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New GAO reports provide further evidence that cuts to FECA benefits are unfair

Thu, November 29, 2012

Washington, DC - The Government Accountability Office (GAO) released two new reports this week that analyzed changes to the Federal Employee's Compensation Act and their impact on Federal employees and Postal Service employees. 

GAO found that proposed cuts to Federal Employees' Compensation Act (FECA) benefits in the 21st Century Postal Service Act (S.1789) would result in employees who are injured at work receiving up to 35 percent less on FECA than they would have received if they had been able to retire without injury under the Federal Employee Retirement System (FERS).  Proposed cuts also would have a more significant impact on employees at lower pay grades and those who are injured earlier in their careers. 

"GAO's analysis further supports my position that the FECA benefit reductions included in the Senate-passed postal reform bill are unfair to injured employees," Senator Akaka said.  "This is especially true of the proposed cuts for elderly disabled employees who will receive significantly less than they would have received in retirement had they not been injured.  I continue to urge my colleagues to reject benefit cuts that would harm employees who are disabled by injuries sustained in service to their country."

More findings from the GAO report:
  • Median FECA benefits under current law for totally disabled workers are "on a par with or less than" what workers would have received under FERS had they worked a full 30-year career. 
  • Under a proposal by the Department of Labor that was included in  the Senate-passed postal reform bill, non-postal workers disabled as part of their service would receive 31-to-35 percent less than if they were not injured and retired after 30 years under the current retirement system.
  • GAO estimated that these revisions also adversely impact federal postal workers. Median FECA benefits would be 22-to-29 percent lower than what postal workers would have received in retirement benefits had they worked a full 30 year career.
  • For injured workers with dependents, GAO found that the Department of Labor's proposal would decrease their pre-retirement median wage replacement rates from 81.6 percent under current law to 75.8 percent under the proposals. 
  • GAO found a disproportionate impact on wage replacement rates for "those injured at lower GS (salary) levels and those who missed longer careers."
Senator Akaka is Chairman of the Senate Subcommittee on Oversight of Government Management, the Federal Workforce, and the District of Columbia, a subcommittee of the Committee on Homeland Security and Governmental Affairs.

The GAO reports are available here:

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