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OCG-83-1 1 (1983-08-31)

handle is hein.gao/gaobabncj0001 and id is 1 raw text is: * , ...... COMPTROLLER GENERAL OF THE UNITED STATES . WASHINGTON D.C. 20548 B-211757 AUGUST 31,1983 The Honorable William D. Ford Chairman, Committee on Post Office and Civil Service House of Representatives 122260 The Honorable William V. Roth, Jr. Chairman, Committee on Governmental Affairs United States Senate Subject: Effect Of Requiring New Federal Employees To Be Temporarily Covered By Both Social Security And Civil Service Retirement (GAO/OCG-83-1) We have analyzed the potential effects of requiring Federal employees hired on or after January 1, 1984, to be temporarily covered by both social security and the civil service retirement system. This situation is the result of the April 1983 social security amendments (Public Law 98-21) which provided social security coverage for all newly hired Federal employees, includ- ing former employees who are rehired after a break in service of 1 year or more. A new retirement system to supplement social security coverage for these employees is not expected to be in place by the January 1, 1984, effective date. Therefore, under current law until the new system is established, the employees must also participate in the civil service retirement system (CSRS) and pay the required employee contributions to both systems. Most employees in the civil service system must pay 7 per- cent of their salary into the retirement fund. Members of Congress pay 8 percent, and congressional staff, law enforcement and firefighter personnel pay 7.5 percent. All employees are also required to pay the 1.3-percent medicare tax. Employees hired after January 1, 1984, will also be required to pay social security taxes of 5.4 percent in 1984 and 5.7 percent in 1985. While both social security and medicare taxes currently apply only to the first $35,700 of annual salary, nearly all new employees will receive salaries below this level. Thus, they will be contributing a total of about 14 percent to these programs. (990115) 0

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