A coalition of nearly 20 unions and professional associations of federal and postal employees has asked the White House to drop, in its upcoming budget proposal, a long-standing request to revamp injury compensation policy in the FECA program.
The FECA program long has been a sore spot for agency management—in particular that of agencies with high percentages of physically demanding and/or risky occupations—because beneficiaries who are unable to return to work tend to stay on those benefits indefinitely rather than switch to disability retirement (they typically can choose one or the other but FECA in many cases is worth more to them because its benefits are tax-free). That results in continued charge-backs to the agency for persons long after it is clear they will never return to work.
Numerous proposals have been raised over the years to switch such beneficiaries instead to disability retirement when they reach a certain age, meaning the costs would be borne by the federal retirement fund instead.
A letter to the White House from the Federal-Postal Coalition says that such proposals have been a staple of budget proposals under the current and prior administrations since 2003 but they “rely on the erroneous assumption that current benefits are overly generous compared to typical federal retirement benefits.”
It noted that those who become disabled before what would have been their normal retirement point lose the ability to build up their TSP accounts and Social Security benefits, among other disadvantages. GAO has estimated that for an individual the result would be a reduction in median benefits of up to 35 percent, it said.
The groups also asked the administration to drop its proposal to eliminate the add-on benefit for beneficiaries with dependents.
The FECA-related proposals have not advanced in Congress beyond sporadic hearings over the years. However, many of them are incorporated into postal reform bills, since USPS is a major agency that has pushed for those changes; similar language is in the main postal reform bill that is currently pending in the Senate committee level.
