Retirement Provision a Sore Point

Management officials of federal agencies—in particular the U.S. Postal Service—have argued for many years that once a FECA beneficiary reaches what would have been his or her normal retirement eligibility point, that person should be switched to the retirement rolls. The major reason is that FECA-related costs are charged back to the employing agency, limiting the money it has available for other purposes, where annuity costs are borne by the federal retirement trust fund. “FECA benefits typically exceed federal retirement benefits because they are tax free, which constitutes an incentive for individuals to remain on FECA past when they would otherwise have retired,” the document says, adding that a waiting period is standard in similar state programs.