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Bills mean good news for workers

Congress considers bills that would benefit federal retirees

Date published: 2/25/2007

IHAVE welcome news for federal retirees on two fronts. Recently, legislation was introduced in Congress to repeal provisions that adversely affect their Social Security benefits and to allow federal and military retirees to pay health care premiums with pretax dollars.

The bill to repeal the Government Pension Offset Provision and the Windfall Elimination Provision was sponsored by Reps. Howard Berman, D-Calif., and Howard McKeon, R-Ga. More than one-third of their House colleagues are listed as sponsors.

Both provisions have been in effect since 1983. They reduce the Social Security benefits received by spouses of federal workers and those paid to retired or disabled federal workers who are receiving a Civil Service annuity.

The National Active and Retired Federal Employees Association reports that almost 400,000 Social Security beneficiaries are affected by the pension offset provision, and another 635,000 are affected by the windfall elimination provision.

Legislation to allow federal and military retirees to pay for health insurance coverage with pretax dollars was again introduced in the House by Tom Davis, a Virginia Republican. His bill has broad bipartisan support, including that of Maryland's Steny Hoyer, the new majority leader.

If the premium conversion legislation becomes law, federal and military retirees could save an estimated $800 a year in taxes. Current federal workers received this benefit years ago.

NARFE strongly supports efforts to extend premium conversion benefits to retired federal workers. NARFE has been working to protect the earned benefits of federal retirees since 1921.

With the announced resignation of Gary Amelio as executive director of the Thrift Savings Plan, the search is on to find someone to oversee the government's 401(k)-style retirement savings plan.

Amelio came to the TSP in 2003 and saw its assets grow to more than $200 billion. He is credited with reducing maintenance costs, giving TSP the lowest rates of any similar plan.

Amelio leaves to become president of retirement services for ULLICO Inc., a provider of insurance and investment services to union members.

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Date published: 2/25/2007