For disabled feds, workers' comp beats retirement

The Federal Employees' Compensation Act of 1916 was never intended to be a retirement plan, but critics say for thousands of government employees, that's just what it's become.

That's because under the federal system, disabled employees unable to return to work get to choose between receiving higher-paying workers' compensation benefits or the lower-paying federal retirement plan.

For most, the choice is clear.

The money is almost always better under the workers' compensation program, which pays up to 75 percent of the employees' salaries tax-free, compared with the 60 percent they would receive under the retirement system.

Across government, more than 7,000 injured employees continue to collect workers' compensation after retirement age, and a few have even gotten payouts lasting decades well into their 90s, government records show.

Dan Adcock, legislative director for the National Active and Retired Federal Employees Association, said the organization opposes such a move. He said forcing employees into retirement represents a broken promise to injured workers, who in deciding to take workers' compensation payments have given up their rights to sue the government over their injuries.

A 2005 audit by the Office of Inspector General for the Veterans Administration found that beneficiaries can remain on workers' compensation rolls until they die.

Citing Labor Department figures, the office estimated annual savings across the government of nearly $500 million by moving workers into a retirement system.

According to the Labor Department, there are roughly 50,000 workers across government on the so called "periodic roll" of federal employees who haven't returned to work and who are receiving ongoing wage-loss payments.

Among those 50,000 recipients, about 7,200 workers who have been judged to have no potential to return to work are over the age of 65, according to the department.