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FPCD-81-18 1 (1980-12-15)

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                  UNITED STATEs GENERAL ACCOUNTING OFFICE
                          WASHINGTON, D.C. 20548


IFEDRAL PERSONNEL ANO
COMPENSATION DIVISION


     B-201442                                       DECEMBER 15, 1980



     The Honorable Jule M. Sugarman        ~     ~     ~      l
     Deputy Director, Office of Personnel
       Management                                       113973

     Dear Mr. Sugarman:

          Subject: Civil Service Disability Retirement Program
                    &FPCD-81-18)

          In reports issued in 1976 and 1978, we recommended
     several changes to the disability retirement program which
     would serve to retain marginally disabled yet potentially
     productive employees. Those reports concluded that (1) ben-
     efits may have been paid unnecessarily to many retirees,
     (2) disabled Federal employees were not being effectively
     reassigned, and (3).economically and medically recovered
     annuitants were not always being removed from the disability
     retirement rolls.

          We have enclosed the results of our followup review of
     the Office of Personnel Management's (OPM's) actions on our
     previous recommendations.

          We commend OPM's actions to improve its administration
     of the disability retirement program. We are recommending,
     however, that more be done tc reduce the number of annuitants
     added to the rolls and to reduce disability retirement costs.
     These recommendations include (1) retaining more potentially
     productive employees through reassignment and reemployment,
     (2) more effectively removing the economically and medically
     recovered disability annuitants from the rolls, and (3) dis-
     continuing the policy of advising employees to use extended
     sick leave before filing applications for disability retire-
     ment.

          We believe these concerns warrant OPM's immediate atten-
     tion. Resolving them could help considerably in strengthening
     the civil service disability retirement program.


                                                           (963148)

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