S. 666, A Bill to Provide Special Retirement Benefits for Non-Indian Employees of the Bureau of Indian Affairs and the Indian Health Service

Under S. 666, non-Indian employees of the Bureau of Indian Affairs and the Indian Health Service would be eligible for special retirement benefits if they were not otherwise entitled to full benefits under regular retirement provisions. The special benefits would amount to 50 percent of high 3 years of annual pay after 20 years of service, 60 percent after 25 years, and 70 percent after 30 years, whereas, the regular formula would provide 36.25 percent, 46.25 percent, and 56.25 percent, respectively. The bill is intended to relieve the impact of a 1974 Supreme Court decision which upheld the policy of providing Indian employees of these agencies with employment and promotional preferences. The special retirement provisions would allow non-Indian employees to retire early and thus release higher level positions for qualified Indian applicants. Employees retiring under these provisions would receive higher annuities than those retiring under regular provisions. An examination of a similar special retirement system showed that S. 666 was an expensive method of marginally reducing the age of retirement and that most employees choose not to retire at the earliest time. In order to encourage early retirement, the provisions should be similar to those for air traffic controllers which provide an economic incentive but do not permit greater benefits for longer service.