The government should do more to help federal employees choose between FECA injury compensation benefits and disability retirement when they are eligible for both but must elect one, the GAO has said.
That situation can arise when a disabling injury or illness that would qualify someone for disability retirement was work-related, making the employee also eligible under FECA.
GAO said the decision is a complex one since the two are structured differently—for example, while FECA compensation is based on a percentage of pay adjusted for inflation, retirement benefits build with additional years of service and salary growth. The result is that the comparative value can vary according to factors such as how long the employee has worked—with FECA generally more generous for those who have had relatively short careers up to the point of disability, but retirement benefits potentially superior for those with longer careers.
The Department of Labor, which operates the FECA program, “does not routinely remind recipients to compare benefits, so they may be unaware of their options or how to consider them,” a report said. “In addition, DOL and the Social Security Administration use a manual and highly complex process to calculate one key component of a FECA recipient’s compensation in retirement related to Social Security benefits.
“As a result, estimates of FECA benefits in retirement that include this component are not readily available prior to retirement. These challenges hinder recipients’ ability to accurately compare their options and may result in some recipients not choosing their best option at retirement.”
It said the two agencies agreed with its recommendation to educate employees on comparing the two, and to improve the information they provide to better enable them to make that comparison.
Surge in FECA Claims from Covid Expected, Report Says
Some Have a Choice: Disability Retirement or FECA
Choosing Regular vs. Disability Retirement, if Eligible for Both
