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FPCD-81-42 1 (1981-05-06)

handle is hein.gao/gaobabbzl0001 and id is 1 raw text is: RtESTPFC - .- ~Oa bY tile COMPTROLLER GENERAL OF THE UNITED STATES WASHINGTON O.C. 2054 RELEASED B-197657 MAY 1981 The Honorable Mary Rose Oakar Chair, Subcommittee on Compensation and Employee Benefits Committee on Post Office and Civil Service 115405 House of Representatives Dear Madam Chair: Subject: Ljot of Increas9 Retirement Benefits for Panama Canal Employees/(FPCD-81-42) The Subcommittee's November 15, 1979, letter asked usjto provide information on the appropriateness of theOffice of Pez sonnel Management's (OPM's) cost determination as related to tl increased retirement benefits granted Panama Canal employees by Public Law 96-70 (legislation implementing the Panama Canal Treaty,. The letter mentioned ,he clear intent of the Congress that all increased costs associated with the rAtirement aspects of the legislation be paid from Canal revenues. In our February 14, 1980,\interim reportwe addressed this cledt intent Land expressed c6hcern that un.e'ss OPM charged the Panama Canal Commission on a basis which considered future pay and cost-of-living increases, all costs of increased benefits would not be recovered7 (See enclosure.) LAt the time of this interim report, OPM had not determined the'cost of the extra ber efits; nor had it decided the basis on which the costs would be billed. LOPM has since completed its cost calculations, and the Com- mission has paid the first installment on the increased retire- S....ment costs..,We are still concerned that OPM is basing its charges to the Commisssion on an actuarial method which assumes that Panama Canal employees will never receive pay increases and that, after retirement, they will receive no cost-of-living ad- justments. Because both pay increases and cost-of-living adjust ments will add significantly to the ultimate cost, American tax- payers will be subsidizing the cost of the increased benefits b more than $200 million if OPM continues to use this method. (96600S ,~r41 4

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