Some Civil Service Retirees Subject to 'Catch 62' Are Not Being Identified

In reviewing the "Catch 62" provision of the civil service retirement system whereby military service performed after 1956 cannot be credited for both civil service and social security retirement benefits, GAO identified some administrative problems which could be readily corrected. Under current law, if a civil service retiree becomes eligible for social security benefits at age 62, the Office of Personnel Management (OPM) is to recompute the civil service annuity and exclude any military service after December 31, 1956, from the annuity computation.

This is not always being done, and the problem may be greatly exacerbated as more individuals with post-1956 military service become eligible for civil service and social security benefits. A spot check of 1979 retiree folders at OPM revealed that records were not being prepared according to OPM claims adjudication procedures which require that OPM ask the Social Security Administration (SSA) if a retiree is eligible for social security benefits. Thus, OPM could not follow up on retirees' social security eligibility. Uncorrected, this problem could result in substantial overpayments. OPM procedures do not identify retirees who become eligible for social security after age 62. Without followup procedures for those who become eligible for social security after age 62, civil service annuities will not be properly reduced. Additional problems could develop because the transactions between OPM and SSA are handled manually. Both agencies need to establish an automated system to identify retirees eligible for social security at age 62 and those who become eligible after age 62. The OPM quality assurance staff recommended that the annuitant's master record file on the existing automated data processing system be revised to include the years of post-1956 military service.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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