Congressman Jim Moran (D-VA), has introduced the "FERS Redeposit Act." The legislation has been introduced in previous Congressional sessions without any action taken on the bill.
What The Bill Would Do
Under the current system, a person who was covered by the Federal Employees Retirement System, left the federal government and cashed out his federal annuity or rolled it into a private savings account cannot receive credit for that prior government service.
If it becomes law, the "FERS Redeposit Act" would allow former federal employees who come back to work for the federal government to redeposit the full amount plus interest of the annuity they cashed out or rolled over. It would effectively allow those in this group to retain their years of federal service in calculating future annuity payments.
Under the current system, individuals who leave the federal government and either cash out their annuity or roll it into a private savings account cannot redeposit those funds if and when they return to government service. This means that for purposes of determining their annuity benefit, they have lost their credit for previous years of service and are considered to be at year one when returning to the government after time in the private sector.
Federal employees who began working before 1984 and are therefore covered by the older Civil Service Retirement System do not face the same problem so it does not apply to these people.
"This legislation is about enticing experienced federal employees to return to government service at a time when our nation needs its best and brightest the most," said Moran. "Our bill was developed in response to the coming ‘brain drain’ – the fact that in eight years, 90 percent of civil service federal executives will be over the age of 50 and nearing retirement. This ‘brain drain’ is a grave threat to our well-functioning federal workforce."
The legislation is supported by the Federal Manager’s Association (FMA) and the American Federation of Government Employees (AFGE).
Darryl Perkinson, FMA National President said, "We are in the midst of a human capital crisis, exacerbated by the fact that sixty percent of all federal managers and supervisors – roughly 100,000 workers – and more than half of the current federal workforce – about 900,000 employees – will be eligible for regular or early retirement in the next few years. FMA believes there must be a proper mix of managers, rank-and-file employees and senior executives that will fulfill each agency’s mission."
John Gage, President of AFGE stated, "AFGE supports the FERS Redeposit Act because it takes us a step closer to eliminating the remaining inequities between the two main federal retirement systems by giving those in the Federal Employees Retirement (FERS) a benefit long available to federal employees in the Civil Service Retirement System (CSRS).
The bill is HR 828. It is co-sponsored by Frank Wolf and Gerald Connolly, both Congressmen from Virginia. The full text o the bill is not yet available according to the Thomas website.