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STATEMENT OF THE HONORABLE DANNY K DAVIS
AT THE SUBCOMMITTEE ON CIVIL SERVICE
AND AGENCY ORGANIZATION

HEARING ON

Federal Law Enforcement Personnel in the Post 9/11 Era:
How Can We Fix An Imbalanced Compensation System.

Wednesday, July 23, 2003

Chairman Davis, federal officers, in varying degrees and capacities, uphold the

Constitution and protect the public welfare. Over the years, however, there has been

much debate and controversy, with no permanent resolution, on which types of federal

employees should be classified as “law enforcement officers," and as such, should

receive enhanced pay and retirement benefits.

In 1988, the Anti-Drug Abuse Act established the National Advisory Commission

on Law Enforcement (the Commission) which studied the pay, benefits, and other issues

related to the recruitment and retention of employees defined as “law enforcement" under

federal retirement laws. The Commission's report, which was released in April 1990,

made several recommendations for interim pay enhancements for law enforcement

officers and suggested that the Office of Personnel Management (OPM) conduct a further

a

study on the need for a new pay system for federal law enforcement.

The Commission's report did note, however, that the statue defining “federal law

enforcement officer" was broad, encompassing both traditional positions within the field

and less traditional positions not generally considered part of the law enforcement

community.

As recommended by the Commission, Congress enacted the Federal Employees

Pay and Comparability Act of 1990 (FEPCA), which enhanced law enforcement pay and directed OPM to conduct a study of the pay and job evaluation for federal law

enforcement officers. OPM, along with a 45-member advisory committee drawn from

law enforcement agencies and employee groups, produced in September 1993 a report

entitled, “A Plan to Establish a New Pay and Job Evaluation System for Federal Law

Enforcement Officers. Two months later, the Subcommittee on Post Office and Civil

Service held a Subcommittee hearing on the report and its findings.

At that hearing, Ms. Barbara Fiss, who testified on behalf of OPM stated, “OPM

determined at the outset that the definition of law enforcement officer used in the FEPCA

provisions, based on retirement law, needed to be examined because it covers employees

whose primary duties included such diverse jobs as health care, accounting, and cooking;

but excluded employees whose primary duties include maintaining law and order and

protecting, property and the civil rights of individuals. OPM's fact-finding visits

confirmed OPM's belief that the coverage issue had to be reconciled."

In a hearing this Subcommittee held on this same subject in 1999, OPM said

much the same thing. William Flynn, at that time Associate Director for Retirement and

Insurance at OPM, testified at the hearing that, “We believe that to simply consider

whether to add certain specified groups to coverage under the existing provisions is much

too limited an inquiry. Instead, it is time to reexamine the program and its history. We

must first determine what human resources management needs should be addressed.

Then, we must analyze how those needs can best be addressed in a cost-effective manner

that is fair to both employees and the taxpayers."

This subcommittee is again holding a hearing on the classification and pay of

federal law enforcement officers with no comprehensive solution to the problem.

Determining the definition of a federal law enforcement officer is clearly a very complex

and controversial issue. This hearing is an opportunity for us to revisit this issue and

find permanent solutions to concerns that have been raised in the past and that are still

lingering today.

“Federal Law Enforcement Personnel in the Post 9/11 Era:
How Can We Fix an Imbalanced Compensation System?"

OPM's Responses to Follow-up Questions from the
House Subcommittee on Civil Service and Agency Organization

Question:

I understand that OPM has traditionally insisted that pay enhancements should be used to compensate for the hazards employees face and that special retirement benefits should not be used for that purpose, but rather to encourage earlier retirements, which in turn benefits the organization by ensuring a young and vigorous workforce. If this is still the case, please explain your thinking in this area.

Answer:

There are various forms and degrees of hazard encountered by different employee groups. Because of these

OPM has consistently stated that the best way to compensate employees for hazards encountered in employment is through the pay-setting process. The legislative history on law enforcement retirement benefits clearly indicates that law enforcement retirement benefits were intended to be a workforce management tool to maintain a young and vigorous workforce through youthful career entry, continuous service, and early separation. Several provisions in the law work in combination to accomplish these goals. These provisions include the authority for agency heads to set a maximum entry age (typically 37) for law enforcement officers (LEOs), early retirement with an enhanced annuity computation, and a mandatory separation age (typically 57). The enhanced annuity formula, which consists of a higher per year accrual rate than applies to regular employees, was added to the law in 1974 to enable application of a mandatory retirement requirement without economic hardship to affected individuals.

If the statutory scheme (i.e., maximum entry age, early retirement with an enhanced annuity, and mandatory separation) is altered, this raises the issue of whether the LEO early

enhanced retirement program is serving as a workforce management tool or merely as a reward for certain types of work. If, for example, LEOs are expected to enter employment beyond 37, to work longer, or are not subject to early retirement or mandatory separation, it becomes increasingly difficult to explain an enhanced formula designed to compensate an employee for a shortened career. Rather, it becomes a reward for certain types of work. Therefore, if LEO retirement benefits are to be retained as a viable program, the goal of the program must remain the management of law enforcement workforces for

a

Question:

You have stated that the purpose of law enforcement retirement is the maintenance of a "young and vigorous” workforce. Does the statutory scheme of maximum entry age, mandatory retirement, and early retirement actually create a young and vigorous law enforcement workforce?

Answer:

Yes. The retirement section of OPM's June 30 report to Congress
(Appendix I) contains a statistical analysis of selected employee groups
with and without LEO retirement coverage. The statistical analysis
indicates that groups with LEO retirement coverage are, on average,
younger
than groups

without LEO retirement coverage. OPM's analysis indicates that 75 percent of selected employee groups with LEO coverage are younger than 45, while only 57 percent of the selected employee groups without LEO coverage are under age 45.

Question:

We have a continuing problem, as you know, with piecemeal solutions to Government-wide issues. If Congress were to require from OPM a report with options and recommendations for a comprehensive solution to the current pay and benefits disparities of law enforcement personnel across Government, could you do it and do you think that would be helpful?

Answer:

Your interest in options for a comprehensive solution to the current pay and benefits disparities applicable to Federal law enforcement personnel coincides with OPM's current joint responsibility with the Department of Homeland Security (DHS) to develop a new pay system that will cover many LEOs. Section 881 of the Homeland Security Act of 2002 (Public Law 107-296, November 25, 2002) required that the Secretary of Homeland Security, in consultation with the Director of OPM, submit a plan to Congress for ensuring the elimination, to the maximum extent practicable, of unwarranted disparities in the pay and benefits of employees being transferred to DHS. In response to this requirement, DHS submitted a report to Congress on March 5, 2003, providing information on possible disparities warranting further review.

That report pointed out that the issue of pay and benefits disparities is integral to the design and establishment of a new Human Resources Management (HRM) system for DHS employees, as authorized under 5 U.S.C. 9701 (enacted by Section 841(a)(2) of the Homeland Security Act). The report further stated that it would be premature to make recommendations regarding the resolution of possible disparities, since DHS and OPM intend to propose new HRM systems for DHS later this year, after collaboration with key stakeholders, including employee representatives.

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