United States Government Accountability Office Reports Findings For Benefits For Retirement-Age Beneficiaries

In 2010, 31,880—or 10 percent—of all FECA beneficiaries were long-term, full-time beneficiaries and 10,873 of those—or 34 percent—were at full retirement age, as defined under the Social Security Act. Of the $1.9 billion total in cash benefits paid to FECA beneficiaries, over half (58 percent) went to long-term, full-time beneficiaries. Of that half, long-term, full-time beneficiaries at or above full Social Security retirement age received 21 percent. This analysis covered all FECA beneficiaries, including USPS and non-USPS employees.

Compared to their federal CSRS retired counterparts, non-USPS long-term, full-time FECA beneficiaries typically received higher benefits in 2010. The median annual FECA benefit of $35,614 was about 26 percent higher than the median annual annuity received by retirees, which was $28,289, after adjusting for the effects of taxes. The difference between FECA benefits and CSRS annuities is typically larger when the FECA beneficiary was injured after fewer years of service. The differences between annual FECA and Civil Service Retirement System (CSRS) benefits in our comparison are largely explained by the benefit calculation formulas used for each set of benefits. The CSRS formula generally awards a smaller percentage of salary than the FECA formula for most workers, except those with long tenure.

It is important to note that our finding regarding the difference in benefits levels does not allow us to conclude whether such a difference exists for USPS employees or for current or future annuitants under FERS, a population that is increasing given that FERS covers federal employees first hired in 1984 or later. USPS employees were not included in this analysis because USPS could not provide sufficient data to reliably determine its employees' work histories for the years covered by our analysis.

We examined the experiences of four states that limit state workers' compensation benefits based on retirement age: Kentucky, Minnesota, Montana, and Tennessee. State officials and attorneys in those states highlighted several aspects of their experiences with these provisions, including cost savings, legal challenges, and financial hardships for some beneficiaries. For example, a workers' compensation board official from Kentucky stated there has been a decrease in workers' compensation costs since the retirement-age limitation went into effect; however, their office could not attribute the savings to this provision because they lack statistical data since private insurance carriers pay the benefits rather than the state.

Why GAO Did This Report

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