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S. Hrg. 104-293 CONGRESSIONAL AND FEDERAL PENSION REVIEW Y 4.G 74/9: S. HRG. 104-293 Congressional and Federal PensionTR.A..RINGS BEFORE THE SUBCOMMITTEE ON POST OFFICE AND CIVIL SERVICE OF THE COMMITTEE ON GOVERNMENTAL AFFAIRS UNITED STATES SENATE ONE HUNDRED FOURTH CONGRESS FIRST SESSION MAY 15, 1995 CONGRESSIONAL PENSION REVIEW MAY 22 AND JUNE 19, 1995 FEDERAL PENSION REVIEW Printed for the use of the Committee on Governmental Affairs «-s.^ U.S. GOVERNMENT PRINTING OFFICE 91-055cc WASHINGTON 1996 : ForsalebytheU.S.GovernmentPrintingOffice SuperintendentofDocuments,CongressionalSalesOffice,Washington,DC 20402 ISBN 0-16-052183-1 \ S. Hrg. 104-293 CONGRESSIONAL AND FEDERAL PENSION REVIEW 4. G 74/9: S. HRG. 104-293 nqressional and Federal PensionTR.A..RINGS BEFORE THE SUBCOMMITTEE ON POST OFFICE AND CIVIL SERVICE OF THE COMMITTEE ON GOVERNMENTAL AFFAIRS UNITED STATES SENATE ONE HUNDRED FOURTH CONGRESS FIRST SESSION MAY 15, 1995 CONGRESSIONAL PENSION REVIEW MAY 22 AND JUNE 19, 1995 FEDERAL PENSION REVIEW Printed for the use of the Committee on Governmental Affairs wwJ U.S. GOVERNMENT PRINTING OFFICE 91-055cc WASHINGTON 1996 : ForsalebytheU.S.GovernmentPrintingOffice SuperintendentofDocuments,CongressionalSalesOffice,Washington,DC 20402 ISBN 0-16-052183-1 COMMITTEE ON GOVERNMENTAL AFFAIRS WILLIAM V. ROTH, Jr., Delaware, Chairman TED STEVENS, Alaska JOHN GLENN, Ohio WILLIAM S. COHEN, Maine SAM NUNN, Georgia FRED THOMPSON, Tennessee CARL LEVIN, Michigan THAD COCHRAN, Mississippi DAVID PRYOR, Arkansas CHARLES E. GRASSLEY, Iowa JOSEPH I. LIEBERMAN, Connecticut JOHN McCAIN, Arizona DANIEL K. AKAKA, Hawaii BOB SMITH, New Hampshire BYRON L. DORGAN, North Dakota Franklin G. Polk, StaffDirector and ChiefCounsel Leonard Weiss, Minority StaffDirector Michal Sue Prosser, ChiefClerk SUBCOMMITTEE ON POST OFFICE AND CIVIL SERVICE TED STEVENS, Alaska, Chairman THAD COCHRAN, Mississippi DAVID PRYOR, Arkansas JOHN McCAIN, Arizona DANIEL K. AKAKA, Hawaii BOB SMITH, New Hampshire BYRON L. DORGAN, North Dakota Patricia A. Raymond, StaffDirector Kimberly Weaver, Minority StaffDirector Nancy Langley, ChiefClerk (ID CONTENTS Opening statements: Paee SenatorStevens L 71 SenatorPryor 31J1>. 7° SenatorAkaka 39, 78 Senator Dorgan 79 WITNESSES Monday, May 15, 1995 Hon. Richard H. Bryan, U.S. Senator from the State ofNevada 2 Hon. James P. Moran, Representative in Congress from the State ofVirginia . 13 William E. Flynn, III, Associate Director for Retirement and Insurance, U.S. Office ofPersonnel Management 18 Johnny C. Finch, Assistant Comptroller General, General Government Pro- grams, U.S. General Accounting Office; accompanied by Robert Shelton, Assistant Division Director for Human Resource Management Issues, Gen- eral Government Division 24 Monday, May 22, 1995 Carolyn L. Merck, Specialist in Social Legislation, Education and Welfare Division, Congressional Research Service 33 Johnny C. Finch, Assistant Comptroller General, General Government Pro- grams, General Accounting Office; accompanied by Bob Shelton, Assistant Division Director, Federal Human Resource Management Issues, General Government Division 40 Monday, June 19, 1995 LouisJ. Freeh, Director, Federal Bureau ofInvestigation 72 Stephen H. Greene, Deputy Administrator, Drug Enforcement Administra- tion 74 John Sturdivant, National President, American Federation of Government Employees, AFL-CIO 85 Robert M. Tobias, National President, National Treasury Employees Union .... 87 Sonya Constantine, Acting National President, National Federation ofFederal Employees 89 Moe Biller, President, American Postal Workers Union, AFL-CIO 96 Vince Palladino, President, National Association ofPostal Supervisors 99 Ted Carrico, Secretary-Treasurer, National Association of Postmasters ofthe United States 100 Roger W. Moreland, Vice President, National Rural Letter Carriers' Associa- tion 102 William P. Brennan, President, National League ofPostmasters 103 Bruce L. Moyer, Executive Director, Federal ManagersAssociation 109 Robert S. Duncan, Past President, National Council, Social Security Manage- mentAssociations 110 Carol A. Bonosaro, President, Senior Executives Association 112 HeleneA. Benson, President, Professional Managers Association 114 Charles R. Jackson, President, National Association of Retired Federal Em- ployees 117 RobertT. Mansker, Congressional Employee 120 (III) IV Page Alphabetical List of Witnesses Benson, Helene A.: Testimony 114 Prepared statement 262 Biller, Moe: Testimony 96 Prepared statement 239 Bonosaro, Carol A.: Testimony 112 Prepared statement 257 Brennan, William P.: Testimony 103 Prepared statement 247 Bryan, Hon. Richard H.: Testimony 2 Prepared statement 125 Carrico, Ted: Testimony 100 Prepared statement 243 Constantine, Sonya: Testimony 89 Prepared statement 237 Duncan, Robert S.: Testimony 110 Prepared statement 253 Finch, Johnny C: Testimony 24, 40 Prepared statement 129, 184 Flynn, William E. Ill: Testimony 18 Prepared statement 127 Freeh, LouisJ.: Testimony 72 Prepared statement (with attachments) 203 Greene, Stephen H.: Testimony 74 Prepared statement 211 Jackson, Charles R.: Testimony 117 Prepared statement 264 Mansker, Robert T.: Testimony 120 Prepared statement 268 Merck, Carolyn L.: Testimony 33 Prepared statement 178 Moran, Hon. James P.: Testimony 13 Moreland, RogerW.: Testimony 102 Prepared statement 245 Moyer, Bruce L.: Testimony 109 Prepared statement 248 Palladino, Vince: Testimony 99 Prepared statement 242 Sturdivant, John: Testimony 85 Prepared statement 212 Tobias, Robert M.: Testimony 87 Prepared statement 234 V Page APPENDIX Prepared statements ofwitnesses in order ofappearance 125 Hon. Alan K. Simpson, a U.S. Senator from the State ofWyoming, prepared statement — 127 Federal Retirement Benefits for Members of Congress, Congressional Staff, and Other Employees, May 1995—GAO Report No. GAO GGD- 95-78 135 GAO questions and answers submitted by Mr. Finch from Senator Stevens 194 . Reporton Congressional Pensions submitted by Mr. Finch 270 William H. Quinn, National President, National Postal Mail Handlers Union 345 Judge William A. Pope, II, President of the Federal Administrative Law Judges Conference 345 Gerald W. McEntee, International President, and William Lucy, Inter- national Secretary-Treasurerofthe AFSCME 349 Kenneth T. Lyons, National President, National Association ofGovernment Employees 349 Questions and answers from William E. Flynn, III, in letter to Senator Stevens, dated July 19, 1995 350 CONGRESSIONAL PENSION REVIEW MONDAY, MAY 15, 1995 U.S. Senate, Subcommittee on Post Office and Civil Service, of the Committee on Governmental Affairs, Washington, DC. The Subcommittee met, pursuant to notice, at 2:08 p.m., in room SD-342, Dirksen Senate Office Building, Hon. Ted Stevens, Chair- man ofthe Subcommittee, presiding. Present: Senators Stevens, Pryor, and Dorgan. OPENING STATEMENT OF SENATOR STEVENS Senator Stevens. Good afternoon. Today and next Monday, this Subcommittee will be taking a first look at the important topic of Federal employee pension plans. Today's hearing will focus on the mechanics of Federal pension plans, looking at the Congressional features of the Federal pension plans and contemplating whether there should be a modification to those Congressional features. The focus at next Monday's hearing will be on Federal pension plans generally, how they compare to private sector pension plans, and whether Congress should be looking at any Legislative initiatives to modify any ofthose plans. We have also set aside June 19 to hear from representatives of Federal employees, as well as Federal retiree representatives. Now, let me say at the outset that many of us are aware that there has been considerable media coverage recently regarding pensions of former Members of Congress who retired voluntarily or were involuntarily retired by their constituents last November. I emphasize that they all retired under the old system, the Civil Service Retirement System, and not the system that I helped au- thor, the Federal Employees Retirement System. I anticipate that these retired Members' benefits are extreme ex- amples of Congressional pension coverage. The average Member of Congress and Congressional employees are not nearly as fortunate as those who retired after so many years of service. I would also point out that when it comes to Federal employees other than Members of Congress, I do believe that as Members we have an ob- ligation to the taxpayers to do our best to attract the best qualified people and to cultivate their talents in the Federal system at a rea- sonable cost. Part of the attractiveness of employment, whether it is Federal or in the private sector, is what kind of a future an individual can build toward. This future has as its foundation a retirement pro- gram. When people are attracted to the Federal service, I believe (l) we owe it to them to provide a retirement system that is adequate for their retiring years and competitive with that provided in the private sector. I hope that this hearing today will review Congressional pension coverage for Members and Congressional staff, and help draw some conclusions as to the appropriateness of the Federal pension coverage. I am pleased that you are here today, Senator Bryan. You were the one to make the first comments on the floor concerning the Federal pension system. It was pursuant to your suggestion that Senator Dole indicated that we would hold this hearing and we are holding the hearing to follow up on the Majority Leader's commit- ment to you. Following Senator Bryan, we will hear from Congressman Jim Moran, ofVirginia. Following Congressman Moran's testimony, we will hear from Ed Flynn, Associate Director for Retirement and In- surance of the Office of Personnel Management. Our final witness will be Johnny Finch, the Assistant Comptroller General for the Government Accounting Division, and accompanying Mr. Finch will be Bob Shelton, the Assistant Division Director for Resource Man- agement Issues ofthe General Government Division ofGAO. That said, Senator, we are happy to hear your statement. I might ask if my friend, Senator Dorgan, has an opening statement ofany kind. Senator Dorgan. No, Mr. Chairman. I am anxious to hear Sen- ator Bryan, and I appreciate your calling this hearing. TESTIMONY OF HON. RICHARD H. BRYAN,1 U.S. SENATOR FROM THE STATE OF NEVADA Senator Bryan. Mr. Chairman, let me just preface my comments by expressing my appreciation to you for convening this hearing. By way of background, I became involved in this issue about a year ago at a town hall meeting. A constituent rose—to say, look, why is the pension system that Members of Congress why is it so much more generous than other Federal civil service employees. My initial response was that I did not know that that was the case, but that if it were, I would introduce legislation to provide some compatibility and equity between those positions. So it is with that background, Mr. Chairman, that I have intro- duced Senate bill 228, which is designed to restore equity in the Congressional pension system. To accomplish this objective, Con- gressional retirement benefits are placed on a parity with the pensions ofother Federal civil servants. Under current practice, Members of Congress and their staffs receive a more generous retirement benefit which, in my view is not defensible and it is not acceptable. Under the present retirement system, Members of Congress pay slightly more into their Federal pension plans than do other Federal workers, but even taking con- sideration the additional contribution that is made, the retirement benefit which Members of Congress receive is substantially more beneficial than others that are part ofthe retirement system. •Theprepared statementofSenator Bryan appearsonpage 125.