PENSION BENEFITS WATCH

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP89-00066R000400060001-4
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 1
• Document Creation Date: December 23, 2016
• Document Release Date: December 29, 2010
• Sequence Number: 1
• Publication Date: December 10, 1985
• Content Type: OPEN SOURCE

Approved For Release 2010/12/29: CIA-RDP89-00066R000400060001-4
C2 TUESDAY, DECEMBER 10, 1985 ...
THE FEDERAL DIARY
Pension Benefits Watch
By Mike Causey
Washington Post Staff Writer
T his is definitely nail-biting
time for federal workers
and retirees who are
fighting a two-front war on
Capitol Hill to protect their
pension benefits.
The legislative situation is so
confused and fast-changing that
it difficult to report about it
without sounding like an
alarmist.
Proposals to do away with
the upcoming cost-of-living
adjustment (COLA) for retirees
and eliminate the tax-free
postretirement period for feds
could disappear quickly. But
leaders of federal and postal
unions and retiree groups are
worried that they won't.
Here is a rundown:
^ January COLAs: Federal and
military retirees, including
more than 100,000 in the
Washington area, are due raises
in their checks next month.
But Senate-House conferees
on the debt ceiling bill are
considering a Democratic
proposal that would suspend
that raise until at least March,
when Congress would
determine whether a raise
would be allowed.
In the meantime, retirees
would continue to get their
annuity checks, but without a
raise.
Constance Horner, director
of the Office of Personnel
Management, warned last week
that any decision now to cancel
the January raise could cause
legal and political problems for
the administration, and result in
more than 400,000 erroneous
payments in January.
Horner told the Office of
Management and Budget that,
because of technical problems
in issuing correct checks, the
government could end up
making overpayments to some
annuitants and no payments to
recent retirees.
^ Pension tax: The tax reform
bill tentatively approved by the
House Ways and Means
Committee would eliminate the
tax-free postretirement period
for federal, state and local
government employes.
Under current law, their
pensions are not taxed after
retirement until they have
recovered all their
contributions to. the retirement
fund.
Because they have already
paid taxes, their liability doesn't
begin until they start drawing
pensions based on government
contributions. For the average
federal retiree that tax-free
period lasts about 18 months.
The House bill would subject
persons who retire after next
July 1 to an immediate tax on a
portion of their pensions. But
the Ways and Means
Committee has inserted
language, that would exempt
members of Congress and some
political appointees from the
pension tax change.
Reps. Steny Hoyer (D-Md.),
Frank Wolf (R-Va.) and Stan
Parris (R-Va.) will appear
before the House Rules
Committee this week asking
that federal employes be
granted the same
postretirement tax exemption
that the Ways and Means
Committee bill proposes for
members of Congress.
That exemption, if approved,
would be voted on by the full
House as an amendment to the
tax reform bill.
The status of the COLAs and
the pension tax plans could
change again. But, for now,
both are very real options.
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Approved For Release 2010/12/29: CIA-RDP89-00066R000400060001-4