Office of the Inspector General 

Commodity Futures Trading Commission 

Audit of CFTC “Pension Prizers” 

September 24, 2015 
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U.S. COMMODITY FUTURES TRADING COMMISSION 

Three Lafayette Centre
 

1155 21st Street, NW, Washington, DC 20581
 

Telephone: (202) 418-5110
 

Facsimile: (202) 418-5522
 

TO: Anthony Thompson, Executive Director 

Karen Leydon, Chief Human Capital Officer 

FROM: Miguel A. Castillo, Assistant Inspector General for Auditing 

DATE: September 24, 2015 

SUBJECT: Audit of CFTC “Pension Prizers” (Project No. 15-AU-03) 

Background 

The Farm Security and Rural Investment Act of 20021 authorized the Commodity Futures 

Trading Commission (CFTC) to create its own pay system. Under this pay system, CFTC 

employees can earn more than their counterparts working at the same grade at federal agencies 

operating under the general schedule (GS) scale, and more in line with other financial regulators. 

As such it may be attractive for GS employees to enhance retirement benefits with a short-term 

career at the CFTC. The Office of Personnel Management (OPM) has established guidance for 

retirement eligibility2 but has not established guidance for hiring short term federal employees 

nearing retirement. Since the CFTC internal controls do not address this topic either, the Office 

of the Inspector General (OIG) researched the extent to which CFTC employed individuals who 

may take advantage of the CT pay-scale to enhance their “high three” for retirement; i.e. 

“pension prizers”. 

What We Learned 

As illustrated in Chart 1, the number 

of potential pension prizers 

significantly declined after its peak in 

calendar years 2012 and 2013. 

More specifically, the number of 

former and current high-grade 

employees3 with fewer than 3.5 years 

1 Public Law 107-171 § 10702, Commodity Futures Trading Commission Pay Comparability.
 2 https://www.opm.gov/retirement-services/fers-information/eligibility/.
 3 Grades CT-14 to CT-18, not including Schedule C employees.
 

Chart 1 - Potential "Pension Prizers" 

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of CFTC service decreased from 17 to 5 or from 2% to .9% of total staff between calendar years 

2013 and 2015. To assess the universe of short-term CFTC employees nearing retirement or 

retirement eligible, or simply leaving within 3.5 years of their start date, we narrowed our scope 

from 97 to 38 that either are actively employed with CFTC (2), voluntarily retired (5), or 

transferred to another agency (31). As noted in Chart 2, attorneys represented the largest job 

classification followed by administration, human resource (HR), and other job classifications 

aligned with the Chief Information and Chief Financial Officers functions. 

Chart 2 - 38 Potential “Pension Prizers” by Job Title. 

Due to a personnel record scope limitation,4 we only reviewed three employee personnel files 

and noted the following: 

•	 Employee 1 was a former Attorney Advisor General that served the CFTC for 1.6 years. 

Personnel records showed that CFTC was his first federal employment and thus his 

retirement is not impacted by his tenure at the CFTC. 

•	 Employee 2 is an active Human Resource Specialist (HRS) that is eligible for retirement in 

1.4 years. Since transferring from another federal agency, his salary increased from 

$127,512 to $135,1635 . Personnel records included various cash awards for superior 

performance. 

•	 Employee 3 is a Supervisory Human Resources Specialist (SHRS) who is eligible for 

retirement in 1.5 years. She also transferred from another federal agency. Since her start 

date at the CFTC, her salary increased from $136,134 to $148,511. 

4 According to the Office of Human Resources, access to 35 of the requested files resides with other agencies. 5 As of June 26, 2015. 

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In addition, research of LinkedIn profiles for 5 of 31 former employees transferring to other 

federal entities indicated they accepted greater responsibilities. 

Conclusion 

There is no indication that individuals’ serving the CFTC for fewer than three and a half years to 

enhance their retirement is a systemic practice. However, we may elect to review this subset of 

employees in the future to identify any instances of abuse of the pay system. 

Management reviewed a draft report and conveyed their reassurance that we did not find a 

systemic practice that indicates CFTC's recruiting and hiring efforts are used to enhance an 

individual's retirement annuity. Their comments in its entirety are presented in Appendix 1. 

Our Objective, Scope, and Methodology 

Our objective was to assess whether CFTC employees take advantage of the CFTC pay scale to 

increase their retirement through employment lasting up to 3.5 years. To facilitate the audit, 

CFTC human resources personnel provided us with a list of all former and current employees 

since 2004, the inception of the CFTC pay system. Of 827 employees since that time, we 

selected non-Schedule C employees graded CT-14 or above who served the CFTC for no more 

than 3.5 years or have 3.5 years until their earliest retirement date. From the resulting 97 

employees, we selected those where Nature of Action Code6 descriptions were Accession 

(active) (2 employees), Retirement (5 employees), and Termination Appt In (transfers) (31 

employees). Of the resulting 38, we compared the number of “pension prizers” against the 

number of all CFTC staff yearly in order to gauge the “pension prizers” as a percentage of CFTC 

staff. In addition, we reviewed detailed information for three employees7 and researched others 

public profiles as available. Finally, we reviewed applicable internal controls, laws, and 

regulations. The audit was performed in accordance with the General Accepted Government 

Auditing Standards. Due to a scope limitation of personnel records, we were unable to test data 

reliability. 

We appreciate the courtesies extended to the OIG. Please direct questions to me or Timothy 

Peoples at (202) 418-5439. 

CC: 

Chairman Timothy G. Massad A. Roy Lavik, Inspector General 

Commissioner Sharon Y. Bowen Judith Ringle, Deputy Inspector General 

Commissioner J. Christopher Giancarlo 

6 The standardized OPM code assigned to a particular type of personnel action.
 7 According to the HR office, when employees retire or transfer to another agency, HR does not maintain access to the records.
 

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TO: 

FROM: 

DATE: 

SUBJECT: 

U.S. COMMODITY FUTURES TRADING COMMISSION 

Three Lafayette Centre 

1155 21st Street, NW. Washington, DC 20581 

Telephone: (202) 418-5000 

Facsimile: (2·02) 418-5521 

www.ctrc.gov 

MEMORANDUM 

A, Roy lavlk, Inspector General 

Anthony C. Thompson, Executive Director~ 

September 18, 2015 J 

CFTC Comments on the OIG Audit of CFTC "Pension Prizers" 

The Commodity Futures Trading Commission (CFTC) appreciates the opportunity to review and 

comment on the Audit of CFTC •Pension Prizers" pre;pared by the CFTC Office of Inspector General {OIG). 

The topic is Important and we value the research conducted by the OIG in this matter. It is reassuring 

that the OIG did not find a systemic practice that Indicates CFTC's recruiting and hiring efforts are used 

to enhance an Individual's retirement annuity. 

We appreciate that the audit team was mindful of the day-to-day work demands of the Human 

Resources Branch (HRB) and the considerations they extended to HRB in meeting the data requirements 

for this audit. 

APPENDIX 1: 

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