Retirement Legislation Seeks to Provide Law Enforcement “Full Compensation” Despite Pay Caps

Bipartisan legislation introduced this week would allow the Office of Personnel Management (OPM) to consider the full value of overtime compensation accrued when calculating Civil Service Retirement System (CSRS) / Federal Employees Retirement System (FERS) retirement annuity for federal police and first responders. Currently, bi-weekly and annual pay caps prevent law enforcement from being fully compensated for overtime work if the overtime would push compensation over a certain amount. The Law Enforcement Officer Fair Retirement Act (H.R.8087) would not lift the pay cap, but rather, allow OPM to count overtime hours toward retirement benefits.

The Federal Law Enforcement Officers Association (FLEOA) explained in an August 2021 letter, “With the exception of employees in Senior Executive Service (SES) positions, the rest of federal law enforcement employees' pay is tied to a law passed by Congress that does not allow the combination of base salary, overtime, and premium pay to exceed the level of an employee serving in a position classified as a GS-15, Step 10 or an SES Level IV.”

For 2022, GS-15, Step 10 base pay is $146,757. SES Level IV base pay is currently $176,300.

On each pay stub, law enforcement officers see the amount of “over-earned” pay which reflects the amount of compensation they would have earned but for the pay cap. FLEOA expressed concern that, in the immediate term, this negatively impacts pay, officer morale, recruitment, and retention. In the long term, most law enforcement pensions are based on an average of the officer’s highest three years of pay. Since pension calculations are only based on the compensation the officer actually received, retirement benefits are implicitly limited by the pay cap.

Rep. Bill Pascrell (D-NJ), lead sponsor of the Law Enforcement Officer Fair Retirement Act and co-Chair of the Law Enforcement Caucus, explained in a release, “It is unconscionable that an officer serving overtime does not get full retirement compensation. Our bill will finally fix this technicality so that a federal officer receives every cent they’ve earned.”

Under the bill, officer may elect to have OPM consider their “over-earned” pay when calculating retirement benefits.

Rep. Don Bacon (R-NE), a co-sponsor of the legislation, added in the joint release with Rep. Pascrell, “Our federal law officers answer the call any time of the day, or night, to protect Americans and acquire justice. Unfortunately, they are not recognized for the countless number of overtime hours they serve, and this bill will correct that. I’m pleased to join this bipartisan legislation to make sure our federal LEOs get these hours counted as part of their retirement calculations.”

The bill was also co-sponsored by Reps. Val Demings (D-FL) and Brian Fitzpatrick (R-PA). In the joint release, Rep. Demings called the legislation a matter of “simple fairness.” Rep. Fitzpatrick noted he was proud to work on bipartisan legislation to support law enforcement.

Finally, FLEOA President Cosme was quoted in the release noting his organization will continue to work to lift the pay cap entirely, but “making an officer’s full salary fully creditable for retirement purposes is a step toward addressing a legacy of disparate treatment for federal law enforcement professionals.”