WASHINGTON – Maryland Rep. Albert Wynn has introduced a bill to give federal employees an added incentive to retire early and avoid layoffs.
The bill proposed by Wynn, D-Largo, would reduce a penalty on retirement benefits for federal employees who want to retire between the ages of 50 and 55.
Federal employees may retire at any age if they have worked a minimum of 25 years. Employees also may retire if they are at least 50 and have worked for the federal government 20 years or more, said Sharon Wells, a spokeswoman at the federal Office of Personnel Management.
But for federal employees who now retire before age 55, a 2 percent penalty is imposed on benefits for each year the employee is younger than 55.
Wynn’s proposal would reduce the penalty to 1.75 percent for employees at age 50. It gives greater reductions for each additional year of an employee’s age.
An employee who retires at 54 would be penalized by only a half percent.
Up to 250,000 federal employees are between the ages of 50 and 54, Wynn said.
Wynn’s bill may face opposition because of possible costs, said George Nesterczuk, staff director of the House civil service subcommittee of the Government Reform and Oversight Committee.
The bill would cost “hundreds of millions of dollars governmentwide,” Nesterczuk said.
A similar bill that would have applied solely to the National Security Agency failed to win support in the subcommittee or full committee last spring, Nesterczuk said. Cost concerns were raised, he said.
Wynn said in a telephone interview he doesn’t think colleagues have read his proposal yet. He expects he will begin to “round up support” in the winter or spring.
Rep. Constance Morella, R-Bethesda, a member of the subcommittee, has not examined the bill, spokeswoman Mary Anne Leary said. She said several related bills will probably be considered.
Early retirements have been encouraged by President Clinton since 1993, as a way to reduce the federal payroll.
In 1992, just 1,266 federal employees chose to retire before they turned 55, according to OPM. That number shot up to 35,096 in 1993, when the Department of Defense began offering incentives to employees for “early out” retirements.
Early retirements totaled 15,068 last year, according to OPM.