Military Technicians: Proposals to Improve Their Retirement Options

Congressional research reportMar 19, 2001

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Order Code RL30903

CRS Report for Congress

Received through the CRS Web

Military Technicians: Proposals to Improve Their

Retirement Options

March 19, 2001

name redacted

Analyst in National Defense

Foreign Affairs, Defense, and Trade Division

Congressional Research Service ˜ The Library of Congress

Military Technicians: Proposals To Improve Their

Retirement Options

Summary

Military technicians are federal civilian employees who provide support primarily

to wartime deployable units of the Selected Reserve. Unlike regular civilian

employees, however, military technicians are generally required to maintain

membership in the Selected Reserve as a condition of their employment. As members

of the federal civil service, technicians can earn an entitlement to an annuity under

either the Civil Service Retirement System (CSRS) or under the Federal Employee

Retirement System (FERS) in the same manner as most other civil servants.

The civil service retirement options for military technicians are nearly identical

to those available to most other civil servants. However, there are certain categories

of civil servants – federal law enforcement officers, firefighters, air traffic controllers

and nuclear materials couriers – who have been granted more generous retirement

options in recognition of the exceptionally rigorous demands of their professions.

Compared to most other federal employees, these “special category” federal

employees are allowed to retire voluntarily with a lower combination of age and years

of service, and their pensions are computed using a more generous formula. “Special

category” employees are also subject to mandatory retirement and usually contribute

a higher percentage of their pay to CSRS or FERS than do other federal employees.

Representatives of various military technician associations argue that the military

technicians should have the same retirement options as those enjoyed by the “special

category” federal employees. The work conditions of military technicians, they

argue, are exceptionally demanding and similar in rigor to those of law enforcement

officers, firefighters, air traffic controllers, and nuclear materials couriers. Opponents

of this proposal argue that the civilian duties performed by military technicians are

not as arduous as those performed by “special category” employees and are

commensurate with those performed by federal employees generally. While

conceding that most military technicians must meet strict physical fitness requirements

in order to retain their reserve membership and are occasionally deployed in the event

of war or national emergency, opponents argue that technicians are compensated for

these military duties through the military retirement system. Therefore, opponents

argue, military technicians do not deserve the more generous retirement options

enjoyed by “special category” federal civilian employees.

In the 106th Congress, two bills were introduced to improve the civil service

retirement options of military technicians. So far in the 107th Congress, one such bill

has been introduced. This report provides background information on the military

technician program and the retirement options for various categories of federal

employees, including military technicians. It also compares the retirement benefits

available to military technicians with those available to other federal employees, and

presents arguments for and against modifying the retirement benefits for military

technicians. Finally, it outlines and analyzes several bills introduced during the 106th

and 107th Congresses which seek to provide military technicians with more generous

retirement options.

Contents

What is a Military Technician? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Retirement Systems for Military Technician . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Civil Service Retirement Options for Military Technicians . . . . . . . . . . . . . . . . . 3

Comparison of Retirement Options for Different Types of Federal Employees . . 4

Immediate Annuity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Voluntary Retirement Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Involuntary Retirement Requirements: Discontinued Service . . . . . . . 8

Involuntary Retirement Requirements: Disability . . . . . . . . . . . . . . . 11

Deferred Annuity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Bills Introduced in the 106th and 107th Congress to Improve Retirement

Options for Military Technicians . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Analysis of H.R. 1079 (106th Congress) . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Analysis of S. 1883 (106th Congress) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Comment on Section 651 of S. 2549/H.R. 4205 (106th Congress) . . . . . . 15

Comment on S. 155 (107th Congress) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

List of Tables

Table 1: Voluntary Retirement Under CSRS . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Table 2: Voluntary Retirement Under FERS . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Table 3: Discontinued Service Retirement Under CSRS . . . . . . . . . . . . . . . . . 10

Table 4: Discontinued Service Retirement Under FERS . . . . . . . . . . . . . . . . . 11

Table 5: Deferred Annuity Under CSRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Table 6: Deferred Annuity Under FERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Military Technicians: Proposals To Improve

Their Retirement Options

This report is divided into five parts. The first part provides background

information on the military technician program. This is followed by a brief description

of the three retirement systems which military technicians are potentially eligible to

participate in. The next section discusses the civil service retirement options currently

available to military technicians and presents the arguments for and against modifying

those options. The fourth section provides a comparison of the retirement benefits

available to military technicians with those available to other federal employees.

Finally, the last section analyses several bills that have been introduced in the 106th

and 107th Congresses to provide more generous civil service retirement options to

military technicians.

What is a Military Technician?

The reserve component1 (RC) of the United States armed forces employs a small

core group of full time employees to administer RC units, train RC personnel, and

maintain RC equipment. These employees are known as Full-Time Support (FTS)

personnel. There are four distinct types of FTS personnel: civilian employees, active

duty military personnel, Active Guard and Reserve (AGR) personnel, and military

technicians.2

Military technicians are federal civilian employees, hired under statutes contained

in titles 5 and 32, U.S. Code, who provide support primarily to wartime deployable

units of the Selected Reserve.3 Unlike regular civilian employees, however, military

technicians are usually required to maintain membership in the Selected Reserve as

The reserve component of the United States military include the Army Reserve, Naval

Reserve, Air Force Reserve, Marine Corps Reserve, Coast Guard Reserve, Army National

Guard, and the Air National Guard.

Military technicians have also been referred to as “reserve technicians,” “civilian

technicians,” “dual status technicians,” “technicians” and “caretakers and clerks” in the past.

Military technicians serving in the Army or Air National Guard have also been referred to as

“Guard technicians.” The term used in the most recent federal legislation has been “military

technicians” and is the terminology generally used throughout this paper. The term

“technicians,” however, is sometimes used as an abbreviation. It should be considered

synonymous with the term “military technicians” unless stated otherwise.

The Selected Reserve, a sub-element of the Ready Reserve, contains those units and

individuals most essential to wartime missions. Members of the Selected Reserve generally

perform, at a minimum, one weekend of training each month, and two weeks of training each

year, for which they receive pay and benefits.

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a condition of their employment. They may also be required to fulfill their reserve

obligation (i.e., drilling one weekend a month and attending two weeks of annual

training) in the same unit they work for in their civilian capacity.4

Military technicians who hold membership in the Selected Reserve are referred

to as “dual status technicians” because of their status as both civilian employees and

reservists. However, not all military technicians belong to the Selected Reserve,

either because they were never required to do so when hired, or because they lost

their reserve membership at some point in their technician career.5 These technicians

are referred to as “non-dual-status technicians.”6

Retirement Systems for Military Technician

As members of the federal civil service, technicians can earn an entitlement to an

annuity under either the Civil Service Retirement System (CSRS) or under the Federal

Employee Retirement System (FERS) in the same manner as most other civil

servants.7 Additionally, as members of the Selected Reserve, technicians can earn

entitlement to military retired pay in the same manner as other reservists.8 Thus,

technicians are potentially eligible to receive retirement pay from two different federal

retirement systems – civilian and military – simultaneously. However, it is important

to point out here that the issue of early retirement for military technicians relates only

A “unit membership requirement” for certain military technicians was enacted November 18,

1997, as part of P. L. 105-85, and is codified in Title 10, U.S. Code, section 10216 (d).

Similar unit membership requirements have existed for many years within the administrative

agreements which govern the military technician programs in the Army Reserve and the Air

Force Reserve. In the case of the Army Reserve, the annual Department of Defense

Appropriations Acts from FY 1984 through FY 1996 also contained language barring funds

to certain technicians who did not hold reserve membership in the same unit which they

worked for in their civilian capacity.

See footnote 28 for a more detailed discussion of why some military technicians are not

required to maintain their membership in the Selected Reserve.

They are also sometimes referred to as “status quo” technicians.

CSRS applies to those workers who entered federal service before 1984. FERS applies to

those workers who entered federal service in 1984 or later; those hired before 1984 who opted

to switch to FERS from CSRS during a designated “open season;”and workers who were

eligible for CSRS when first hired, but who had a break in federal employment and switched

to FERS upon reemployment. There are a number of major differences between CSRS and

FERS, including (1) the requirements for retirement with an immediate annuity (or pension);

(2) the requirements for retirement with a deferred annuity; (3) required payments into the

retirement system while working; and (4) the formula by which the annuity is calculated.

Some, but not all, of these differences will be discussed below. For more detailed information

on these differences, see the CRS Report 98-810, “Federal Retirement Programs: Benefit

Structure and Financing Concepts” September 21, 1998, by (name redacted).

To qualify for military retired pay, reservists normally must have 20 years of qualifying

military service, the last eight of which must have been in the reserves, and be at least 60

years of age. Since the end of the Cold War, however, these requirements have been

temporarily lowered to facilitate reserve force reductions.

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to their retirement options under CSRS and FERS, not to their retirement options

under the military retirement system. Therefore, this report will focus primarily on

describing current retirement options for military technicians under CSRS and FERS

and analyzing how various legislative proposals would modify those options.

Civil Service Retirement Options

for Military Technicians

The civil service retirement options for military technicians are nearly identical

to those available to most other civil servants.9 However, there are certain categories

of civil servants – federal law enforcement officers, firefighters, air traffic controllers

and nuclear materials couriers – who have been granted more generous retirement

options in recognition of the exceptionally rigorous demands of their professions.

Compared to most other federal employees, these “special category” federal

employees are allowed to retire voluntarily with a lower combination of age and years

of service and their pensions are computed using a more generous formula. “Special

category” employees are also subject to mandatory retirement10 and usually contribute

a higher percentage of their pay to CSRS or FERS than do other federal employees.

(A comparative summary of the various retirement options for military technicians,

federal employees in general, and “special category” federal employees is contained

later in this report).

Representatives of various military technician associations argue that military

technicians deserve to be placed in a category similar to that enjoyed by “special

category” federal employees. As members of the Selected Reserve, dual-status

military technicians are required to meet the same physical fitness requirements that

other members of the military, active and reserve, are required to meet. They may

also be called to active duty and deployed in the event of war or national emergency

and, in the case of National Guard technicians, may be mobilized to respond to

domestic disasters and civil disturbances. These work conditions, technicians argue,

are exceptionally demanding and similar in rigor to those of law enforcement officers,

firefighters, air traffic controllers, and nuclear materials couriers. Thus, in their

opinion, military technicians should be allowed to retire with the same combinations

of age and years of service as these “special category” federal employees.

Additionally, some argue, their pensions should be calculated using the higher accrual

rate that “special category” federal employees enjoy. (A more detailed examination

of various proposals to improve the retirement options for military technicians is

contained later in this report).

There are two exceptions; however, they are both advantageous to military technicians. See

the sections of this report entitled “Involuntary Retirement Requirements: Discontinued

Service” and “Involuntary Retirement Requirements: Disability.”

The ages at which “special category” federal employees are required to retire are as follows:

57 for law enforcement officers, 56 for air traffic controllers, 55 for firefighters. Dual status

military technicians do not have a mandatory retirement age. Non-dual-status technicians do

not have a mandatory retirement age per se, but are required to retire once they become

eligible for an unreduced annuity provided they are at least 60 years of age.

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Opponents of this proposal argue that military technician duty is not as arduous

as that performed by federal law enforcement officers, fire fighters, nuclear materials

couriers, and air traffic controllers. The civilian duties of most military technicians,

they contend, are about as arduous as those performed by federal civilian employees

generally. Typical civilian duties of military technicians consist of administration,

maintenance, training, and management, and range from sedentary to moderately

active. While conceding that due to their reserve membership, dual-status technicians

must meet strict physical fitness requirements and are occasionally deployed in the

event of war or national emergency, opponents argue that they are compensated for

this through the military retirement system.11 Additionally, as the more arduous

aspects of their jobs result from their reserve membership, they contend that the

situation of military technicians is little different from that of other federal civilian

employees who are members of the reserves. Finally, opponents point out that there

are substantial costs associated with early retirement proposals, including the cost of

replacing and training technicians who retire early.

Comparison of Retirement Options for Different

Types of Federal Employees

Federal employees are covered by one of two retirement plans: The Civil Service

Retirement System (CSRS) or the Federal Employees Retirement System (FERS).

The former covers most federal employees who were initially hired before January 1,

1984. The latter covers all federal employees who were initially hired on or after that

date, along with some federal employees who switched from CSRS to FERS. A key

element of both of these systems is the provision of an “annuity,” also called a

pension, to federal employees who leave federal service after meeting certain

retirement criteria. There are several different types of annuities.

An immediate annuity is one which the employee is eligible to receive

immediately upon separation from federal service. In order to receive an immediate

annuity, a federal employee must meet certain combinations of age and years of

federal service. Usually, federal employees need to meet the age and years of service

combinations classified as “voluntary retirement requirements.” These requirements

can vary depending on the type of work the federal employee does. (See the section

on voluntary retirement requirements below, especially tables 1 and 2). Under certain

circumstances, however, a federal employee may be eligible for an immediate annuity

with a lower combination of age and years of federal service than is required for

voluntary retirement. These are called “involuntary retirement requirements.” (See

the sections on discontinued service retirement and disability retirement below,

including tables 3 and 4). Finally, if a federal employee does not meet the criteria for

an immediate annuity, he or she may still be eligible for a deferred annuity. (See the

section on deferred annuities below, especially tables 5 and 6). A description of the

various retirement options and how they compare follows.

See footnote 8 for more information on military retirement for reservists.

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Immediate Annuity

Voluntary Retirement Requirements.

Under CSRS, federal employees can voluntarily choose to retire and receive an

immediate annuity after becoming 55 years of age with 30 years of federal service,

after becoming 60 years of age with 20 years of service, or after becoming 62 years

of age with five years of service. Under FERS, federal employees can voluntarily

retire and receive an immediate annuity after reaching the minimum retirement age

(between 55 and 57, depending on the employee’s year of birth) with 30 years of

service, after reaching 60 years of age with 20 years of service, or after reaching 62

years of age with five years of service. Additionally, FERS eligible employees may

voluntarily retire and receive an immediate annuity if they have at least 10 years of

service and have reached the minimum retirement age (55/57). However, this annuity

is reduced by five percent for each year below the age of 62 the employee is at the

time of separation.12

Certain categories of federal employees may voluntarily retire and receive an

immediate annuity with a lower combination of age and years of service than normally

required, in recognition of the exceptionally rigorous demands of their professions.

Under CSRS, a federal employee who chooses to retire after reaching 50 years of age

and completing 20 years of service as a law enforcement officer, firefighter, nuclear

materials courier, or air traffic controller is eligible to receive an immediate annuity.13

Air traffic controllers are also eligible to receive an immediate annuity with 25 years

of service, regardless of age.14 Under FERS, a federal employee who chooses to

retire after reaching 50 years of age and completing 20 years of service as a law

enforcement officer, member of the Capitol Police, firefighter, nuclear materials

courier, or air traffic controller is eligible to receive an immediate annuity.

Additionally, federal employees with 25 years of service in these professions,

regardless of age, may voluntarily retire and receive an immediate annuity.15

Also, under both CSRS and FERS, agencies may offer voluntary retirement at age 50 with

20 years of service and at any age with 25 years of service if the agency is undergoing a

reorganization or downsizing.

5 USC 8336(c) and (e)

5 USC 8336 (e)

5 USC 8412 (d) and (e)

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Table 1: Voluntary Retirement Under CSRS

Federal Employees Generally

(Includes Military

Technicians)

Age & Years of

Service

Required Payments

Towards Retirement16

Accrual Rate for17

Annuity

(RATE)

“Special Category” Federal Employees

Law Enforcement, Fire

Fighter, Nuclear

Material Courier

Air Traffic Controller

55 & 30

Any Age & 25

60 & 20

50 & 20

62 & 5

7.0% of salary

(No Social Security

tax)

7.5% of salary

(No Social Security

tax)

7.0% of salary

(No Social Security

Tax)

1.5% for first five

years

1.75% for second five

years

2.0% for all

subsequent years

2.5% for first 20

years

2.0% for subsequent

years

1.5% for first five

years

1.75% for second five

years

2.0% for all

subsequent years

But annuity may not

be less than 50

percent

Annuity Based On

(BASE)

High-3 Salary

Annuity Formula

RATE x BASE

As of January 1, 2001. Effective until December 31, 2002. 5 USC 8334 (c).

5 USC 8339 (a), 5 USC 8339 (d)(1), and 5 USC 8339(e).

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Table 2: Voluntary Retirement Under FERS

“Special Category” Federal Employees

Federal EmployeesGenerally (Includes

Military Technicians)

Law Enforcement, Fire

Fighter, Nuclear

Materials Courier,

Capitol Police

Air Traffic Controller

MRA18 & 30

Any Age & 25

60 & 20

50 & 20

62 & 5

MRA19 & 10

(reduced benefits if

under age 62)

MRA & 10

(reduced benefits if

under age 62)

MRA & 10

(reduced benefits if

under age 62)

Required Payments

Towards Retirement

0.8% of salary

(plus Social Security

tax)

1.3% of salary

(plus Social Security

tax)

1.3% of salary

(plus Social Security

tax)

Accrual Rate for

Annuity

(RATE)

1.0 % per year if

employee retires

before age 62

1.7% per year for

first 20 years

1.0% for subsequent

years20

1.7% per year for

first 20 years

1.0% for subsequent

years21

Age & Years of

Service

1.1% per year if

employee retires at

age 62 or later with at

least 20 years of

service

Annuity Based On

(BASE)

High-3 Salary

Annuity Formula

RATE x BASE

MRA stands for minimum retirement age and varies from 55 to 57 depending on the

employees year of birth.

See footnote 18.

Does not apply if employee retires with the “62 & 5" or “MRA & 10" options. In those

cases, the annuity accrual is the same as it is for federal employees generally. 5 USC 8415

(d).

Does not apply if employee retires with the “62 & 5" or “MRA & 10" options. In those

cases, the annuity accrual is the same as it is for federal employees generally. 5 USC 8415

(d).

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Involuntary Retirement Requirements: Discontinued Service.

In certain circumstances, federal employees become eligible for an immediate

annuity with a lower combination of age and years of service than required for

voluntary retirement. One set of circumstances is referred to as “discontinued

service.” This refers to an employee who is involuntarily separated from federal

service, except by removal for cause on charges of misconduct or delinquency.22

Typical causes of involuntary separation include reductions in force (RIF),

abolishment of positions, and unacceptable performance not related to misconduct.23

With respect to military technicians, this would include separations from their civil

service position due to the involuntary loss of their military membership or the loss

of the rank required to hold their military position.24 Involuntary separation could

also occur if the technician were promoted to a military rank in excess of that

specified for the technician position.

Under CSRS, a federal employee who meets the conditions of “discontinued

service” is entitled to an immediate annuity if he or she has 20 years of service and is

at least 50 years of age, or if he or she has 25 years of service regardless of age.

However, if the employee is under the age of 55 at the time of separation, the annuity

rate is reduced by two percent for each year the employee is below the age of 55.

This provision applies to nearly all federal employees,25 including military technicians

and “special category” federal employees.26

Under FERS, a federal employee may qualify for a discontinued service

retirement with the same combinations of age and years of service as under CSRS, but

there is no reduction in annuity if he or she is under the age of 55 at the time of

5 USC 8336 (d)(1) and 5 USC 8414(b).

CSRS and FERS Handbook, Ch 44 Section 44A, p. 3

Involuntary loss of reserve membership can include the following: loss of military status due

to non-selection by a retention board, failure to get promoted within the prescribed period of

time, failure to meet certain medical requirements, and failure to meet physical fitness

standards due to a medical condition. A failure to meet physical fitness standards that is not

the result of a medical condition is considered a voluntary action, and does not entitle the

technician to retirement under this section.

In some circumstances, senior executives of the federal government may be exempted from

the two percent reduction.

Note, however, that “special category” employees can often retire under the voluntary

retirement provision rather than under the discontinued service retirement provision due to the

lower age and years of service requirements they have for voluntary retirement. In this way,

they can avoid the two percent reduction. However, this is not always the case. For example,

under CSRS, an air traffic controller who was 45 years of age with 25 years of service and

who was involuntarily separated from his job would eligible for a discontinued service

retirement; however, he could choose to retire under the voluntary retirement provisions

instead. A similarly situated federal law enforcement officer, though, would have to accept

retirement under the discontinued service provisions as he or she would not yet be eligible for

voluntary retirement.

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separation. This provision (5 USC 8414(b)) applies to all federal employees,

including military technicians and “special category” federal employees.

However, under FERS, there is an additional provision written specifically for

military technicians (5 USC 8414 (c)) . This provision appears to be redundant with

the general discontinued service provision mentioned in the previous paragraph, but

in one important way the military technician provision is more generous. Under this

special provision, military technicians who are involuntarily separated27 from their

positions “by reason of being separated from the Selected Reserve...or ceasing to hold

the military rank specified” may qualify for an immediate annuity with the following

combinations of age and years of service: 50 years of age and 25 years of service as

a military technician if hired on or before February 10, 1996; 50 years of age and 20

years of service as a dual status technician or at any age with 25 years of service as

a dual status technician if hired after February 10, 1996.28 ( Note that for those hired

on or before February 10,1996, the age and years of service combinations are higher

5 USC 8414(c) does not actually use the word “involuntary” to describe the type of

separation. It says “An employee who was hired as a military reserve technician...and who

is separated from technician service...by reason of being separated from the Selected Reserve

of the employee’s reserve component or ceasing to hold the military grade specified by the

Secretary concerned for the position held by the employee is entitled to an annuity.” However,

in describing the intent of this legislative provision, the conference report which accompanied

it stated “Finally, the conference agreement provides that military reserve technicians

separated from the civil service because of losing military status through no fault of their own

[emphasis added] may retire at age 50 with 25 years of service.” House Conference Report

No. 99-606, May 16, 1986, 133. Thus, the Office of Personnel Management has interpreted

5 USC 8414(c) to apply only to military technicians whose loss of military membership is

involuntary. See footnote 24 for a discussion of what constitutes involuntary loss of military

membership. This provision was amended in 1999 by P.L. 106-65, the National Defense

Authorization Act for Fiscal Year 2000. This act lowered the age and years of service

requirement for retirement under 5 USC 8414(c) for military technicians hired after February

10, 1996. See footnote 28 for a more detailed discussion of that date’s significance.

The rationale for the date – February 10, 1996 – deserves mention. As mentioned earlier,

military technicians are generally required to maintain membership in the Selected Reserve

as a condition of their federal civilian employment. This is referred to as the “dual status”

requirement. Up until February 10, 1996, the strictness of the “dual status” requirement

varied widely among the various reserve components which employ technicians. In the Air

Force Reserve, for example, technicians who lost their reserve membership almost always lost

their civil service jobs as well. In the Army Reserve, on the other hand, technicians who lost

their reserve membership were often allowed to continue working in their technician positions.

February 10, 1996, was the date of enactment for the National Defense Authorization Act for

Fiscal Year 1996 (P.L. 104-106, 110 Stat. 306). This act contained a provision establishing

a strict dual-status requirement for all newly hired technicians. Under it, technicians who

were hired after February 10, 1996, had to be promptly separated from their technician

positions upon losing reserve membership. Technicians who were hired on or before this date

were not affected by this law in the same way. (For more information on this topic, see the

CRS Report RL30487, “Military Technicians: The Issue of Mandatory Retirement,” March

28, 2000, by (name re dacted)).Thus, the date of February 10, 1996 serves as a demarcation

line between those technicians hired under the strict, congressionally mandated, dual status

requirement, and those hired under the more diverse standards employed by the individual

services.

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than under the general discontinued service provision. The combinations are not

higher for those hired after February 10, 1996, but at least 25 years of their service

must be as a dual status technician if under age 50, or at least 20 years as a dual

status technician if over that age). The benefit of retiring under this provision, rather

than the general discontinued service provision, is that it entitles the military

technician to an “annuity supplement”29 regardless of his or her age. Under the

general discontinued service provision available to all federal employees, an annuity

supplement is payable, but only if the retiree has reached the minimum retirement

age.30

Table 3: Discontinued Service Retirement Under CSRS

All Federal Employees, Including Military Technicians

and “Special Category” Employees31

Age & Years of Service

Any Age & 25

(reduced benefits if under age 55)

50 & 20

(reduced benefits if under age 55)

An annuity supplement is, as its name indicates, an additional payment to the retiree. The

function of the FERS annuity supplement is to approximate the Social Security benefit earned

during federal employment until the retiree actually becomes eligible for Social Security at age

62; it ceases at that time. The formula for calculating the supplement is complex and varies

from individual to individual, but it can be a significant financial benefit.

The minimum retirement age varies from 55 to 57 depending on the employees year of birth.

See footnote 26 for a discussion of how “special category” employees who are eligible for

discontinued service retirement often choose to retire under the voluntary retirement

provisions, thereby avoiding the two percent reduction.

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Table 4: Discontinued Service Retirement Under FERS

All Federal Employees,

Including Military Technicians

and “Special Category”

Employees

Age & Years of Service

Additional Provisions for

Military Technicians Only

IF HIRED AFTER FEB 10,

1996

Any Age & 25

(no reduction in benefits if under

age 55; eligible for annuity

supplement if minimum

retirement age has been reached)

Any Age & 25

(no reduction in benefits if under

age 55; eligible for annuity

supplement regardless of age;

years of service must be as “dual

status” technician)

50 & 20

(no reduction in benefits if under

age 55; eligible for annuity

supplement if minimum

retirement age has been reached)

50 & 20

(no reduction in benefits if under

age 55; eligible for annuity

supplement regardless of age;

years of service must be as “dual

status” technician)

IF HIRED ON OR BEFORE

FEB 10, 1996

50 & 25

(no reduction in benefits if under

age 55; eligible for annuity

supplement regardless of age;

service can be as “dual-status” or

“non-dual-status”)

Involuntary Retirement Requirements: Disability.

Under both CSRS and FERS, federal employees who are unable “to render

useful and efficient service” in their positions “due to a disease or injury” are eligible

for disability retirement if (1) they meet the minimum civilian service requirement and

(2) they cannot be reassigned to a position, of the same grade or level, where they

would be able to perform useful and efficient service.32 With respect to the minimum

service requirement, an employee needs five years of federal civilian service to be

eligible for disability retirement under CSRS. Under FERS, an employee needs 18

months of service.33 All federal employees, including military technicians and “special

See 5 USC 8337(a) and 5 USC 8451(a).

FERS was designed to be integrated with the Social Security system. The 18 month service

requirement for disability retirement parallels the service requirement under Social Security

disability rules.

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category” employees, are treated the same with respect to these time in service

requirements.

Military technicians, however, do have a special provision in both CSRS and

FERS which provides them with a more generous standard for determining disability.

Specifically, they are eligible for disability retirement if they are separated from

employment as a military technician by reason of a disability that disqualifies the

individual from membership in the Selected Reserve, even if they would not be

considered disabled under the disability standard mentioned in the previous

paragraph.34 Thus, a disability which renders a technician unfit for his or her military

duties, but not for his or her civilian duties, would be able to retire under these

provisions.35 The utility of these provisions for technicians appears to be

considerable, as a sizable percentage of military technician retirements occur under

them.36

Deferred Annuity

Those federal employees who are separated from federal service with more than

5 years of service, but without the required combinations of age and years of service

to be eligible for an immediate annuity, are eligible for a deferred annuity. As the

name implies, the employee does not receive an annuity immediately upon separation

from federal service, but at a later date. Under CSRS, someone who is separated

from federal service with at least five years of service begins receiving an annuity

upon reaching the age of 62. Under FERS, deferred annuities may begin on an

unreduced basis at the minimum retirement age (55/57) with 30 years of service, at

age 60 with 20 years of service, and at age 62 with 5 years of service. Additionally,

under FERS, deferred annuities may begin on a substantially reduced basis at the

minimum retirement age (55/57) if the employee had at least 10 years of service. As

indicated below, all federal employees have the same age and years of service

requirements for a deferred annuity.

5 USC 8337(h) and 5 USC 8456.

Remember that most military technicians are required to hold membership in the Selected

Reserve as a condition of their employment. These technicians are referred to as “dual-status

technicians.” (See the section entitled “What is a Military Technician” for more information

on this). Thus, in the absence of these special disability provisions, dual-status technicians

who suffered a disability that rendered them unfit for military duty, but not for civilian duty,

would be promptly separated from technician service without any disability retirement

benefits.

For example, in 1999, a total of 993 military technicians in the National Guard retired. Of

these, 235 (23.6%) retired under the special disability provision for military technicians, while

only 78 (8%) retired under the regular disability provisions applicable to all federal

employees. Source: U.S. Office of Personnel Management, Retirement Policy Division.

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Table 5: Deferred Annuity Under CSRS

All Federal Employees, Including Military Technicians

and “Special Category” Employees

Years of Service

5 or more

Age at Which Annuity Begins

Table 6: Deferred Annuity Under FERS

FERS

All Federal Employees, Including Military Technicians

and “Special Category” Employees

Years of Service

5-19

20-29

30 or more

10-29

Age at Which Annuity Begins

MRA

(reduced

annuity)

Bills Introduced in the 106th and 107th Congress to

Improve Retirement Options for Military

Technicians

Two bills – H.R. 1079 and S. 1883 – were introduced in the 106th Congress

which, if enacted, would have modified the retirement options available to military

technicians. Both of these bills are analyzed below. The Senate version of the

National Defense Authorization Act for Fiscal Year 2001 (S. 2549/H.R. 4205), a bill

in the 106th Congress, contained a provision nearly identical to S. 1883. It is

mentioned briefly below, but the reader should refer to the section on S. 1883 for

analysis of this provision. One bill – S. 155 – has been introduced in the 107th

Congress. It is virtually identical to S. 1883. It is mentioned briefly below, but refer

to the section on S. 1883 for analysis of its provisions.

Analysis of H.R. 1079 (106th Congress)

This bill, sponsored by Representative Abercrombie, would have modified both

CSRS and FERS to allow military technicians to retire voluntarily after 25 years of

technician service, or after becoming 50 years of age and completing 20 years of

service. Such a change would have been beneficial to technicians in two ways. First,

it would have allowed technicians to retire voluntarily with a lower combination of

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age and years of service than is currently required of them. Under this legislation,

FERS-eligible military technicians would have been allowed to retire with the same

combinations of age and years of service as are currently enjoyed by “special

category” employees. Additionally, CSRS-eligible military technicians would have

enjoyed more generous retirement eligibility criteria than most “special category”

employees. Specifically, federal law enforcement officers, firefighters, and nuclear

materials couriers who participate in CSRS can voluntarily retire at age 50 with 20

years of service, but they are not allowed to voluntarily retire at any age with 25 years

of service.37 Second, it would have enhanced the financial benefits for retiring military

technicians, although not to the level enjoyed by “special category” employees.

Specifically, under this legislation, CSRS-eligible military technicians would have been

able to avoid the two percent annuity reduction which sometimes comes with retiring

under the discontinued service retirement (DSR) provisions of CSRS, and FERSeligible military technicians would be entitled to the payment of the annuity

supplement described in footnote 29 regardless of age.

In the 106th Congress, H.R. 1079 bill was referred to House Committee on

Government Reform, Subcommittee on Civil Service. The bill was not reported out

of the subcommittee.

Analysis of S. 1883 (106th Congress)

This bill, sponsored by Senator Bingaman, would have modified both CSRS and

FERS to allow military technicians to retire earlier than they are currently allowed to

do. When Senator Bingaman introduced the bill, he specifically stated that it was a

companion bill to the one introduced by Representative Abercrombie (H.R. 1079) and

that “This bill would permit Dual Status Technicians to retire at any age with 25 years

of service or at 50 with 20 years of service. Those benefits are similar to benefits

provided to Federal police and fire employees.”38 Thus, it appears that the intent of

H.R. 1079 and S. 1883 are the same: to allow military technicians to retire voluntarily

with 25 years of service, or at age 50 with 20 years of service, just like H.R. 1079.

However, despite their similar intent, H.R. 1079 and S. 1883 were written

differently. Unlike H.R. 1079, which would have added new provisions to both CSRS

and FERS, S. 1883 would have amended an existing provision of FERS – 5 USC

8414(c) – and then added a new provision to CSRS which applies the newly modified

FERS provision to CSRS as well. As mentioned earlier, 5 USC 8414(c) allows

certain military technicians to qualify for an immediate annuity with the following

combinations of age and years of service: 50 years of age and 25 years of service as

a military technician if hired on or before February 10, 1996; 50 years of age and 20

years of service as a dual status technician or at any age with 25 years of service as

a dual status technician if hired after February 10, 1996. S. 1883 would modify this

These federal employees would undoubtedly feel that they were being treated unfairly if they

did not enjoy retirement options equal to or superior to those enjoyed by military technicians.

Hence, passage of this type of bill would likely inspire CSRS-eligible law enforcement

officers, firefighters, and nuclear materials couriers to demand improvement of their

retirement options.

Congressional Record, Senate, November 9, 1999, S14297.

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by permitting all those hired on or before February 10, 1996, to qualify for an

immediate annuity at age 50 with 20 years of service or at any age with 25 years of

service. The legislation would not require that the years of service for technicians

hired on or before February 10, 1996, be service as a dual-status technician as is

required for those hired after February 10, 1996.

Additionally, it is important to point out that 5 USC 8414(c) has historically been

interpreted to apply only to those military technicians who have been involuntarily

separated from their civil service positions “by reason of being separated from the

Selected Reserve...or ceasing to hold the military rank specified.” As such, there is

some uncertainty as to whether amending this provision of the law would allow

military technicians to retire under its provisions voluntarily.

S. 1883 was referred to the Committee on Governmental Affairs, Subcommittee

on International Security, Proliferation and Federal Services. It was not reported out

of the subcommittee. (However, Senator Bingaman did offer S. 1883 in amendment

form to S. 2549, the Department of Defense Authorization Act for Fiscal Year 2001.

See below).

Comment on Section 651 of S. 2549/H.R. 4205 (106th Congress)

On the floor of the Senate, Senator Bingaman offered an amendment to S. 2549,

the National Defense Authorization Act for Fiscal Year 2001. The amendment

(#3244) was essentially S. 1883 in amendment form, and it was approved on a voice

vote. See the section on S. 1883 above for analysis. S. 2549 was later amended into

the House version of the Defense Authorization bill, and the bill was thereafter known

as H.R. 4205. A similar provision was not included in the House version of H.R.

4205 and during the House-Senate conference the provision was dropped.

Comment on S. 155 (107th Congress)

S. 155, introduced by Senator Bingaman, is virtually identical to S. 1883, the bill

he introduced in the 106th Congress. See the section on S. 1883 above for analysis.

The bill has been referred to the Committee on Government Affairs.

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