Kilmer Bill Helps Federal Workers Who Started in Temporary Role
Allen Hodge will be ready to retire after working at the Puget Sound Naval Shipyard for almost three decades, but a wrinkle in the federal retirement system could force him to work years longer before he's eligible for a full retirement.
Hodge, 54, was hired as a temporary employee at the shipyard's paint shop in 1989. He was converted into a full-time, permanent position five years later after being laid off and furloughed a few times in between.
Today, he is a manager in the same shop where his career began all of those years ago.
Hodge planned to retire in 2020 at the age of 57, after reaching the required 30 years of service for a federal employee to retire with full benefits before reaching the age of 62.
"I've done my time here," he said. "It's time for the changing of the guards."
But when he started to plan for retirement, he learned the years that he worked as a temporary employee didn't count toward it because of a change in the federal system that went into effect the year he was hired at the shipyard.
Under the new system, employees who transitioned into full-time positions could no longer retroactively contribute to their retirements for the time they worked as temporary employees, although they had been able to do so under the previous system.
As a result, Hodge is now witnessing other employees retire who were hired at the shipyard as permanent employees after he started there. He must either work longer or retire early by the government's standards with penalties to his benefits.
"It's hard to keep a good attitude, but as a manager I do it," Hodge said. "We're starting to see more people leave and it's very frustrating."
After seeking out other avenues for assistance without result, Hodge and a few other shipyard workers sought help from U.S. Rep. Derek Kilmer.
After learning about the complexities of Hodge's case, Kilmer said he saw an opportunity to right what he says is a wrong.
"This is an issue that impacts the largest employer in our area — the federal government," Kilmer said. "We know there are a lot of workers in our area that are really affected by this."
The shipyard, which is Bremerton's largest employer, currently has about 13,700 employees, said shipyard spokesman J.C. Mathews.
About 950 shipyard employees are eligible for retirement. Some of those employees could immediately start receiving annuity payments, while others would have to wait some time to receive their full benefits, Mathews said.
Within the next five years, more than 2,300 shipyard employees will be eligible for retirement.
Kilmer introduced the bipartisan Federal Retirement Fairness Act on March 22, which would allow employees to retroactively contribute toward their retirement for time spent as temporary employees. The bill is co-sponsored by U.S. Rep. Walter Jones, R-North Carolina.
When the federal government's new retirement system came into effect, Kilmer said the new rules inexplicably did not give employees the option to contribute for time worked with a temporary status. As members of the first generation of federal workers under the new system get ready to retire, they're starting to notice the impact of that decision.
"Now those employees may be in the position of having to work years longer or making the decision to retire with less," Kilmer said. "That’s why this bill matters."
Under the proposed legislation, employees would be able to make catch-up payments with interest toward their retirement, but they'll have to cover the government's contribution as well to minimize the hit to the federal budget, Kilmer said.
Although that means more money out of pocket up front for federal employees, it will give them the opportunity to be able to receive a full retirement for all of the years they worked for the government.
"I think that part of that would increase the likelihood we could get this passed and move it forward," Kilmer said.
Hodge estimated it could cost him some $50,000 to cover both his retirement contributions and the government's contributions, which would have to come from his retirement savings account and a reduction of contributions into his thrift savings plan.
"It would kill my bank account," Hodge said.
While the upfront cost would come with a hefty price tag if the bill is passed, Hodge said the opportunity to retire with full benefits would be worth it as well as the chance to finally be able to definitively plan for his future.
"How can I plan my life for retirement when I don't even know when I can retire?" Hodge said.
By: Julianne Stanford
Source: Kitsap Sun