Critics called it “double dipping.” For many members of the armed services, it has long carried heavy financial penalties or has been forbidden outright. Now, it is legal.
The term refers to a situation in which an individual receives two government paychecks at the same time-one for retired military pay and another for employment in a federal civilian agency or department.
The Fiscal 2000 defense authorization act, signed by President Clinton Oct. 5, repealed two laws that through the years have forced thousands of military retirees to give up large portions of the first check-for retired pay–as a precondition for taking federal civilian jobs.
The toughest restrictions had applied to retired regular commissioned officers and warrant officers. The Dual Compensation Act of 1964 limited them to keeping roughly the first $10,000 (at the current level) of the retired pay to which they were entitled, plus half of the remainder.
Under this offset penalty, it was possible for a retired regular officer in a low-paying civilian job to wind up with less total income than he would have enjoyed by turning down the federal job and living on retired pay alone.
The 1964 law, however, did not apply to retired regular officers in temporary civilian jobs and did not reduce disability retired pay. Nor did it affect retired reserve officers or retired enlisted members of any component.
The second dual-compensation law, included in the Civil Service Reform Act of 1978, was more sweeping. First, its provisions included disability pay, granting no exemptions. Second, the law covered not only retired regular officers but all retired service members, whether officer, enlisted, or reserve.
This law put a limit on the total amount that any retiree could receive in combined civil service salary and retired pay. The cap was based on the pay of civilians at the bottom (Level V) of the Executive Schedule. In 1999, that amount was $110,700.
The double-dipping term itself pointed up the nature of the controversy. Should federal employment be regarded primarily as a benefit–thus “dipping”–or as a means of hiring the best talent available
Disadvantage for 6,000
At last count, about 6,000 retired regular officers came under some type of dual-compensation restriction. Most were subject to the 1964 offset requirement. About 160 had their pay reduced by the 1978 executive-level pay cap and some 650 were affected by both limitations.
Opposing these limitations were the Air Force Association and other members of The Military Coalition, a group of about 30 military, veteran, and uniformed services organizations. They argued that they not only were unfair to affected retirees but also were bad for the country. AFA said the offset and salary caps discouraged experienced members from bringing their expertise to another sector of government.
The Military Coalition supported repeal, and the services themselves favored it. Because the limitations affected only relatively small numbers, it did not receive as much attention as some of the broader issues such as the military pay raise and retention incentives.
The Pentagon’s interest in the dual-compensation restrictions increased in recent years, however, as active duty strengths dropped and the services searched for ways to meet shortages in critical skills. The Air Force, for example, said it would like to hire more retired rated officers to fill headquarters staff positions that have gone begging because of pilot shortages.
In 1990, Congress did ease the restrictions slightly with the Federal Employees Pay Comparability Act. FEPCA allowed government agencies to waive dual-compensation limitations and hire civilian and military retirees to meet critical personnel shortages. The criteria were stringent, however, and the provisions were applied selectively. Some waivers were permitted in 1998, for example, to bring retirees with selected computer expertise back to work on the government’s Y2K problems.
Congress also has allowed exceptions to the law in a number of specific cases to help government agencies meet physician shortages. In 1984, it allowed the Department of Veterans Affairs to grant dual-compensation waivers to retired military doctors, and in 1986, it gave similar power to the US Soldiers’ and Airmen’s Home and the Uniformed Services University of the Health Sciences.
The Congressionally mandated Commission on Servicemembers and Veterans Transition Assistance concluded in its 1999 final report that retirement pay reduction requirements imposed by the Dual Compensation Act destroyed any incentive for military retirees to go into federal employment and deprived the government of valuable skills. The commission also said that the setup created inequity between regular and reserve retired officers.
The Federal Managers Association, a lobbying organization supporting federal executives, managers, and supervisors, supported total repeal of dual-compensation restrictions as a means of drawing experienced professionals back into federal service.
The Office of Personnel Management has been unenthusiastic about removing the limitations. Historically, the government generally has been wary of hiring military retirees in civilian jobs lest they saturate the high-level positions. From the 1880s until 1964, in fact, no retired regular officer could take a federal civilian job without first obtaining a waiver.
In effect, the dual-compensation law of 1964 opened the door to retirees but exacted a price for taking a federal job.
Even when it did not actually restrict their employment or their income, the government kept a close eye on members who retired and moved into government jobs. In the beginning, only retired officers had to report that they did so. Since 1993, a DoD ethics regulation has required all retirees, officer and enlisted, to report.
Federal civilian employees themselves have been even more outspoken about their opposition to dropping the pay limitations on military retirees. Many civilian workers see the military retirees as a threat to their own advancement. Others resent the fact that double-dippers often can make more than their peers in the same jobs.
To the charge that dual-compensation rules discriminate against the military, civilian workers have countered that they are under even harsher restrictions. A retired civilian employee who returns to government service usually receives his full annuity but finds his civilian salary reduced by the amount of that annuity. It is only fair, some say, that retired service members give up at least some of their retired pay.
With the limitations now repealed, government service doubtless will become more attractive to retiring service members.
Bruce D. Callander, a regular contributor to Air Force Magazine, served tours of active duty during World War II and the Korean War. In 1952, he joined Air Force Times, serving as editor from 1972 to 1986. His most recent story for Air Force Magazine, “Warrior Week,” appeared in the December 1999 issue.