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.
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