Congressional Research Service
The Library of Congress Washington, D.C. 20540
June 22, 1989
FROM: Carolyn L. Merck
Specialist in Social Legislation
Education and Public Welfare Division
SUBJECT: Retirement Credit for Part-Time Employment in the Department of Medicine and Surgery, Department of Veterans' Affairs
Pursuant to our conversation last week, I have looked into the issue of how part-time employees of the Department of Medicine and Surgery (DM&S) of the Department of Veterans' Affairs receive retirement credit. The legislative history on this topic is complex and begins with a 1980 effort to eliminate what many perceived as an inequity between part-time and full-time employees. It had long been the case that the only difference between the pension of a full-time worker and that of a part-time worker was that the salary used to compute the civil service annuity was the part-time salary. The civil service annuity formula uses, as one factor, the salary received in the average year of the highest-paid 3 years of Federal employment ("high-3"). Thus, if a worker who had been employed part time throughout most of his or her career switched to full-time employment in the last 3 years before retirement, the annuity would be the same as it would be if the worker had always been employed full time. In 1980, the Veterans' Administration, which employs many part-time people in veterans' hospitals ("Title 38" employees), sought legislation to change the civil service retirement formula for those workers. The resulting legislation (P.L. 96-330) used the full-time equivalent salary for the high-3 annuity factor, but multiplied the full pension by the portion of time the person actually worked.
This legislation led to requests to "grandfather" part-time service performed before the change in law; a legislative change was made to accomplish that. In 1986, the law was changed again to prorate pensions for all part-time workers, governmentwide. It included grandfathering of service before enactment and brought Title 38 employees under the retirement policy applicable to everyone else. However, according to the Office of Personnel Management, the Veterans' Administration requested legislation eliminating the grandfathering of previous service for Title 38 employees, and that change was made in the 1986 Omnibus Budget Reconciliation Act. As a result, part-time employees of the DM&S in veterans' hospitals now have past part-time employment counted differently for retirement purposes than do other Federal employees.
Attached is a brief summary of the legislation on this topic and a copy of a report that describes the issue as it was addressed in government-wide legislation in 1986, as well as a document prepared by the Department of Veteran' Affairs.
Please call me at 707-5885 if you have any further questions.