October 2, 1985 EXTENSIONS OF REMARKS 25761 EXTENSIONS OF REMARKS FEDERAL PENSIONS tion" that assumes all current workers will billion the sum paid into the military retire­ draw pensions, when only a third will actu­ ment trust fund in 1986. The proposal stipu­ HON. LEE H. HAMILTON ally do so. lates that savings can be made only by MILITARY RETIREMENT SYSTEMS changing the amount of retirement benefits OF INDIANA paid to future enlistees, forcing the Defense IN THE HOUSE OF REPRESENTATIVES Members of the armed services can retire at any age after 20 years of service and draw Department to recommend permanent Wednesday, October 2, 1985 half their final salaries. Pension payments changes in the military pension system and begin right after retirement and are adjust­ to report to Congress how it will achieve the Mr. HAMILTON. Mr. Speaker, I would $4 billion savings. like to insert my Washington Report for ed annually for increases in the cost of living. Servicemen do not contribute to their Although it is unclear what changes will Wednesday, October 2, 1985, into the CON­ retirement plan, although they do contrib­ be made in the pension systems, the issue GRESSIONAL RECORD: ute to social security. The projected cost of cannot be avoided for long. Congress must FEDERAL PENSIONS the system in 1986 is $18.2 billion. look for reforms that restrian cost increases Like other employers, the U.S. govern­ Like the CSRS, the military pension is but retain features that attract skilled ment has a duty to offer its employees pen­ criticized for its price tag and generosity. people to public service and encourage expe­ sion programs that provide for security Since 1975, cost increases have far outpaced rienced workers to remain. after retirement or disability. Military and inflation, tripling in just ten years. Pension <Please help me update my mailing lists civilian pensions have been valuable in at­ payments now account for 55% of total mili­ by notifying me of any incorrect or dupli­ tracting and retaining quality personnel in tary payroll. The automatic COLAs, the ab­ cate mailings.> public service. However, their price has sence of any contribution by military per­ grown to over $40 billion, 5% of the federal sonnel to their own retirement, and the budget. Pensions have become the feature availability of early retirement with imme­ HURRICANE DAMAGE IN of federal employment mentioned most diate and full annuity are frequently cited APALACHICOLA BAY often to me by Hoosiers, and an area of fed­ as causing the increase. eral spending in which they are increasingly Military pensions also seem to cause the interested. military to lose experienced personnel to HON. DON FUQUA FEDERAL RETIREMENT SYSTEM early retirement. The average age of retire­ OF FLORIDA ment is 43 for officers and 40 for enlisted The Civil Service Retirement System IN THE HOUSE OF REPRESENTATIVES <CSRS> allows retirement without benefit personnel. Military retirees can collect half penalty at age 55 for employees with 30 their final salaries in pension benefits and Wednesday, October 2, 1985 also earn salaries in the private sector. At years of service. CSRS provides automatic age 65 they can draw social security with no Mr. FUQUA. Mr. Speaker, the people of annual cost-of-living-adjustments <COLA> reduction in military benefits. The Defense Franklin and Wakulla Counties suffered equal to changes in the Consumer Price immense damage as a result of Hurricane Index <CPD. The system is funded by em­ Department says it needs big pensions to at­ ployees, who pay 7% of their gross annual tract and retain qualified people, and that Elena. Apalachicola Bay is famous pay, by matching contributions from em­ military personnel deserve extra benefits throughout the world for its oysters and it ploying agencies, by interest from CSRS for undertaking the risk of war. But far may be 2 years or more before they can be from encouraging experienced personnel to harvested again. This is a most serious eco­ trust fund assets, and by direct revenues remain in the military, current benefits are from the . U.S. Treasury. Revenues in 1984 a strong incentive to leave the service after nomic blow to the thousands of people who totaled $36 billion, including $4.4 billion depend on the oysters for their livelihood. paid by employees, and about $22 billion 20 years. REFORM EFFORTS I wrote to President Reagan last week to was paid in benefits. urge that steps be taken to expedite Federal Ballooning costs have led to criticism of In 1984, Congress set up an interim plan the CSRS. The main charge is that the to supplement federal employee participa­ relief efforts to these counties which have system is overly generous. A study commis­ tion in social security while it studied ways already been designated as major disaster sioned by Congress and conducted by the to replace the current pension system. New areas. I have received far too many com­ Hay Group, a respected private consulting government workers make full contributions plaints of excess bureaucracy and paper­ firm, recently found that, in the long term, to social security, and pay 1.3% to CSRS. work and these people need the assistance average federal retirement benefits exceed The interim plan ends on December 31, of their Government and they need it now. those in the private sector. Also, private 1985. Unless a new plan is developed or the Recently, the New York Times ran an ar­ sector employees wait until ages 62 or 65 temporary system continued, federal em­ ticle explaining the situation facing the before retiring with full benefits, and re­ ployees hired after January 1, 1984, will people on Apalachicola Bay and I insert ceive COLAs averaging only one-third of the have to pay 7.05% of their salaries to social CPI. A second criticism is that the system is security and another 7% to CSRS. this article into the RECORD at this point too costly: CSRS payments are 25% of pay­ One reform proposal would create a new and want to call to the attention of my col­ roll, but private sector pension plans take pension plan built upon social security for leagues the situation in Franklin and Wa­ only 18%. Critics also predict future insol­ workers hired after January 1, 1984. Savings kulla Counties. vency of the system. The pension's unfund­ in the plan would come from raising from 55 FLORIDA OYSTERS AND A HARDY LIVELIHOOD ed liability-the amount the government is to 62 the age at which full retirement bene­ LEFT DEVASTATED AFTER HURRICANE ELENA obligated to pay present and eligible retir­ fits could be received. Further savings would ees-is $528 billion and grows by $1 billion a come from cutting COLAs to 2% below the <By Jon Nordheimer> month. CPI and basing retirement benefits on an APALACHICOLA, FLA.-For more than a cen­ Supporters of CSRS point out that when average of the highest five years of salary, tury the oyster was the pride of bountiful total compensation-both pay and bene­ rather than on the highest three. The plan Apalachicola Bay and a handy symbol of fits-is compared, federal employees trail includes a capital accumulation plan <CAP>. the hardy men who harvested the mollusks private sector workers by 7.2%, lower pay not offered in CSRS, to which employees from the 6,000 acres of beds lying in shallow and other benefits more than cancelling the could contribute up to 10% of pay, matched waters protected by offshore barrier islands. advantage in pensions. Further, few federal by a 5% employer contribution. With the In recent years the oystermen presented a employees take advantage of early retire­ CAP, benefits under this proposal would ac­ tough, doughty exterior as they went about ment, retiring on average at age 61, just tually exceed those of CSRS for retirees age their bone-weary work out on the bay, below the private sector average age of 62. 62 and older. hand-tonging oysters from the bottom. Defenders also note that the plan continues Reforms in military pensions have also They clung tenaciously to old ways in a to meet its obligations. The funding gap been undertaken. A bill now being consid­ world that gripped them with viselike pres­ cited by critics is merely an "accounting fie- ered would cut from $18.2 billion to $14.2 sure to change. e This "bullet" symbol identifies statements or insertions which are not spoken by the Member of the Senate on che floor. Boldface type indicates words inserted or appended, rather than spoken, by a Member of the House on the floor. 51-059 0-86-8 (Pt. 19) 25762 EXTENSIONS OF REMARKS October 2, 1985 They resisted plans to speed up the devel­ of poverty, there are few choices open to smoke and mirrors. The House and Senate opment of St. George Island, one of the bar­ workers other than taking up the time-hon­ Budget Committees report its savings at rier islands, fearing that the construction of ored but difficult task of harvesting oysters. differing levels-$57 .5 billion and $55.5 bil­ resorts would pollute the bay and damage In recent years a controversy flared over a the oyster beds. move by outside investors to build a 386- lion respectively-contrasted with the Con­ When they talked among themselves room hotel, a tennis complex, a marina and gressional Budget Office's estimate of only about the future on the flyblown docks of 381 condominium units on the western end $39 ·billion in fiscal year 1986. Eastpoint and Apalachicola, where mounds of St. George Island. The project was seen Regardless of which of these projections of sunbleached shells piled high outside the as a step to create a resort playground simi­ you believe, however, it's clear we haven't corrugated shucking sheds, they seemed vul­ lar to Hilton Head, a successful develop­ gone far enough because deficits will still nerable but never yielding.