpose can be similarly affected. Second, if an employee did not participate in the Thrift Savings Plan during the period of the error, retroactive earnings on 

make-up contributions are calculated using the G fund as opposed 

to the other fund rates of return. And third, some highly paid employees may be unable to maximize their Thrift Savings Program 

benefits due to the tax code’s elective deferral limitation that applies to such contributions. 

This is a general outline of the problem. OPM does believe that 

a comprehensive solution is desirable, one that addresses situations 

in which a long-term coverage error has been corrected as well as 

those in which the error has not yet been discovered. 

In addition, we believe the solution should address current and 

former employees and retirees and survivors since members of each 

group have been affected by retirement coverage errors. 

I would like to lay out for the subcommittee our major objectives 

for this remedy. OPM recognizes that some employees have been 

truly disadvantaged by being placed in the wrong retirement system. 

Our first and most important objective is that a remedy should 

demonstrate that the Government is committed to an equitable solution for these employees and their families. Because retirement 

planning is a career-long affair, a long-term error can be truly 

harmful. This is the case where an employee misclassified as Civil 

Service Retirement System or offset must be retroactively switched 

to the Federal Employees Retirement System, but because of the 

error did not save for retirement to supplement the defined benefits 

of FERS and Social Security benefits. 

Our second major objective is to provide employees with a choice 

between corrective coverage and a benefit the employee reasonably 

expected to receive. Employees should not simply be forced to retain erroneous coverage following discovery of a long-term error. 

Some employees who have been misclassified as Civil Service Retirement System or offset may prefer a benefit equivalent to what 

they have come to expect. But an employee who contributed a significant amount to the Thrift Savings Program may feel equally 

strongly that retaining Federal Employees Retirement System coverage would be beneficial. And you’ve heard some comments to that 

effect, again, from the witnesses earlier this morning. 

Our third objective is that the options provided to employees 

should be easy to understand. Both for the people who must counsel employees and for the affected individuals, we should avoid 

complex rules, conditions, and exceptions. 

45

I trust that we can build a choice that leaves each individual 

with a clear understanding of his or her retirement coverage, enabling him or her to plan for their income security in retirement. 

In conclusion, Mr. Chairman, I expect that a proposal for a comprehensive remedy to the current problem will be sent to the Congress in the near future. In the meantime, I hope this information 

has been helpful, and I’d be glad to answer any questions the subcommittee may have. 

Mr. MICA. Thank you for your testimony, Mr. Flynn. We’re going 

to break from our regular order. Our ranking member has another 

commitment. But I’m going to yield to him for questions, at first, 

to you. 

Mr. CUMMINGS. Mr. Chairman, I want to thank you for your 

courtesy and thank you for yielding. And, to our witnesses, unfortunately I’ve got another matter that I’ve got to get to. And to the 

witnesses on the first panel., I echo the sentiments of our chairman. We will find a solution. I promise. 

Mr. Flynn, let me ask you something. You said something just 

a moment ago that, when you first started about finding a solution 

to the problem, and I think you said something about the near future? 

Mr. FLYNN. Yes, sir. 

Mr. CUMMINGS. One of our members on the other side talked a 

little bit earlier about how deadlines are met and deadlines are 

broken. And when those deadlines are broken every time they’re 

broken it affects somebody’s life. Here we don’t even have a deadline. And I’m just wondering when can we expect resolution. 

These people and people in like circumstances I can imagine 

when they heard ‘‘near future,’’ they probably almost slid down in 

their chairs and said, ‘‘Not again.’’

And I don’t think that either side—and this is bipartisan, by the 

way—either side wants to be part of a conspiracy where nothing 

happens. You follow what I’m saying? 

Mr. FLYNN. Yes, sir. 

Mr. CUMMINGS. And so when will we be effective, can you give 

us an idea of what we’re talking about date-wise? 

Mr. FLYNN. I believe I can. 

Mr. CUMMINGS. And what is blocking us from getting there? How 

long have you been working on this problem? 

Mr. FLYNN. We’ve been working on this problem about 18 

months since the Senate appropriations committee report requested recommendations from us. 

Mr. CUMMINGS. OK. Was a deadline set then? 

Mr. FLYNN. We were expected to have completed that in January 

of this year, Mr. Cummings. 

Mr. CUMMINGS. OK. So you see what I’m talking about. 

Mr. FLYNN. Exactly. 

Mr. CUMMINGS. It’s now, we’re about to go into August. And so, 

I guess what I want to know is, what has blocked you from getting 

to a solution and some kind of date by which we can expect a solution? 

Mr. FLYNN. I know, Mr. Cummings, that you have to leave in a 

minute. I’ll try to answer that very shortly. We fully expected to 

be able to issue a report in January 1997, earlier this year. There 

46

were two court cases that had a direct bearing on this issue that 

were decided that did, in fact, alter and influence the way in which 

our recommendations were going. 

We are close. I would expect that we can complete the consultations that we need to complete with the affected agencies—the Federal Retirement Thrift Investment Board, Social Security, and 

Treasury—and I’m hopeful, Mr. Cummings, that we can do that 

within the next 30 days. 

Mr. CUMMINGS. Well, we come back here what? Early September? 

Mr. MICA. The 3rd. 

Mr. CUMMINGS. Yes. So you actually have 2 or 3 extra days. So 

I hope that you do that. You said something about—when you were 

talking about your objectives—and I think you were sort of talking 

about the parameters of your trying to find a solution. 

Mr. FLYNN. Yes, sir. 

Mr. CUMMINGS. You said the words, something to the effect that 

you’re trying to get these Federal employees who had been victimized—those are my words—these were yours—what funds that they 

reasonably expected to receive. Is that a difficult thing to calculate 

for you? You follow what I’m saying? 

Mr. FLYNN. It is not a difficult thing to calculate with respect to 

a current employee who is currently working for the Federal Government. It becomes more difficult, Mr. Cummings, when we look 

at all the different types of employees that we have here and their 

current status in life. 

Mr. CUMMINGS. Mm-hmm. 

Mr. FLYNN. If I could, just very quickly, as you’ve heard, we do 

know of a number of employees where errors have been identified 

and where subsequently the employees have been placed in the correct system. Those are the individuals that we know about. 

We also know that there are individuals who are in the incorrect 

retirement system now and their agencies or they have not yet 

identified that. Those are current employees. We have separated 

employees, some of whom have left their contributions, who are 

waiting for either a return to Federal employment after a period 

of private employment, or who may be, in fact, waiting to elect a 

deferred annuity at age 62. 

In addition to that we have some retirees who are also affected 

by this. And in addition to that we have survivors of retirees who 

are affected. Providing those other types of individuals with 

choices, one of which might give them a benefit that they would 

have reasonably expected to receive is a somewhat more difficult 

matter, but we can get there. And we will. 

Mr. CUMMINGS. Do you think that this is something that requires 

congressional action or can this be administratively addressed? Or 

do we have to have a combination of both? 

Mr. FLYNN. Mr. Cummings, the solution that we are talking 

about the parameters of here would require legislative action and 

probably some administrative action as well. I do know that we 

have used in our view, and in the views of agencies, as much of 

the administrative flexibility that is available within the current 

system. 

47

So this is primarily going to be a legislative proposal that will 

then entail some administrative action after that. 

Mr. CUMMINGS. There have been some estimates by, I think Mr. 

White, about how many people are affected by this. Can you—were 

those figures accurate? Did you hear his testimony? 

Mr. FLYNN. Yes, I did, Mr. Cummings. 

Mr. CUMMINGS. OK. 

Mr. FLYNN. I can tell you that there is no single source of information on how many error situations have occurred. That is because there is simply no mechanism to track that. We do have anecdotal information from departments and agencies with whom 

we’ve worked on correcting these errors over the years that suggest 

different numbers for different departments and agencies. 

In the aggregate, let me try it this way. I can tell you on the 

basis of everything that I have seen that the overwhelming number 

of participants in the retirement systems we administer are in the 

correct system. As a proportion of the total number of participants, 

this is a small proportion of people even if it were, as Mr. White 

has indicated, several thousands of people. 

Having said that, however, let me also quickly emphasize that 

we understand and appreciate for individuals, whether it’s one or 

whether it’s a thousand times one, this is a personal, vexing, traumatic issue. And it’s something that we must find a solution for, 

not only for the individuals that we know about, but for the individuals we may discover in the future. 

Mr. CUMMINGS. Well, I’m glad you said the second part of that, 

because I was going to tell you that one, one is too many. 

Mr. FLYNN. Yes. 

Mr. CUMMINGS. Let me ask you just a last question. I wish I had 

more time, but I’ve got to go. But let me ask you this. Are these 

errors still going on? In other words, are we still running into problems? 

Mr. FLYNN. Mr. Cummings, you will hear, I’m sure, from the testimony that the majority of these errors occurred during that transition period from 1984 to 1987. 

Mr. CUMMINGS. Right. 

Mr. FLYNN. It is true, nonetheless, that errors can yet still prospectively occur. 

Mr. CUMMINGS. Mm-hmm. 

Mr. FLYNN. And that’s why, again, part of the parameters of the 

solution we want to devise here is something that can be applied 

5 years, 10 years from now, whenever these types of situations 

present themselves. Hopefully they will be very small in number, 

if not nonexistent altogether, but I cannot say that to you with certainty. 

Mr. CUMMINGS. One of the earlier witnesses called for a review 

of all hires during the mid-1980’s in order to find all the remaining 

enrollment errors. How do you feel about that? 

Mr. FLYNN. I think that you will hear both from the agencies and 

from me that that is a very significant administrative burden to 

apply what still to this day, Mr. Cummings, remains a relatively 

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er-by-folder review wouldn’t be immediately necessary because we 

could create mechanisms that dealt with this as they presented 

themselves in the future. 

Mr. CUMMINGS. Let me ask you this—and I wish I could ask it 

of all the witnesses—but I want to ask you. It’s a very simple question. Could you feel their pain as I did this morning? 

Mr. FLYNN. Yes, sir, Mr. Cummings, I could. 

Mr. CUMMINGS. Well, I ask all of you to do me a favor, that as 

you move toward this 30-day deadline, and as you sit there in the 

room and try to resolve that, I hope that you will think about the 

pain that you felt coming from them today, because I certainly felt 

it. 

And I hope that you’ll think about that pain and multiply it by 

the fact that each one of these witnesses, there are whole lot of 

other people affected, too, but they also have families that are affected. 

And sometimes I think it’s good for us in government—and that 

includes us in the Congress—to reverse roles and put ourselves in 

the places of people who are, in this instance, harmed by what we 

or the government has done in the past. Thank you very much. 

And, Mr. Chairman, thank you very much for the courtesy, 

again. I appreciate it. 

Mr. MICA. Thank you, Mr. Cummings. And thank you also for 

your suggestion of setting a deadline. And we’re going to meet in 

my office on Wednesday, September 10, at 11:30, to hear from Mr. 

King or his designee, Mr. Flynn, their solution. 

So we give them not only 30 days, but a couple to spare. Eleventhirty in my office. And we’ll have a solution from them. Of course, 

we will finalize the solution at that time. I’d like to recognize now 

the gentlelady from Maryland, Mrs. Morella. 

Mrs. MORELLA. Thank you, Mr. Chairman. I look forward to 

being at that meeting post-Labor Day around September 10, knowing that OPM has been spending like 18 months, you say, working 

on the problem. 

Now, from what I understand, you do not know all of the Federal 

employees who are affected, right, Mr. Flynn? 

Mr. FLYNN. That is correct, Mrs. Morella. 

Mrs. MORELLA. Because you’re got different categories that you 

just mentioned. You’ve got your retirees, those who have been separated, those who are still actively working there who may not even 

know it. Would it not be for those people, a simple solution to let 

them just stay where they are and continue in the system that they 

happen to be in? 

Mr. FLYNN. Mrs. Morella, let me try and answer that for you by 

mentioning two factors. First, it’s important, I think, to remember 

that while an employee is in an active status working for a Federal 

agency the personnel operations that affect him or her are actually 

carried out on a day-to-day basis by personnel and payroll offices 

of the various departments and agencies worldwide. 

So it would not be unusual for the Office of Personnel Management not to have a name-by-name listing of all the employees who 

have been affected by these errors. I know, and I know that you’ll 

hear from the agencies this morning that as they have identified 

these errors, they have identified the individuals so that when we 

49

arrive at a solution that everyone can agree to, we can then go to 

these individuals and work with them on that solution. 

With respect to the second part of your question, and that is, 

wouldn’t it just be easier to leave people where they are, I think 

as you heard from the group that testified earlier, people’s individual personal financial circumstances differ from one to the 

other. And you heard amongst the four people this morning preferences to stay under the Federal Employees Retirement System if 

they were given perhaps some expanded opportunity to do make up 

contributions and to receive——

Mrs. MORELLA. That’s because they knew that they were given 

not only the wrong advice but put into the wrong system. 

Mr. FLYNN. You’re absolutely correct. 

Mrs. MORELLA. Had they not known that—I mean, think of the 

trauma that they went through and the anguish in trying to rearrange. But if they didn’t know that, if they are receiving retirement, everything seems to be fine, why go back to those people and 

kind of ignite the explosive quality of combined mistakes? 

Mr. FLYNN. You raise a very valid question, Mrs. Morella. And 

to the degree that we can build into this solution something that 

enables employees to make choices about what they perceive as 

being in their best interests, then you might very well have a situation where most people discovered prospectively would prefer to retain the coverage that they were originally incorrectly placed in, 

though it is also true that some people whose coverage errors have 

been corrected already might today see that as being in their interest. 

I spent a number of years as a head teller with a bank before 

I came to work for Government. And I know from that experience 

how deeply personal information about one’s finances and the implications of one’s finances for the future are. 

One of the things that we’ve learned in this process of studying 

the issue is that different people do in fact come to this issue with 

very different ideas about what would be an appropriate remedy 

for them. And we want to try and develop a solution that is responsive to that diversity of views. 

Mrs. MORELLA. I guess I’m trying to understand what you’re saying. I’m just simply saying that if they don’t even know that they’re 

in the wrong system and they’re happy where they are, then why 

do anything more about it. Because it seems like you’re planning 

to find out who they are. And are you planning to notify them? 

When you listen to Mr. Schrum, just as an example of all those 

thousands of others, he, in 1987, was given the option of switching 

to FERS, but no one told him that he was ineligible to stay in 

CSRS. And then even after that initial error, there was another opportunity to be told that he was in the wrong system, but it took 

several years for that. See what I’m saying? 

Mr. FLYNN. Absolutely, Mrs. Morella. That is a distressing rendition of how an individual was provided with minimal guidance 

and assistance during that period of time. I am obviously not personally aware of Mr. Schrum’s situation, but if that, in fact, is the 

case, we made several errors and then compounded it. And that 

should not have occurred. 

50

Mrs. MORELLA. Mm-hmm. Now, are there many who are affected 

who have not been notified? I mean, there are some affected you 

don’t even know. 

Mr. FLYNN. That is correct, Mrs. Morella. 

Mrs. MORELLA. Right. Now, those that you do know, have they 

been notified? 

Mr. FLYNN. The law does require that when an individual’s 

misclassified retirement coverage is identified that the individual 

be notified and that under current law corrective action be taken 

to correct the retirement records to reflect the correct system and 

to reallocate the contributions from the Civil Service Retirement 

and Disability fund to the Social Security Administration, and so 

on and so forth. 

Mrs. MORELLA. And nobody on the first panel indicated getting 

advice, counsel, direction, or assistance from OPM. And I didn’t 

even get a response to my letter. What’s happening? 

Mr. FLYNN. Mrs. Morella, first with respect to your letter, I hope 

that we will be able, in our response to that letter, to lay out for 

you, as we have talked about here this morning, a way to address 

this, that represents agreement among all the respective agencies 

within the executive branch and that looks at this issue from a 

comprehensive standpoint. I apologize that you have not received 

a response to that letter as of yet. 

Mrs. MORELLA. No, it was simply that when I asked the panelists about whether they had gotten assistance from OPM——

Mr. FLYNN. Yes. Right. 

Mrs. MORELLA [continuing]. They all said they had gotten some 

comfort from somebody within their agency, but OPM did not give 

them help. 

Mr. FLYNN. Thank you. I appreciate refreshing my memory on 

the main thrust of your question. As I mentioned earlier, we do 

rely heavily on departments and agencies to provide counsel and 

assistance to employees when they’re in active status, because 

that’s where they get most of the services. 

So it was heartening for me to hear that from their local personnel and payroll offices, these individuals received what assistance was available. To the degree that we at OPM, in responding 

to inquiries, telephone calls, questions, from any of these individuals or any others who have been similarly affected, have given the 

impression that we didn’t care, that we didn’t want to provide any 

assistance, I apologize. That’s certainly not our intent. 

I think what we were trying to convey was that in the framework 

of existing law and regulation, these are the only activities that are 

possible and that we are studying this matter with an eye toward 

recommending a solution that would deal with this issue on a 

broader, more comprehensive, equitable basis. 

That’s really the message we should have been conveying. Now, 

we have worked very hard with departments and agencies across 

government providing them materials, training aids, information, 

training. We had at our benefits officers conference just this past 

June a session on this issue, so that they in turn can provide the 

direct face-to-face assistance to individual employees who are affected by this. We can always do that better. But that’s the primary avenue of that support for current employees. 

51

Mrs. MORELLA. We are here now to look at what remedies we 

can find for the future and I’m reminded that as we look back, 

Shakespeare once wrote, ‘‘Things without remedy should be without regard. What’s done is done.’’

Now we move ahead to the future and look for your resolution 

when we meet on September 10. Thank you, Mr. Flynn. Thank you, 

Mr. Chairman. 

Mr. FLYNN. Thank you. 

Mr. MICA. Mr. Flynn, just a couple of quick questions, comment. 

First of all—and I hope you take this back to Director King—I do 

expect that when a member of this panel or I write to you that we 

get some response, even an interim response. When did you write, 

Mrs. Morella, May? 

Mrs. MORELLA. May 20. 

Mr. MICA. May 20. That’s not satisfactory. I mean, even—the last 

thing I did yesterday to my staff was, I said, I want a report tomorrow on every piece of correspondence from constituents that’s over 

a week old. And my staff gives me an accounting. I report to my 

constituents. We’re only here as temporary representatives of the 

people. And you, in this function, report to us. 

So I do expect that courtesy. We’ve had a good working relationship. And even if it’s, ‘‘We’re working on it,’’ the members of the 

subcommittee do deserve a response. 

Is there any dollar price tag? Now, you said this may be in the 

thousands of people. Is there any price tag to potential financial obligation that we may incur to correct this? Can you give us any 

guesstimate at this point? 

Mr. FLYNN. That’s a very difficult thing to do, Mr. Chairman. 

And I can tell you quite honestly that there is no single estimate 

of what it might cost to correct these situations. 

Mr. MICA. If we have several thousand, though, we’re probably 

talking of tens of millions, hundreds of millions? 

Mr. FLYNN. I would be hesitant, Mr. Chairman, right now to put 

a number on that. Once we have nailed down the specifics of the 

proposal that we will bring to you, we will nail down at the same 

time an estimated impact of the costs associated with that. 

Mr. MICA. You’re probably talking a pretty significant amount of 

money. 

Mr. FLYNN. Well, that’s a possibility, Mr. Chairman. We will provide you with estimates as best we’re able to when we do that. 

Mr. MICA. And we may be looking at some either opportunities 

to open up Thrift Savings to folks or repayment of Social Security 

or access to systems. But there are definitely going to be some substantial costs to bring these various individual situations to a corrected status. Is that correct? 

Mr. FLYNN. We are certainly looking, Mr. Chairman, at all of 

those options. Whether or not they involve substantial costs or not 

for the individuals who have testified and for the others who have 

been similarly affected is a matter that I would like to spend time 

analyzing before I answer that one way or the other. 

Mr. MICA. Why did OPM oppose the legislation last year? 

Mr. FLYNN. The legislation that was proposed at the time, Mr. 

Chairman, and if you would give me an opportunity, I might, when 

I get back to the office, perhaps provide a full response for the 

52

record. But the legislation that was proposed at the time, in our 

view, only dealt with a portion of this problem. 

And as I said earlier today, we have many different types of people facing many different types of situations. And we think that 

rather than attempt to deal with this piecemeal, and perhaps in 

the process create inequities between different groups of people, it 

was important to come at this from a comprehensive standpoint 

that attempts to meet the objectives that I’ve outlined earlier this 

morning. 

Mr. MICA. We will meet on the 10th to resolve this matter. Mr. 

Ford, you’re recognized. 

Mr. FORD. Thank you, Mr. Chairman. I’ll be very brief. And I 

thank all the panelists and want to apologize to the former panel. 

I’m from the State of Tennessee, and Secretary Shalala and Glickman and Bruce Reid from the White House were here to talk about 

the tobacco agreement, so forgive me for having to leave in the 

middle of your testimony. 

I sympathize and certainly support all that you said. And I’m 

pleased to hear the chairman and certainly the ranking member, 

and certainly pleased to hear the panelists talk in terms of a September 10 date to hopefully bring some resolution that speaks to 

fundamental fairness and equity issues. 

I join with all of my colleagues in wanting to see this resolved. 

But I would just ask one question. I know that, Mr. Flynn, you’ve 

been discussing, I guess, this problem with the Social Security Administration, the Thrift Investment Board, for some 18 months 

now. 

Any sense of what they’ve offered in terms of helping to bring 

some resolution to this problem and help make some these affected 

employees whole? 

Mr. FLYNN. Well, Mr. Ford, we’ve talked about a number of 

things both within the Office of Personnel Management and with 

the Office of Management and Budget and other agencies that do 

have various aspects of this program to administer. I think that we 

are all in agreement on the broad overall goals. 

I think what we’re doing now is coming to some conclusions 

about what specific mechanisms that may be administered by the 

various agencies may need some analysis or review in terms of the 

mechanisms used to meet those goals. 

It would be premature for me to say specifically what they are. 

But it does involve, for example, addressing the issue where it’s 

possible to do so, of allowing employees perhaps to find a way to 

maximize the investment in their personal savings that they were 

unable to do so during the period of the error, things like that, so 

that when we present employees with choices, or former employees 

or retirees, they have the opportunity of knowing if they take action a, b, and c, this will be the result, if they take action d, e, and 

f, this will be the result. 

And we want to nail those down and then bring those together 

in the form of a specific proposal very shortly. 

Mr. FORD. Thank you, Mr. Chairman. 

Mr. MICA. Thank you, Mr. Ford. Now, we’ve heard from OPM. 

Now we’ll hear from the agencies. And the first panelist from the 

agencies—we have Internal Revenue Service—Sarah Hall Ingram, 

53

Associate Chief Counsel of Employees Benefits/Exemption Organizations. Welcome, and you’re recognized. 

Ms. INGRAM. Thank you, Mr. Chairman and members of the subcommittee. My name is Sarah Hall Ingram. I’m the Associate Chief 

Counsel for Employee Benefits and Exempt Organizations at the 

Internal Revenue Service. I appreciate the opportunity to be here 

today to discuss some of the tax issues that face Federal employees 

who have been enrolled in the incorrect portion of the Federal retirement system. 

I’ve submitted a written statement for the record. And all I wish 

to do this morning is just highlight a few things. 

Mr. MICA. Without objection, that will be part of the record. 

Ms. INGRAM. Thank you, Mr. Chairman. As is apparent from the 

previous testimony, the question of whether and how these erroneous enrollment mistakes should be corrected raises a number of 

important legal and policy considerations, many of which do not depend on the tax law. But I would like to focus this morning on two 

of the Federal tax issues that are raised by the situation. And this 

is with the IRS wearing the hat as tax administrator. 

Since we do not have the specific proposal that is being worked 

on before us today, my testimony will necessarily relate to the discussion of generally applicable principles of tax law that would be 

at play in this situation. 

The first issue relates to the FICA taxes. The Internal Revenue 

Service administers and collects the FICA taxes, which, as you 

know, are in two pieces, both the Medicare portion which applies 

to most Federal employees, and also the OASDI portion, commonly 

known as Social Security taxes, which are different for people in 

different programs. 

Under the Internal Revenue Code sections 3101 and 3111, the responsibility for the liability for Social Security taxes are split between the employer and the employee. And there is a mechanism 

under 3102 for the employer to withhold from the employee’s wages 

the employee’s portion of the liability and then remit to the Service 

both the employee’s portion and the employer’s portion. 

And under the normal procedures, the employer is required to 

deposit these taxes with the IRS shortly after the salary is paid. 

And there are deposit timing rules, as you know. These deposits do 

not identify the individual employees for whose account the payments are made. 

To report the taxes there is a two-part system. The employer is 

required to file with the IRS a quarterly return, which is the return 941. And then after the close of the year the employer provides forms W–2 both to the Social Security Administration and to 

each employee. And that is taxpayer-specific data. 

The Federal Government, including the IRS as an employer, is 

generally subject to these same requirements for reporting wages 

and doing the information reporting. Now, if the employer discovers an error on the 941 that has been filed with the IRS, it is 

generally required to provide corrected information with its next 

quarterly filing of the form 941 and to include a 941C, which flags 

the fact that a correction is being made and needs to be made. 

Likewise, if an employer discovers an error on the W–2s that 

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tration there is a procedure for the employer to issue corrected W–

2Cs to both parties so they have the correct information for all purposes. 

While these correction procedures are reasonably workable in situations in which the error is discovered relatively promptly and 

employers and the Government are used to dealing both with the 

original forms and the corrected forms, they were not really designed to deal with a situation in which an error persists over an 

extended period of time. And so that is certainly one of the issues 

in play in any solution. 

We understand as an agency that receives instructions from 

OPM that, obviously, we need to issue correct W–2 information and 

if there are errors, issue corrected W–2 information, in part so that 

employees can be assured that the correct benefits calculations are 

performed by the Social Security Administration at the end of the 

day when they are in a benefit receipt mode. 

The Internal Revenue Service is currently working with the Department of Treasury and other Federal agencies and obviously 

also with OPM to analyze the more complex issues that can arise 

with the possible need to correct FICA tax liability reporting when 

there are problems over an extended period of time. 

Another aspect of the general situation you’ve been hearing 

about this morning relates to the limitations on employee contributions to the Thrift Savings Plan. As noted in my written testimony 

and as mentioned this morning by others, an employee who has 

been incorrectly assigned to the CSRS program would not have 

been allowed at that point to take advantage of the higher Thrift 

Savings Plan contribution limitations that were available to employees under the FERS program. 

In general, the Internal Revenue Code limits the amount that an 

employee may contribute to a tax-deferred savings plan. That applies to private sector plans as well as to the Thrift Savings Plan. 

The subcommittee asked the IRS whether we had a position on 

proposals to waive those limits for situations in which Federal employees have been misclassified because of an agency mistake. 

The Internal Revenue Code does not include any specific authorization that permits us to do an administrative waiver of those limitations that are established in the Code and, as I mentioned, apply 

to both the private sector as well as the Thrift Savings Plan. 

And we would recommend that any legislative proposal to provide such authority should be considered as part of an integrated 

package that would address the entire solution so that the appropriate legislative changes, if any, to the Code, can be made as part 

of a whole. 

Mr. Chairman, that concludes my prepared testimony, but I’d be 

pleased to respond to any questions you or the panel may have. 

[The prepared statement of Ms. Ingram follows:]

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Mr. MICA. Thank you for your testimony. And now I’d like to recognize Dr. Diane Disney, Deputy Assistant Secretary, Civilian Personnel, at the Department of Defense. Welcome back. And you’re 

recognized. 

Ms. DISNEY. Thank you, Mr. Chairman and members of the subcommittee. I’m pleased to be here today to describe the experiences 

of the Department of Defense in managing the issues related to 

employees who have been enrolled in the wrong Federal retirement 

system. I’ve submitted a written statement for the record and 

would like just to highlight some of that testimony. 

Mr. MICA. Without objection, that complete statement will be 

made part of the record. 

Ms. DISNEY. Thank you. Let me begin by noting that DOD truly 

cares about its current and past employees and is committed to 

finding and correcting errors that cause hardship. 

As previous speakers have indicated, retirement system determinations are very complex. Between January 1984 and January 

1987, DOD placed approximately 170,000 new hires into the transitional system. Our recent search of the data records of the interim 

category hires has revealed about 3,100 records of employees who 

were hired after December 31, 1983, but placed in the Civil Service 

Retirement System. 

Most of these records were coded correctly because of prior Federal service. At the beginning of this fiscal year, however, the department had about 500 cases at the Defense Accounting and Finance Service for corrective action. 

These retirement system errors come to light in a variety of 

ways. Most commonly, they are discovered during an audit of the 

personnel folder. An audit is routinely done when employees transfer or return from overseas. Personnel files are also audited when 

former employees are rehired. 

Errors may be discovered when employees seek retirement credit 

for previous service or after they receive pre-retirement counseling. 

We’ve also found that erroneous coding is uncovered by specialists 

after they receive the classroom training that we provide. 

Nearly all of the erroneous enrollments at DOD date back to 

those years between 1984 and 1987. Thus we’re faced with a task 

of correcting actions that are 10 or more years old. Now although 

the correction of the actual error is fairly straightforward, the subsequent correction of all the supporting records is complex and involves several other agencies, including OPM, the Internal Revenue 

Service, the Social Security Administration, and the Thrift Investment Board. 

While we would like to make each employee whole for retirement 

coverage, doing so is often impossible under existing laws. The department has developed and is using a variety of tools to advise 

personnel offices of this issue and to get the word out to employees 

themselves. 

The benefits and entitlements branch of our Field Advisory Service, for example, has done an outstanding job in this area. It publishes articles addressing corrections of errors, coverage rules, and 

changes to those rules. The articles also serve to inform employees. 

We’ve developed and published a retirement plan decision logic 

tree. And while it sounds very boring and it looks complex, this has 

61

received very good reviews from the personnel community and 

OPM. And we’ve now put it on the World Wide Web so employees 

can use it themselves, as well, if they’re concerned at what their 

circumstances might be. 

We’ve published an easy-to-use, easy-to-understand reference 

guide designed to walk personnel specialists through the entire 

process. This guide also contains sample letters that can be sent. 

In addition, we offer training classes to all DOD personnel specialists without charge. And our benefits and entitlements staff are 

available by phone, fax or e-mail 12 hours a day Monday through 

Friday. 

As you know, we are regionalizing much of our civilian personnel 

management operation. As the personnel folders are moved into 

the new regional centers, we have another opportunity for review. 

Then, too, our Defense Finance and Accounting Service has developed and is staffing a series of memoranda to its center directors, 

providing information on how to adjust civilian pay records. 

Of course, we also rely upon OPM guidance on corrective procedures and on litigation affecting benefits. OPM has already testified to its actions in this area. The solution to this problem is not 

easy. 

We can use our data base to identify employees who may have 

been encoded erroneously. We’ve done that. The next step is to continue screening individual records to discover who might have been 

enrolled erroneously. Our installation personnel officers are doing 

that. Those are the relatively easy parts. 

The hard part comes after corrections have been made. In order 

to make or keep employees whole, tax, Social Security, and Thrift 

Savings issues must be addressed. But they are beyond the control 

of DOD. We would welcome the opportunity to work on developing 

alternatives that are simple to understand, are simple to apply, 

and cause no financial hardship for employees or retirees. 

That concludes my prepared remarks. I thank you again for this 

opportunity to describe our experiences and would be pleased to 

answer any questions you might have. 

[The prepared statement of Ms. Disney follows:]

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Mr. MICA. Thank you for your testimony. I will now recognize 

Linda Oakey-Hemphill, agency retirement counselor with the Department of the Treasury. Welcome, and you’re recognized. 

Ms. OAKEY-HEMPHILL. Mr. Chairman and members of the subcommittee, I’ve previously submitted written testimony. And with 

your permission, I will just provide a brief summary of that testimony. 

Mr. MICA. Without objection, that will be made part of the 

record. You’re recognized. 

Ms. OAKEY-HEMPHILL. Thank you. I’m pleased to appear today to 

discuss with you a matter of interest and serious concern: erroneous enrollment in the Federal retirement systems. 

The Department of the Treasury’s Office of Personnel Policy, in 

which I work, is responsible for providing technical and policy guidance in the various personnel specialties and liaison with other 

agencies for the Department’s 13 bureaus. 

As the Department’s chief personnel expert in the area of retirement I have participated in initiatives directed toward preventing 

coverage errors or minimizing the negative effects entailed in the 

correction of such errors. Many of these initiatives which are noted 

in my written testimony have been inter-agency efforts. 

In order to determine correct retirement coverage a set of complex laws must be applied to an individual employee’s unique employment history. Employees cannot be expected to be familiar 

enough with the coverage rules to discover an error and, therefore, 

are generally unaware when one has occurred. 

Additionally, there is no completely reliable way to use the automated personnel payroll system to identify errors. Consequently, 

many coverage errors have gone undetected for years. It is also not 

uncommon for an employee to transfer from agency to agency without detection of a coverage error. Usually, the longer an error goes 

uncorrected, the more severe the effects on the employee’s financial 

planning and the greater the staff resources required to make the 

correction. 

Despite the good will and substantial cooperative efforts of key 

agencies involved, which are reflected in my written testimony, we 

have found the available administrative remedies to be insufficient 

for preventing coverage errors or for making all affected employees 

whole with respect to their retirement planning. 

I’d be happy to answer question you may have concerning my experiences in this area. 

[The prepared statement of Ms. Oakey-Hemphill follows:]

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Mr. MICA. Thank you for your testimony. Dr. Disney, did I hear 

you correctly? Did you say in 1984, I guess, through this period you 

enrolled 170,000 folks? 

Ms. DISNEY. Yes, sir. In the transitional program. 

Mr. MICA. In the transitional program. 

Ms. DISNEY. That was—the 1980’s, as you know, was a period of 

considerable hiring in the department. 

Mr. MICA. Right. And we heard that there—I had one report that 

in the Air Force they may have enrolled as many as 1,000 people 

a month in that wrong system. Is that an accurate estimate? 

Ms. DISNEY. That I have no information on. 

Mr. MICA. If they had a 5 percent error rate, and we did 170,000 

folks, we’re looking at 8,500 folks possibly improperly enrolled. 

Ms. DISNEY. We have looked very carefully in our records and 

have found a maximum of 3,100 where we believe there could possibly be an error. 

Mr. MICA. So you have 3,100 just in DOD? 

Ms. DISNEY. No, sir. We don’t have 3,100. 

Mr. MICA. Possible. 

Ms. DISNEY. That’s the outside. And I have reason to believe that 

most of those were properly coded. We know we have 500 cases. We 

know that. So if the ratio holds, we would probably end up with 

1,000. We’re trying everything we can to identify everybody who 

was misclassified. 

Mr. MICA. So, in DOD we have an estimate of about 1,000? 

Ms. DISNEY. Yes, sir. 

Mr. MICA. Ms. Oakey-Hemphill, how long have you been working 

on this inter-agency task force to resolve this problem? 

Ms. OAKEY-HEMPHILL. I have been working with other agencies 

for literally years to try to either prevent errors or to minimize 

problems associated with them. 

Mr. MICA. How long? 

Ms. OAKEY-HEMPHILL. Well, basically, when I started this job 

back in 1983 we were preparing for the Social Security Act 

changes, the implementation in 1984. 

Mr. MICA. But working with them trying to correct the wrong enrollment since when? 

Ms. OAKEY-HEMPHILL. Well, I guess the bulk of my efforts have 

really been since maybe 1992 or 1993 just in terms of internally 

in Treasury. Much more activity because many more errors started 

to surface around that time. 

Mr. MICA. How many errors do you think in Treasury? 

Ms. OAKEY-HEMPHILL. There’s almost no way of estimating. 

Mr. MICA. How many have you uncovered so far? 

Ms. OAKEY-HEMPHILL. Well, from the period 1994—calendar year 

1994—through the present, there were approximately 600 errors 

corrected. And these are errors of all types. But that—that required 

intervention by our payroll system, that weren’t just automatically 

processed through the payroll system. 

So 600 errors that had gone on for more than a year during the 

last 3 to 4 years. 

Mr. MICA. Ms. Hall Ingram, you said basically it’s going to take 

a legislative solution to go back and correct some of the IRS problems. Is that correct? 

71

Ms. INGRAM. I think that’s probably accurate. In terms of which 

ones will be necessary to change legislatively, that will depend on 

which package looks to be the best fit for the variety of problems. 

Whether one would suggest changing the $9,500 limitation, for example, would depend on whether that turned out to be a necessary 

part of the solution. 

Mr. MICA. If a private sector hadn’t properly set aside some of 

these funds for Social Security and some of the other accounts, they 

probably would have been noticed by IRS and probably would have 

been threatened by IRS and had their account seized, probably 

their property. Have you ever thought of maybe putting a lean on 

the Capitol building to resolve this matter? 

Ms. INGRAM. I think that the issue of what happens in the private sector is an interesting one and is certainly part of what we’re 

looking at. 

Mr. MICA. You have a handle. 

Ms. INGRAM. Pardon? 

Mr. MICA. You have a handle. I’ve seen a couple of your threatening letters. But you don’t have that same handle with the agencies or the Federal Government, I guess not. 

Ms. INGRAM. For purposes of Social Security taxes we have generally the same requirements and the same procedures. And we do 

approach Federal and State government employers in much the 

same manner we would approach a private sector employer. 

In the private sector one of the things that it’s important to remember is that the retirement plan regime and the Social Security 

regimes are decoupled in the private sector for the most part. 

Mr. MICA. Mm-hmm. 

Ms. INGRAM. And so solutions to Social Security problems in the 

private sector are generally handled with one set of rules and procedures. And solutions for errors in covering employees or making 

employees whole who have been omitted from plans or programs is 

done under a separate regime. 

It would appear to be somewhat more complicated in the Federal 

sector. And that’s one of the things that has to be put together—

all those different pieces. 

Mr. MICA. Now I take it that you or someone from your agency 

has been working with OPM to come up with suggestions for a solution to your particular element and problems, is that correct? 

Ms. INGRAM. Right. Both as a Federal—employer of employees 

who have such issues, we’ve obviously been working with Treasury 

in keeping people informed about what issues we’re seeing and the 

people affected. Also as a regulator in the area of Social Security 

rules and also in pension plan or retirement plan rules, we’ve also 

been flagging issues and trying to provide analysis that could be 

used. 

Mr. MICA. Have you submitted written recommendation to OPM 

to resolve some of the problems in your specific area? And if so, 

when? 

Ms. INGRAM. The IRS, itself, has not submitted a specific legislative proposal. We’ve submitted analyses of some possible options 

through the Treasury Department. And I understand that those 

have been shared. The issue of legislative change obviously ultimately has to come out of the Office of Tax Policy for us. 

72

And they are involved in those discussions both as to the Thrift 

Savings Plan rule about the cap on contributions. And, also, as to 

the Social Security, we have looked at whether there are administrative ways within our power to deal with both of those issues. 

And we have shared our concerns about our inability to deal with 

them and why. And we’ve shared those, yes. 

Mr. MICA. But you’re saying your determination is you cannot 

deal with it administratively to resolve some of these situations? 

Ms. INGRAM. Our flexibility is severely limited. 

Mr. MICA. Limited. 

Ms. INGRAM. Yes. 

Mr. MICA. Ms. Oakey-Hemphill, have you all prepared any written recommendations to OPM to resolve the matter from your perspective? I take it you work with them constantly? 

Ms. OAKEY-HEMPHILL. Yes. 

Mr. MICA. Or are you just working on trying to find individual 

solutions to individual problems? 

Ms. OAKEY-HEMPHILL. Well, both, rather. 

Mr. MICA. Have you submitted a written plan, a recommendation? 

Ms. OAKEY-HEMPHILL. Not specific recommendations on how to 

fix the errors. There are so many different kinds of errors. And the 

solutions for different employees present themselves differently. I 

think Mr. Flynn suggested personal preferences largely figure into 

these. So no, we have not. Though from time to time we have discussed informally with staff just what kind of shape a fix would 

take. 

Mr. MICA. Well, every time, Mr. Flynn, you resolve one of these 

or reach some accommodation, administrative solution, whatever, 

aren’t you setting a precedent? Are you considering a freeze until 

some overall solution is developed or legislative solution? 

Mr. FLYNN. I think, Mr. Chairman, if a freeze were available to 

us administratively, it would be something that we would want to 

consider. Our view of the situation is that the law is fairly specific. 

When an error is discovered, it must be corrected retroactively at 

the point in time that it’s discovered. So I don’t think that option 

has been available to us as we have worked on the development of 

a broader solution. 

Mr. MICA. How many lawsuits are pending, or have there been? 

Are you aware, Mr. Flynn? 

Mr. FLYNN. Mr. Chairman, I am aware of several, but I do not 

have a full accounting of lawsuits which may be pending in individual agencies. 

Mr. MICA. Is there also a class action suit brought? 

Mr. FLYNN. Not that I’m aware of, sir. 

Mr. MICA. No? Not yet? I don’t have any further questions at this 

time. Mrs. Morella. 

Mrs. MORELLA. Thank you. DOD, Dr. Disney, appears to be more 

aware and responsive to this problem than other agencies. And yet 

you expect there are still at least 500 people out there who don’t 

know. And, of course, this is troubling. 

Ms. DISNEY. Those individuals know, but we have not been able 

to resolve their circumstances. 

Mrs. MORELLA. But they do know? 

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Ms. DISNEY. Yes, ma’am. 

Mrs. MORELLA. Mm-hmm. Which is also troubling. Right. Have 

other agencies followed your example of outreach in trying to identify errors? Do you work with the other agencies? Is there communication? 

Ms. DISNEY. We try to work very hard with individual agencies 

in part through the inter-agency advisory group, which OPM sponsors, and where we meet biweekly. We also make the other agencies aware of all the material that we’re putting out on the web 

that is, we think, useful for others. We have made deliberate efforts to share the reference guide that we have developed. 

As to what is actually happening in individual agencies, I’m not 

in a position to say. 

Mrs. MORELLA. Mm-hmm. It would be nice at those meetings if 

they responded also so that you had a discussion about what that 

they have done, that it is working, that you have some idea of who 

is following and they have some idea of what other agencies are 

doing, also. 

Has, I guess to all of you, has OPM been helpful both technically 

and in offering guidance? I’ll ask all of you. 

Ms. INGRAM. OPM provides us with guidelines and regulations 

and procedures that we try to follow so that all the Federal agencies are following the same procedures. And in that manner we get 

a great deal of guidance out of OPM. We recognize, partly because 

we administer a piece of this puzzle ourselves, that there are some 

tough issues that have been under discussion and under analysis, 

issues that belong to a number of different agencies, whether it’s 

IRS or SSA or whoever. 

And we’ve been interacting with OPM to get our share of those 

issues identified and analyzed. So we welcome the opportunity to 

get this package put together and get a solution done that integrates those pieces since no one of us holds all the pieces of the 

puzzle. 

Mrs. MORELLA. An addendum to the question too is, is there another—any information or advice you could offer where OPM could 

be more helpful? 

Ms. INGRAM. I think the commitment that you’ve heard this 

morning and that we’ve heard previously to get the pieces put together, whether they’re the tax questions or the benefits side of the 

questions or whatever, and get that resolved, is exactly what we 

need from an agency point of view. And we welcome this putting 

together of all these pieces into a proposal. So I think that is, from 

our perspective, the right direction. 

Mrs. MORELLA. Dr. Disney, do you want to comment on OPM? 

Ms. DISNEY. Yes. I’m very pleased that we have a definite time 

table on which to move forward because this is an extraordinarily 

complex issue that causes great anguish to individuals and their 

families. And having a target to shoot for, I think, helps focus all 

of our attention. 

Mrs. MORELLA. Dr. Hemphill, would you like to comment on 

OPM’s role, if any, and have they been helpful and what you might 

suggest? 

Ms. OAKEY-HEMPHILL. I’ve always found OPM staff to be extremely supportive. We’ve worked together on a lot of projects. And 

74

I’ve never had to ask twice. They are very, very supportive. And 

we look forward to working cooperatively with OPM and the other 

agencies involved in the future. 

We’ve expressed our eagerness to do so. And we’re very glad that 

the level of interest in this problem that’s been expressed here 

today is surfacing and there’s going to be action. 

Mrs. MORELLA. You’ve all given very nice answers. I understand. 

But we’re talking about whether there really is that kind of help 

that you needed. I guess I understand where you’re coming from. 

Do any of you maintain records to ensure the consistency of settlements so that employees in similar situations would be treated 

equally? I guess I could start with Ms. Ingram. 

Ms. INGRAM. I don’t have in hand today. We’re pulling the information together. 

Mrs. MORELLA. Yes. 

Ms. INGRAM. And I can provide it to the committee later——

Mrs. MORELLA. OK. 

Ms. INGRAM [continuing]. Exactly how many historical corrections have been made or what—you used the term ‘‘settlements’’—

have been effected. So I really can’t give you information about 

that. Certainly, our efforts both on the IRS side of the house in the 

personnel office and also on the legal side of the house of the IRS 

has been to try to have consistent treatment and integrated answers. 

So, but if you wish to have the data, I would need to go back and 

get that and submit it to the committee. 

Mrs. MORELLA. Mm-hmm. If you could do that it would be appreciated. 

Ms. INGRAM. OK. 

Mrs. MORELLA. Dr. Disney? Whether you’ve maintained any 

record. 

Ms. DISNEY. We maintain personnel records and payroll records 

on all of our decisions and try very hard to ensure that there is 

consistency of treatment of all of the individuals. 

There are two separate sides. The personnel side of the house 

and the payroll side of the house. And I cannot speak today for all 

of the payroll records. But I can certainly determine the answer to 

your question from that perspective and provide that later. 

Mrs. MORELLA. All right. Splendid. That would be great. Ms. 

Hemphill. 

Ms. OAKEY-HEMPHILL. By settlements, do you mean court settlements for people who have sued or do you mean just the corrections of the errors themselves? 

Mrs. MORELLA. Actually both. 

Ms. OAKEY-HEMPHILL. As far as court settlements are concerned 

I have no data at all to be able to offer you. 

Mrs. MORELLA. Right. 

Ms. OAKEY-HEMPHILL. And I’m not sure that I could provide a 

comprehensive or complete——

Mrs. MORELLA. OK. 

Ms. OAKEY-HEMPHILL. I suspect that we have had very few, if 

any. 

Mrs. MORELLA. Right. 

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Ms. OAKEY-HEMPHILL. As far as the corrections of these errors 

are concerned, depending upon the type of the error, going back 

and correcting the error is pretty much a cut and dried thing. 

There are only so many things that you can do and so many choices 

that you can offer to the employees. 

Administratively, our hands are tied. We can’t get creative with 

them. If we do we’re stepping outside our boundaries. So, in terms 

of having to keep records on how we’ve corrected things, I think we 

would pretty much know that if we had done something properly, 

how we had done it. Who we have corrected and identifying people 

whose records were corrected, that could pose some difficulties because of payroll system changes and a variety of other factors. A 

length of time, that sort of thing. 

Mrs. MORELLA. It sort of sounds as though you need some legislation or you need something to give you more authority to be able 

to settle these claims, something coming from Congress through 

OPM. Is that correct? 

Ms. INGRAM. Yes. 

Ms. OAKEY-HEMPHILL. Potentially, yes. 

Mrs. MORELLA. I mean, your hands are tied to a great degree. 

Ms. DISNEY. We have situations where we have identified that 

there was an erroneous placement. And we’ve identified the 

amount of money involved. We cannot apply all of that money to 

a correction. Therefore, that money must be held in escrow until 

some further court case or legislation comes about. 

Mrs. MORELLA. OK. Great. Well, I think you’ve answered my 

questions. Thank you very much for appearing here today. And 

thank you, Mr. Chairman. 

Mr. MICA. Mr. Ford, you’re recognized. 

Mr. FORD. Thank you, Mr. Chairman. Very briefly. I thank Mrs. 

Morella. She really sort of exhausted many of the questions. And 

I thank the panelists. And I look forward to September 10. I’m 

pleased that there is a bipartisan cooperation on the committee. 

And I’m hoping that we’ll be able to make whole and restore the 

benefits for not only the four panelists we had earlier but certainly 

the affected families and loved ones who have been harmed and impacted by what seems to be an egregious oversight. 

So thank you, Mr. Chairman. 

Mr. MICA. Thank you, Mr. Ford and thank you, Mrs. Morella. I’d 

like to thank our panelists for their participation today. We’ve 

heard a story of a real nightmare for some of our Federal employees affected by this problem. Our goal is to find a solution and try 

to expedite decisionmaking to resolve these issues. 

I’m concerned about what I’ve learned about this period of the 

change in system and enrollment. I guess I learned yesterday, and 

I don’t have all the details, that they may freeze the District enrollment or change that. I hope we don’t see a similar disaster occur 

now with making changes in the District retirement plan. 

Hopefully, we can learn by this mistake and we won’t repeat it 

again. But we will meet on September 10th, and we will find a solution. And I look forward to working with each of our panelists 

and others. 

The record will be left open for 2 weeks. There may be additional 

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ness to come before the subcommittee, at this time the committee 

is adjourned. Thank you. 

[Whereupon, at 11:45 a.m., the subcommittee was adjourned.] 

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