Statement of Administration Policy: H.R. 3249 - Federal Retirement Coverage Corrections Act

STATEMENT OF ADMINISTRATION POLICY

(House)

(Rep. Mica (R) FL and 14 cosponsors)

The Administration supports the goal of H.R. 3249, which is to establish procedures for Federal agencies to provide an equitable remedy for employees who were mistakenly placed in the wrong retirement system during the transition from the Civil Service Retirement System (CSRS) to the Federal Employees' Retirement System (FERS). However, the Administration strongly opposes H.R. 3249 for the following reasons:

• H.R. 3249 would be unnecessarily costly. Implementation of the bill would cost Federal agencies roughly $475 million over the next five years, reducing funds available for other discretionary spending priorities. These unnecessary costs would result in large part from the bill's overcompensating potentially thousands of affected Federal employees by giving them "missed" employee contributions -- which rightly would have been each employee's responsibility had the error never occurred -- in addition to the missed Federal Government retirement contributions required by current law.
• H.R. 3249 would be difficult to administer. Despite several amendments to make H.R. 3249 more workable, the bill would still be extremely difficult to administer and is incomplete. The provisions designed to correct the errors are excessively complex, potentially leading to further errors by the more than one hundred Federal agencies responsible for implementation. In addition, the bill inadequately addresses errors associated with former employees, retirees, and deceased retirees. The Administration believes that additional legislation would be required to address this issue.

The Administration looks forward to working with the Congress on this issue and urges enactment of the Administration's proposal, the "Retirement Coverage Error Correction Act of 1997," which was transmitted to Congress on November 7, 1997.

Pay-As-You-Go Scoring

H.R. 3249 would affect direct spending and receipts; therefore, it is subject to the pay-as-you-go (PAYGO) requirement of the Omnibus Budget Reconciliation Act of 1990. OMB's preliminary PAYGO estimate is under development.