Mandatory Spending

Function 600 - Income Security

Eliminate the Special Retirement Supplement for New Federal Retirees

CBO periodically issues a compendium of policy options (called Options for Reducing the Deficit) covering a broad range of issues, as well as separate reports that include options for changing federal tax and spending policies in particular areas. This option appears in one of those publications. The options are derived from many sources and reflect a range of possibilities. For each option, CBO presents an estimate of its effects on the budget but makes no recommendations. Inclusion or exclusion of any particular option does not imply an endorsement or rejection by CBO.

Part of the Federal Employees Retirement System is the Special Retirement Supplement—income that employees who are eligible to retire before age 62 can receive until they become eligible for Social Security benefits at that age. This option would eliminate the Special Retirement Supplement for federal workers who retired in January 2019 or later. The option would save the federal government $5.3 billion from 2019 through 2028, CBO estimates. Uncertainty about the option's savings stems from CBO's projections of federal workers' salary growth and retirement rates, which are themselves uncertain.