An Incentivized, Progressive Paradigm for the Federal and Postal Worker

— A carrot may attract rabbits; a dead animal, vultures; a wounded elk, a pack of wolves; a downtrodden man – a man of shameful character.

A Japanese Proverb

These are difficult economic times. For the everyday worker, both Federal and Postal employees, the decisions made at the top echelons of the Federal Government and the U.S. Postal Service impact the financial security and viability of each and everyone. Bad decisions have a cumulative impact upon future alternatives for economic security. Wasted funds thrown at various programs which engendered political favoritism and popular responses at the time, are spent resources which now squeeze out necessary services and programs. But when all is said and done, when a promise is made, it should be kept. For the Federal and Postal Workers who are now being daily lambasted for being on the “public dole”, there should never be any sense of shame or reluctance to assert the benefits which are merely a part of one’s compensation package. Federal Disability Retirement is one such benefit, and it is based upon a successful and progressive paradigm.

Talks of cutbacks and retrenching are in the air. For the Postal Worker of today, elimination of the long tradition of Saturday delivery of first class mail is forthcoming; for the Federal Worker, furloughs are being seriously considered (again) in light of the blind sequestration mechanisms for automatic budget cuts. Such decisions merely place the Federal and Postal Worker at the mercy of political gamesmanship; it addresses none of the systemic problems inherent in the Federal System, for the most vulnerable and needy.

Whether, or to what extent, such political decisions will impact the primary mainstays of compensatory programs offered to injured or medically debilitated Federal and Postal employees – whether it is FERS & CSRS Disability Retirement benefits; Social Security Disability benefits (SSDI); or benefits payable under the Office of Workers Compensation Programs within the purview of the Federal Employees Compensation Act (OWCP/FECA) – only the future will tell. Each such program is necessary in a society which recognizes that dignity of the human condition must acknowledge that those who are injured or incapacitated, should be accorded a minimum of economic security.

Of all of the compensatory programs which impact Federal and Postal Workers, however, it is the Federal Disability Retirement program, for all Federal and Postal Workers under FERS or CSRS, which is based upon the most progressive of paradigms. For, FERS & CSRS Disability Retirement is based upon the idea that just because a Federal or Postal Worker is no longer able to perform all of the essential elements of one’s job, does not mean that he or she cannot become productive in some other capacity, in another sector of the economy. Now, it may be that the injured or impacted Federal Disability Retirement annuitant cannot work at another job; in that event, such a Federal or Postal employee can also (and must, under FERS) file for Social Security Disability benefits (SSDI) – but that is an option which is open, based upon the unique and particular circumstances of each case.

It is the existing incentive which is inherently part of the Federal Disability Retirement program, which makes it the progressive and widely-successful medical retirement program that it is. Under the laws governing Federal Disability Retirement benefits, a Federal or Postal employee receives 60% of the average of one’s highest-3 consecutive years of service for the first year, then 40% every year thereafter, until the age of 62 (at which point it gets converted and recalculated as regular retirement – but note this advantage, also, that the time spent on disability retirement counts towards the total number of years of one’s Federal Service, so that at age 62, all of the time one was receiving Federal Disability Retirement benefits counts towards the total number of years of Federal Service at age 62). On top of the annuity, however, is the progressive incentive for the (now former) Federal or Postal employee receiving Federal Disability Retirement benefits: the Federal or Postal employee can go out into the private sector and earn up to 80% of what one’s former Federal position currently pays, on top of the Federal Disability Retirement annuity one is receiving. Thus, in essence, one has the capability of making a combined 120% (40% after the first year, plus the 80% of allowable earned income) in terms of one’s total income.

For those Federal and Postal employees who are disabled and medical debilitated to such an extent that he or she is unable to take advantage of the incentive of making up to 80% of what one’s former Federal position currently pays, however, there is the availability of obtaining Social Security Disability benefits (SSDI). Now, under FERS, one must file for SSDI anyway; but the chances of obtaining SSDI in addition to FERS was always, and still is, dependent upon the severity of one’s medical conditions. Social Security has a higher requirement of a legal standard – essentially, one requiring proof of “total disability”, where one is unable to engage in substantial gainful activity – in order to qualify (whereas, in contrast, the legal standard for eligibility under FERS is to prove that one cannot perform one or more of the essential elements of one’s particular kind of job). If SSDI is approved, then there is a de facto “coordination of benefits” between FERS Disability Retirement and SSDI, in that there is a 100% offset in the first year of receipt (during the time when the FERS Disability Retirement annuitant is receiving 60% of the average of one’s highest-3 consecutive years), and a 60% offset every year thereafter (during the time when the FERS Disability Retirement annuitant is receiving 40% of the average of one’s highest-3 consecutive years), until age 62, when the recalculation based upon the total number of years of service is performed.

In the past, there has been an ongoing dispute and problem when a person who is receiving both FERS Disability Retirement annuity and SSDI benefits, recuperates from the medical condition enough so that (A) he or she can now engage in “substantial gainful activity” by exceeding the allowable ceiling of earned income under SSDI rules (approximately $1,000 per month) but (B) still not be functionally recuperated to the extent of being able to return or work at one’s former Federal or Postal job, and so to a significant extent, still limited in being able to return to a level of physical or cognitive productivity prior to being approved for FERS Disability Retirement benefits. The problem was that the U.S. Office of Personnel Management refused to recalculate and restore the amount the Federal or Postal employee had lost due to the offset between FERS and SSDI, when the person began to engage in work and lost the SSDI benefits. OPM would argue – and did, for decades – that the former Federal or Postal Worker was still “entitled” to SSDI benefits, even though he or she stopped receiving them.

This is the essence and significance of the recent case of Stephenson v. OPM, decided by the U.S. Court of Appeals for the Federal Circuit on January 18, 2013. That case was argued and won by the undersigned attorney on behalf of Mr. Stephenson, and resulted in the 3-Judge panel of the Court of Appeals for the Federal Circuit to mandate that when a Federal Disability Retirement annuitant who concurrently receives SSDI benefits loses the offsetting SSDI benefits, OPM must recalculate and restore the amount in any given month of such loss of offsets. It is a case which returns statutory interpretation back to a level of sanity which OPM should never have violated in the first place. Moreover, it restores the promises made, and the incentives allowed, for the Federal and Postal Worker who is injured or medically debilitated, but who can reenter the workforce to continue to remain productive and economically active.

The winds of economic change are in the air; adjustments in any expanding society must always be expected. For the Federal or Postal Worker who becomes medically unable to perform one or more of the essential elements of one’s job, the fight to preserve a progressive paradigm which is essential an intelligent and self-paying system – by incentivizing people to continue to actively contribute to payroll, taxes, FICA, etc. — should be safeguarded. Federal and Postal Workers can take heart in the decision of the 3-Judge panel in Stephenson v. OPM, for maintaining and preserving a vital part of the Federal Disability Retirement program and its intersecting coordination with Social Security Disability benefits.

I am an Attorney who represents Federal and Postal workers from all across the United States, including Alaska, Hawaii and Puerto Rico. I do not charge for an initial telephone consultation; thus, if you believe that you need to consult an attorney concerning Federal Disability Retirement, please contact me in one of these ways:


Robert R. McGill, Esquire


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