oversight

Capitol Police: Retirement Benefits, Pay, Duties, and Attrition Compared to Other Federal Police Forces

Published by the Government Accountability Office on 2012-01-24.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

               United States Government Accountability Office

GAO            Report to Congressional Requesters




January 2012
               CAPITOL POLICE

               Retirement Benefits,
               Pay, Duties, and
               Attrition Compared to
               Other Federal Police
               Forces




GAO-12-58
                                               January 2012

                                               CAPITOL POLICE
                                               Retirement Benefits, Pay, Duties, and Attrition
                                               Compared to Other Federal Police Forces
Highlights of GAO-12-58, a report to
congressional requesters




Why GAO Did This Study                         What GAO Found
The Washington, D.C. metropolitan              USCP generally has enhanced retirement benefits, a higher minimum starting
(DC metro) area is home to many                salary, and a wider variety of protective duties than other federal police forces in
federal police forces, including the           the DC metro area that GAO reviewed, but has similar employment
United States Capitol Police (USCP),           requirements. Even though USCP, Park Police, Supreme Court Police, and
which maintain the safety of federal           Secret Service Uniformed Division are federal police forces, they provide
property, employees, and the public.           enhanced retirement benefits similar to those offered by federal law enforcement
Officials are concerned that disparities       agencies that have additional investigative duties. These enhanced benefits
in pay and retirement benefits have            allow their officers to retire early and accrue retirement pensions faster than other
caused federal police forces to
                                               federal police forces. USCP and these three forces also offered among the
experience difficulties in recruiting and
                                               highest minimum entry-level salaries—ranging from $52,020 to $55,653—than
retaining officers. In 2010, the USCP
Labor Committee proposed six
                                               the other six forces GAO reviewed, which had minimum entry-level salaries
changes to enhance the USCP benefit            ranging from $38,609 to $52,018. USCP reported routinely having a wider variety
structure. GAO was asked to review             of duties than most other forces. These duties ranged from routinely protecting
USCP’s pay and retirement benefits             members of Congress to protecting buildings. USCP and most of the forces
and compare them to other federal              generally have similar employment requirements, such as being in good physical
police forces in the DC metro area.            condition.
GAO (1) compared USCP to other
forces with respect to retirement              USCP’s attrition rate is generally lower than the majority of the federal police
benefits, minimum entry-level salary,          forces in our review; and USCP and seven of the other nine police forces
duties, and employment requirements;           considered human capital flexibilities to be at least of some importance to
(2) compared attrition at USCP to other        recruiting and retaining qualified officers, but use of these flexibilities generally
forces, and determined how, if at all,         depends on recruiting needs, among other factors. From fiscal years 2005
USCP and other forces used human               through 2010, USCP had the fourth lowest attrition rate (6.5 percent) among the
capital flexibilities (e.g., retention         10 police forces GAO reviewed; the attrition rates for the nine other forces
bonus); and (3) determined what level          ranged from 3.5 percent to just under 14 percent. Officials from USCP and four
of retirement income USCP benefits             other forces GAO reviewed stated that, currently, attrition is not a problem
provide and the costs associated with          because of the challenging economy. For example, officials from USCP and
the proposed benefit enhancements.
                                               Bureau of Engraving and Printing Police stated that their officers want to retain
GAO chose nine other federal police
                                               their jobs in the challenging economy. In addition, USCP and other forces said
forces to review based on prior work,
inclusion in the Office of Personnel           that when their officers do leave the force, they generally do so either because of
Management (OPM) police                        personal reasons or for better career advancement opportunities, and officers
occupational series, and officer               generally stay for reasons such as good working environment or appreciation for
presence in the DC metro area. GAO             the agency’s mission. The extent to which retirement benefits, pay, and use of
analyzed laws, regulations, OPM data           human capital flexibilities affect attrition can vary among forces given other
from fiscal years 2005 through 2010,           factors—such as family issues—that could influence an employee’s decision to
and human capital data from the 10             leave or remain with his or her employer.
police forces. GAO also surveyed the
10 forces.                                     If fully utilized, benefits for USCP officers who retire at the age of 57 under
                                               existing provisions generally would be within the range of retirement income
USCP and the Office of Personnel
                                               targets suggested by some retirement experts. However, the level of benefits
Management generally agreed with our           depends significantly on the level of employee retirement contributions. In 2010,
findings and provided technical                the USCP Labor Committee presented six proposals that would enhance the
comments, which GAO incorporated as            current USCP benefit structure. GAO’s analysis shows that five of the six would
appropriate.                                   increase existing costs, GAO’s review found the other proposal, which urges the
                                               USCP Board to exercise its current authority to allow officers to voluntarily
View GAO-12-58. For more information,
contact Eileen R. Larence at (202) 512-8777
                                               remain employed until age 60 rather than retire at age 57, as mandated, would
or larencee@gao.gov or Charles A. Jeszeck at   have only a minimal impact on USCP costs and could increase officers’
202-512-7215 or jeszeckc@gao.gov.              retirement income.
                                                                                        United States Government Accountability Office
Contents


Letter                                                                                     1
               Background                                                                  6
               USCP Has Enhanced Retirement Benefits, a Higher Minimum
                 Starting Salary, and a Wider Variety of Duties Compared to Most
                 Federal Police Forces                                                   10
               USCP Has Relatively Low Attrition and Reported No Difficulty with
                 Recruiting                                                              23
               Benefits under Existing FERS Provisions Generally Meet
                 Recommended Targets, if Fully Utilized, with TSP Balances
                 Being a Significant Factor                                              34
               Agency Comments and Our Evaluation                                        44

Appendix I     Objectives, Scope and Methodology                                         47



Appendix II    Comments from the Department of Homeland Security                         57



Appendix III   Comments from the Office of Personnel Management                          58



Appendix IV    Comments from the United States Capitol Police Labor Committee            61



Appendix V     GAO Contact and Acknowledgments                                           64



Tables
               Table 1: Defined Benefit Calculations for Federal Employees (LEO
                        and non-LEO Employees)                                             8
               Table 2: Federal Police Force Retirement Benefits, Pay Plans, and
                        Minimum Entry-Level Salaries, Fiscal Year 2010                   13
               Table 3: Attrition, Retirement Benefits, and Pay at Federal Police
                        Forces                                                           30
               Table 4: Five Proposals Would Increase Costs to the Federal
                        Government                                                       39




               Page i                                                GAO-12-58 Capitol Police
          Table 5: USCP and Comparable Federal Police Forces and Police
                   Officers Located in the Washington, D.C. Metropolitan
                   Area or Who Received Washington, D.C., Locality Pay in
                   Fiscal Year 2010                                                 48


Figures
          Figure 1: Routine Protective Duties of Federal Police Forces              14
          Figure 2: USCP Primary and Shared Jurisdiction with MPD                   16
          Figure 3: Methods Used Routinely by Federal Police Forces to
                   Protect People and Property                                      17
          Figure 4: Activities Routinely Conducted by Federal Police Officers       19
          Figure 5: Eligibility Requirements for Entry-Level Federal Police
                   Officers                                                         20
          Figure 6: Requirements for the Hiring Process for Federal Police
                   Officers                                                         22
          Figure 7: Attrition at Federal Police Forces from Fiscal Years 2005
                   through 2010                                                     24
          Figure 8: Extent to which Federal Police Forces View Attrition as a
                   Problem                                                          25
          Figure 9: Federal Police Force Officials’ Perspectives on Primary
                   Reasons Why Officers Left or Stayed with the force since
                   2010                                                             27
          Figure 10: Attrition by Years of Service at Federal Police Forces,
                   Fiscal Years 2005 through 2010                                   29
          Figure 11: Federal Police Forces’ Views on the Importance of
                   Human Capital Flexibilities                                      31
          Figure 12: Human Capital Flexibilities Available to and Offered by
                   Federal Police Forces                                            32
          Figure 13: Replacement Rates Under Existing FERS Provisions for
                   Three Levels of TSP Contributions for Officers Retiring at
                   Age 57                                                           36
          Figure 14: Percentage of Officers Making Employee Contributions
                   to TSP at Different Levels (2010)                                37
          Figure 15: Effect on Replacement Rates of Retiring at Age 60
                   Instead of Age 57                                                43

          Abbreviations

          BEP Police                           Bureau of Engraving and Printing
                                               Police
          CBO                                  Congressional Budget Office


          Page ii                                               GAO-12-58 Capitol Police
CBRN                                         Chemical, Biological, Radiological,
                                             and Nuclear
CERT                                         Containment and Emergency
                                             Response Team
CPDF                                         Central Personnel Data File
CSRS                                         Civil Service Retirement System
FBI Police                                   Federal Bureau of Investigation
                                             Police
FERS                                         Federal Employees Retirement
                                             System
FLETC                                        Federal Law Enforcement Training
                                             Center
FTE                                          Full Time Equivalents
GED                                          General Equivalency Diploma
GS                                           General Schedule
HAZMAT                                       Hazardous Material
IRC                                          Internal Revenue Code
KSA                                          Knowledge, Skill, and Ability
LEO                                          Law Enforcement Officer
MOU                                          Memorandum of Understanding
MPD                                          Metropolitan Police Department of
                                             the District of Columbia
NIH Police                                   National Institutes of Health Police
Park Police                                  United States Park Police
Pentagon Police                              Pentagon Force Protection Agency
                                             Police
Postal Security Force                        U.S. Postal Service Security Force
OMB                                          Office of Management and Budget
OPM                                          Office of Personnel Management
Secret Service Uniformed Division            U.S. Secret Service Uniformed
                                             Division
SWAT                                         Special Weapons and Tactics
TSP                                          Thrift Savings Plan
USCP                                         United States Capitol Police
VA                                           Veteran’s Health Administration


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Page iii                                                          GAO-12-58 Capitol Police
United States Government Accountability Office
Washington, DC 20548




                                   January 24, 2012

                                   The Honorable Robert A. Brady
                                   Ranking Member
                                   Committee on House Administration
                                   House of Representatives

                                   The Honorable Michael E. Capuano
                                   House of Representatives

                                   As the epicenter for federal government operations, the Washington D.C.,
                                   metropolitan area is home to many federal police forces—including the
                                   United States Capitol Police (USCP)—which play a key role in
                                   maintaining the safety and security of federal property, employees, and
                                   the general public. Since 2003, officials at some of these police forces
                                   have raised concerns that disparities in pay and retirement benefits have
                                   caused their police forces to experience difficulties in recruiting and
                                   retaining officers. For example, after the expansion of the Federal Air
                                   Marshal Program in 2003, concerns about disparities in pay and
                                   retirement benefits increased as the expansion created relatively high-
                                   paying job opportunities for existing federal police officers and reportedly
                                   lured many experienced officers from their police forces. In 2010, the
                                   USCP Labor Committee—the bargaining unit for USCP officers—raised
                                   concerns about whether retirement benefits offered by the USCP are
                                   adequate to attract and retain enough qualified officers, and it proposed
                                   six changes related to the USCP retirement benefit structure intended to
                                   improve retention. The USCP Labor Committee stated that a major factor
                                   in officers’ decisions to leave the agency is insufficient retirement
                                   benefits. We reported in July 2009 on the importance of considering a
                                   variety of organizational, personal, and economic factors, as well as
                                   compensation and human capital flexibilities, when assessing the need to
                                   increase retirement benefits. 1 We further reported that the presence or




                                   1
                                    GAO, Federal Law Enforcement Retirement: Information on Enhanced Retirement
                                   Benefits for Law Enforcement Personnel. GAO-09-727 (Washington, D.C.: July 20, 2009).
                                   Human capital flexibilities represent the policies and procedures that an agency has the
                                   authority to implement in managing its workforce to achieve its goals. These flexibilities
                                   can include retention allowances, recruitment bonuses, tuition reimbursement, incentive
                                   awards, recognition, training and development, and work-life policies, among others.




                                   Page 1                                                           GAO-12-58 Capitol Police
absence of better retirement benefits may not fully indicate why personnel
leave a particular agency.

You requested that we review compensation and retirement benefits of
the USCP and compare them to those of other federal police forces in the
Washington, D.C. metropolitan area. Specifically, this report addresses
the following questions:

(1) How does the USCP compare to other federal police forces in the
Washington, D.C. metropolitan area with respect to retirement benefits,
minimum entry-level salary, duties, and employment requirements? 2

(2) How does attrition at USCP compare to other federal police forces,
and how if at all, have USCP and other federal police forces used human
capital tools to recruit and retain qualified officers?

(3) What level of retirement income do current USCP benefits provide and
what costs are associated with the proposed benefit enhancements?

In addition to USCP, we selected nine other federal police forces to
include in our review, based on (1) prior work on federal police forces, (2)
inclusion in the Office of Personnel Management’s (OPM) occupational
series for police officers (0083), and (3) the number of officers located in
the Washington, D.C. metropolitan area or who receive Washington, D.C.
locality pay. 3 According to USCP officials, USCP police officers are
functionally equivalent to police officers designated under OPM’s 0083




2
  We determined how USCP compares to other federal police forces with respect to
minimum entry-level salary. However, for our review, we did not determine how the police
forces compared with respect to other aspects of compensation, such as maximum salary.
3
  GAO, Federal Uniformed Police: Selected Data on Pay, Recruitment, and Retention at
13 Police Forces in the Washington, D.C. Metropolitan Area. GAO-03-658 (Washington,
D.C.: June 13, 2003). For the purpose of this report, we also used OPM’s Central
Personnel Data File—a database that contains personnel information primarily on
executive branch agencies—to determine which officers in the selected federal police
forces received Washington, D.C. locality pay. These officers’ duty stations could be
located in Washington, D.C., as well as Northern Virginia and parts of Maryland, West
Virginia, and Pennsylvania.




Page 2                                                          GAO-12-58 Capitol Police
police series. 4 Further, USCP has approximately 1,800 police officers
located in the Washington, D.C. metropolitan area. We selected nine
federal police forces that have officers who are part of, or functionally
equivalent to, OPM’s 0083 police series and who have at least 50 officers
who are located in the Washington, D.C. metropolitan area or receive
Washington, D.C. locality pay. The nine federal police forces are:

•   Bureau of Engraving and Printing Police (BEP Police),
•   Federal Bureau of Investigation Police (FBI Police),
•   Federal Emergency Management Agency Police (FEMA Police),
•   National Institutes of Health Police (NIH Police),
•   Pentagon Force Protection Agency Police (Pentagon Police),
•   Supreme Court Police,
•   United States Park Police (Park Police),
•   U.S. Postal Service Security Force (Postal Security Force) 5 , and
•   U.S. Secret Service Uniformed Division (Secret Service Uniformed
    Division). 6
To address our first two objectives, we reviewed relevant federal statutes,
regulations, OPM reports and data, and our prior reports on human
capital management to identify relevant issues pertaining to federal police



4
 OPM defines the 0083 police series as positions in which the primary duties are the
performance or supervision of law enforcement work in the preservation of the peace; the
prevention, detection, and investigation of crimes; the arrest or apprehension of violators;
and the provision of assistance to citizens in emergency situations, including the
protection of civil rights.
5
   Postal Security Force officials stated that even though their officers have not been
subject to OPM classification, they do not believe that their officers are equivalent to 0083
police officer but, instead, they believe their officers are equivalent to 0085 federal security
guards. However, we believe that Postal Security Force is comparable to USCP for the
purpose of our review and should be considered because (1) it reported having the same
primary types of statutory law enforcement authorities as those reported by USCP, such
as conducting criminal investigations, executing search warrants, making arrests, carrying
firearms, and protecting people and property; (2) it was included in our prior work on
federal uniformed police forces; and (3) it has more than 50 police officers located in the
Washington, D.C. metropolitan area.
6
  Sixteen federal police forces had 0083 police officers. Nine of these forces had 50 or
more police officers located in the Washington, D.C. metropolitan area or who received
Washington, D.C. locality pay. The remaining seven federal police forces with 0083
officers that did not meet these criteria, and therefore, were not included in our review are
forces with the Federal Protective Service, National Institutes of Science and Technology,
Smithsonian Institute, U.S. Mint, Government Printing Office, Veterans Health
Administration, and the Internal Revenue Service.




Page 3                                                               GAO-12-58 Capitol Police
officers’ retirement benefits, salaries, duties, employment requirements,
and the police forces’ use of human capital flexibilities. We used fiscal
year 2005 through 2010 separation data from OPM’s Central Personnel
Data File (CPDF) to determine the level of attrition among officers at
police forces that report to CPDF; and for forces that do not report to
CPDF—USCP, Supreme Court Police, and Postal Security Force—we
used fiscal year 2005 through 2010 separation data obtained directly from
them. 7 We chose this time frame in order to obtain the most recent data
available for a full fiscal year. We also analyzed documentation and
interviewed human resources officials, senior police officers, and
executive officials from the police forces in our review regarding human
capital issues. Based on this information, we surveyed and received
responses from each of these police forces regarding issues such as
duties, retention, and human capital flexibilities. We analyzed the survey
results and followed up with these officials when information was
incomplete or inconsistent. We also interviewed human resources officials
at OPM to obtain information on retirement benefits and pay. We
assessed the reliability of the data the police forces provided in the survey
by reviewing agency responses to questions regarding the integrity of the
data sources. We determined that the data were sufficiently reliable for
our purposes.

To address our third objective, we examined the prospects for retirement
income under current provisions. Based on retirement, work history, and
demographic data we obtained from USCP, we developed illustrative
examples of workers hired at three different ages who progressed along a
standard career path. 8 Using a variety of assumptions, we calculated
amounts for the three parts of USCP’s current retirement system—the
Federal Employees Retirement System (FERS): the FERS defined
benefit, Social Security benefit, and expected retirement income from the


7
  For this report, we calculated attrition by dividing the number of officers who separated
from the police force during a particular fiscal year by the number of officers onboard at
the end of that fiscal year. We considered calculating attrition by dividing the number of
officers who separated by the average number of officers onboard at the beginning and
end of the fiscal year. However, since the differences in the results of the two calculation
methods were minimal, we decided to use end of fiscal year onboard numbers for
computational simplicity.
8
 These examples show officers hired as trainees who progress through the grades and
steps of the pay scale based on time in grade. We focused on grade 3 officers because in
2010, over 80 percent of all officers were grade 3 or on their way to grade 3. Grade 3
officers have the title of Private First Class.




Page 4                                                              GAO-12-58 Capitol Police
federal Thrift Savings Plan annuity (TSP). We examined outcomes for
three different TSP contribution levels as well as for retirement both at
ages 57 and 60. In addition, we analyzed the benefit changes proposed
by the USCP Labor Committee to identify which, if any, of the proposals
aligned with current trends in retirement benefits. To do this, we
discussed the proposals with officials from the USCP Labor Committee
and OPM, and reviewed relevant laws, regulations, and literature. To
examine the costs of these proposals, we reviewed the Congressional
Budget Office’s (CBO) cost estimates for comparable benefit provisions to
federal police forces, and interviewed OPM officials. We limited our
analysis to federal police forces and did not examine the benefit
structures of state or municipal police forces. To determine the costs to
the federal government and officers of proposed changes to the USCP
benefit structure, we obtained information from the USCP regarding
officers’ retirement trends and demographic data. We conferred with
OPM’s actuarial staff regarding information and data related to the entire
law enforcement officer (LEO) population. We conferred with OPM’s
actuarial staff regarding similar information and data related to the entire
LEO population. OPM calculated the cost impact of allowing later USCP
retirement using the aggregate entry age normal method. 9 Appendix I
provides additional detail on our objectives, scope, and methodology.

We conducted this performance audit from January 2011 through January
2012 in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit to
obtain sufficient, appropriate evidence to provide a reasonable basis for
our analysis based on our audit objectives. We believe that the evidence
obtained provides a reasonable basis for our analysis based on our audit
objectives.




9
 Pension benefits are paid after retirement, but costs are accrued and should be funded in
advance of retirement (during the working years). However, because there is no single
way to assign post-retirement costs to particular years of pre-retirement service, an
actuarial cost method is used that aggregates the costs for all individuals in the population
being analyzed. For individuals in FERS, the method used to assign post-retirement costs
to pre-retirement service is known as the aggregate age entry normal method.




Page 5                                                             GAO-12-58 Capitol Police
Background
Federal Retirement Benefit   As federal employees, USCP and other federal police officers are eligible
Systems                      to participate in one of the two federal retirement plans—the Civil Service
                             Retirement System (CSRS) or the Federal Employees Retirement
                             System (FERS). CSRS is available to employees entering federal service
                             before 1984, while FERS is available to employees entering federal
                             service on and after January 1, 1984. CSRS is a defined benefit plan—
                             meaning that the employer promises a specified monthly benefit during
                             retirement that is predetermined by a formula; in the case of CSRS, the
                             benefit amount and eligibility depend on the employee’s earnings history,
                             tenure of service, and age. The defined benefit plan is funded by both
                             employee and agency contributions as well as additional contributions
                             from the U.S. Treasury. CSRS covered employment is generally not
                             considered covered employment for the purposes of Social Security;
                             hence, CSRS covered employees do not also receive Social Security
                             benefits. 10 FERS is a retirement plan that provides benefits from three
                             different sources: a defined benefit plan, Social Security, and TSP. As
                             with CSRS, the defined benefit portion of FERS is funded by both
                             employee and agency contributions, as well as additional contributions
                             from the U.S. Treasury. 11


Federal Law Enforcement      Both federal retirement systems provide different levels of benefits
Retirement Benefits          depending on certain characteristics of covered employees. For example,
                             under statutory and regulatory retirement provisions, federal employees
                             who meet the retirement-related definitions of an LEO receive more
                             generous retirement benefits under CSRS and FERS than non-LEO


                             10
                               CSRS covered employees may, through prior or subsequent private employment or as a
                             survivor, obtain Social Security coverage.
                             11
                                For employees covered by the FERS retirement plan, the employee contributions for
                             the defined benefit plan and the Social Security contributions are paid each pay period in
                             the form of payroll deductions. Agencies also set up a TSP account for each employee
                             and deposit the equivalent of 1 percent of the basic pay earned each pay period. An
                             employee may choose to make additional TSP contributions up to the Internal Revenue
                             Service’s elective deferral limit ($17,000 in 2012) to take advantage of any agency
                             matching contributions (on the first 5 percent of basic pay contributed by the employee) or
                             to contribute further beyond the matching limit. All contributions and earnings are tax-
                             deferred. CSRS participants may also contribute to the TSP, but without an employer
                             match for the employee contributions.




                             Page 6                                                            GAO-12-58 Capitol Police
employees. Coverage under CSRS and FERS LEO definitional criteria
generally include those personnel whose duties have been determined by
the employing agency through an administrative process to be primarily
the investigation, apprehension, or detention of individuals suspected or
convicted of offenses against the criminal laws of the United States. 12 The
FERS definition of a LEO is more restrictive than the CSRS LEO
definition in that it expressly includes a rigorous duty standard, which
provides that LEO positions must be sufficiently rigorous such that
“employment opportunities should be limited to young and physically
vigorous individuals.” In general, neither LEO definitions under CSRS or
FERS have been interpreted by OPM to cover federal police officers.
Implementing OPM regulations for CSRS and FERS provide that the
respective LEO regulatory definitions, in general, do not include an
employee whose primary duties involve maintaining order, protecting life
and property, guarding against or inspecting for violations of law, or
investigating persons other than those who are suspected or convicted of
offenses against the criminal laws of the United States, which are akin to
the responsibilities of federal police officers. Federal police officers might
also be treated, for retirement purposes, as “law enforcement officers”
(that is, granted LEO-like status) under two additional scenarios. First,
over the years, certain other federal police forces whose duties have not
been determined by their employing agency to meet the LEO definitional
criteria under the administrative process have been explicitly added to the
CSRS or FERS statutory definitions so that they are considered LEOs for
retirement purposes. Second, certain other federal police forces whose
duties have not been determined by their employing agency to be within
the scope of the definitional criteria of a LEO or explicitly added by
amending statutory LEO definitions, have been provided retirement
benefits similar to that of LEOs directly through legislation.

Generally, federal LEOs (and officers with LEO-like status) have a higher
benefit accrual rate than most other federal employees, albeit over a
shorter period of time due to the mandatory retirement age for LEOs.
Officers in these categories also contribute 0.5 percent more for these
benefits than most other federal employees contribute—7.5 percent of
pay for CSRS and 1.3 percent of pay for FERS. As shown in table 1,
under both CSRS and FERS, statutory provisions provide for a faster


12
  OPM notes that it has delegated CSRS and FERS LEO decision making authority to
agency heads and that while OPM retains oversight authority, it does not participate in the
decision making process at the agency level.




Page 7                                                            GAO-12-58 Capitol Police
accruing defined benefit pension for LEO and LEO-like personnel than
that provided for most other federal employees.

Table 1: Defined Benefit Calculations for Federal Employees (LEO and non-LEO
Employees)

Type of Retirement Benefit                Defined Benefit Formula
Enhanced Federal Retirement               CSRS
Benefits Available to LEOs                •  Defined Benefit = [(2.5%) x (high 3 average basic
and LEO-likes                                pay) x (number of years of service ≤ 20)]
                                             +[(2.0%) x (high 3 average basic pay) x (number
                                             of years of service > 20)]a
                                          FERS
                                          •  Defined Benefit = [(1.7%) x (high 3 average basic
                                             pay) x (number of years of service ≤ 20)] +
                                             [(1.0%) x (high 3 average basic pay) x (number
                                             of years of service > 20)]
Standard Federal Retirement               CSRS
Benefits                                  •  Defined Benefit = [(1.5%) x (high 3 average basic
                                             pay) x (number of years of service < 5)] +
                                             [(1.75%) x (high 3 average basic pay) x (number
                                             of years of service >5 and ≤10 years)] + [(2.0%)
                                             x (high 3 average basic pay) x (number of years
                                             of service > 10)]
                                          FERS
                                          •  Defined Benefit = [(1.0% or 1.1%) x (high 3
                                             average basic pay) x (number of creditable years
                                             of FERS service)]b
Source: GAO analysis based on OPM data.
a
 The “high-3 average pay” is the largest annual rate resulting from averaging an employee’s rates of
basic pay in effect over any period of 3 consecutive years of creditable civilian service, with each rate
weighted by the length of time it was in effect.
b
 Creditable years of FERS service refer to the length of an employee’s federal service eligible for
FERS retirement. The 1.1 percent accrual rate applies only to a regular employee who retires under
the immediate retirement provisions and who is at least 62 years old and has at least 20 years of
service at retirement. It does not apply in the case of a congressional employee, military technician
(dual status), law enforcement officer, member of the Supreme Court Police, customs and border
protection officer, firefighter, nuclear materials courier, or air traffic controller.


Also under FERS, federal police officers receiving LEO-like defined
benefits are typically eligible for the same early and enhanced pension
benefits as LEOs. For example, LEOs receive FERS cost-of-living
adjustments beginning at retirement, even if retirement is earlier than age
62, instead of at age 62 when most other FERS retirees become eligible
for these adjustments. Under FERS, LEOs also qualify for an unreduced
early retirement benefit and may retire at age 50 with a minimum of 20
years of qualifying service, or at any age with at least 25 years of



Page 8                                                                      GAO-12-58 Capitol Police
                        qualifying service, which are also more generous than the corresponding
                        provisions for most other FERS participants. 13 LEOs are also subject to
                        mandatory retirement at age 57 with 20 years of service. They are also
                        eligible to receive the special FERS supplement upon retirement that
                        mimics the Social Security retirement benefits earned during federal
                        government service. 14 FERS retirees continue to receive the supplement
                        until they reach age 62 and become eligible to collect Social Security.
                        Police forces statutorily granted LEO-like status also typically receive
                        these same benefits. The standard Social Security benefits apply to all
                        federal LEOs.


Pay Plans for Federal   In addition to varying retirement benefits, federal police forces may also
Police Forces           operate under different compensation systems. Some federal police
                        forces are covered by OPM’s General Schedule (GS) basic pay plan (i.e.,
                        standard basic pay plan). According to OPM, standard governmentwide
                        basic pay systems, including the GS system, are established under title 5
                        of the United States Code and most LEOs and other employees with
                        arrest authority are covered by standard basic pay systems. Under a
                        standard basic pay plan, OPM generally sets the basic pay ranges
                        (grades) and pay increases (steps) within each grade for the positions,
                        and federal police forces use these grades and steps to compensate their
                        employees. 15 On the other hand, some federal police forces are covered
                        under non-standard basic pay plans authorized under separate
                        legislation. Generally, under non-standard basic pay plans, federal police
                        forces are authorized to, among other things, provide basic pay rates
                        different from those specified in a standard basic pay plan and thus have




                        13
                          Under FERS, for example, such qualifying service under 5 U.S.C. § 8412 refers to
                        service as a law enforcement officer, member of the Capitol Police or Supreme Court
                        Police, firefighter, nuclear materials courier, or customs and border protection officer, or
                        any combination of such service.
                        14
                          According to OPM, agencies typically establish the maximum entry age for LEOs based
                        on the age and service requirements for LEO mandatory retirement, which is generally
                        age 57 with at least 20 years of LEO service. The maximum entry age is typically age 37
                        because it allows an employee to achieve 20 years of LEO service when they reach the
                        mandatory retirement age of 57.
                        15
                          Under the standard pay plan, the grade scale for the 0083 police series ranges from GS
                        03 to GS 10 and within each grade, the steps range from Step 1 to Step 10. According to
                        OPM, CPDF also identifies federal police officers at grades higher than GS-10.




                        Page 9                                                               GAO-12-58 Capitol Police
                          the ability to offer higher minimum entry-level salaries than those provided
                          to police officers under a standard pay system.

                          USCP has enhanced retirement benefits and a higher minimum entry-
USCP Has Enhanced         level salary than most other federal police forces GAO reviewed. Also, it
Retirement Benefits, a    reported having a wider variety of protective duties such as routinely
                          protecting members of Congress and buildings, and routinely using a
Higher Minimum            variety of methods to carry out these duties, such as conducting entrance
Starting Salary, and a    and exit screening and patrolling in vehicles, than most other police
Wider Variety of          forces. However, USCP reported that its officers routinely engage in
                          similar activities, such as intelligence operations, and have similar
Duties Compared to        employment requirements for entry-level officers, such as being in good
Most Federal Police       physical condition, as most other federal police forces.

Forces

Retirement Benefits and   USCP and three other police forces—Park Police, Secret Service
Salary                    Uniformed Division, and Supreme Court Police—have enhanced
                          retirement benefits, similar to those received by federal LEOs, where
                          officers can retire after fewer years of service and their retirement
                          annuities accrue faster than the other six federal police forces GAO
                          reviewed. Specifically, police officers within these four police forces are
                          authorized under CSRS and FERS to retire at age 50 with a minimum of
                          20 years of qualifying service and are subject to a mandatory retirement
                          age of 57, with some exceptions. 16

                          In 1988, the Park Police and the Secret Service Uniformed Division, both
                          of which had not been determined by OPM and their employing agencies
                          to be covered by the LEO definition, were explicitly added by statute to
                          the FERS definition of a LEO so that they are considered LEOs for
                          retirement purposes. 17 Committee report language accompanying the


                          16
                             Both CSRS and FERS personnel receiving LEO benefits may be retained for a short
                          time beyond the mandatory retirement age under certain circumstances. First, if an
                          agency head judges that the public interest so requires, that agency head may exempt
                          such an employee from mandatory separation until that employee becomes 60 years of
                          age. In addition, the President, by executive order, may exempt an employee (other than a
                          member of the Capitol Police or Supreme Court Police, which are part of the legislative
                          and judicial branches, respectively) from mandatory separation if the President determines
                          the public interest so requires. 5 U.S.C. § 8335; 5 U.S.C. § 8425.
                          17
                               Pub. L. No. 100-238, 101 Stat. 1744 (1988).




                          Page 10                                                          GAO-12-58 Capitol Police
1988 legislation noted that “although these individuals are commonly
thought to be law enforcement officers, OPM says they do not meet the
FERS definition of ‘law enforcement officer’ under section 8401(17) and
thus do not qualify for FERS law enforcement officer benefits.” 18 The
Committee report then provided that the 1988 legislation would ensure
that these individuals will receive FERS law enforcement officer benefits.

In comparison, rather than amending the statutory LEO definition,
separate legislation in 1990 and 2000 provided the USCP and the
Supreme Court Police, respectively, with enhanced retirement benefits
similar to those received by LEOs. 19 Conference committee report
language accompanying the 2000 Supreme Court legislation, for
example, explained that the new provision served to “bring the Supreme
Court Police into parity with the retirement benefits provided to the United
States Capitol Police and other federal law enforcement agencies.” 20
Federal police officers at the remaining six police forces in our review
receive standard federal employee retirement benefits. 21

USCP and the three police forces with enhanced retirement benefits also
operate under statutorily-provided, non-standard basic pay plans and
reported offering among the highest entry-level salaries compared to




18
     H. R. Rep. No. 100-374, at 21 (1987).
19
     Pub. L. No. 101-428, 104 Stat. 928 (1990); Pub. L. No. 106-553, 114 Stat. 2762 (2000).
20
     H. R. Conf. Rep. No. 106-1005, at 290 (2000).
21
   As of October 2011, officials from four of the six remaining police forces stated that their
police forces had not requested enhanced retirement benefits. According to NIH Police
officials, NIH requested enhanced retirement benefits in 1996 and again in fiscal year
2005; however, neither instance resulted in the NIH Police receiving the requested
enhanced LEO retirement coverage. As to the Pentagon Police, in September 2011, a bill
                                      th
(S. 1543) was introduced in the 112 Session of Congress to, in general, provide
enhanced retirement benefits to the Pentagon Force Protection Agency officers whose
permanent duty station is the Pentagon Reservation and who occupy a position in job
series 0083. According to Pentagon Police officials, since fiscal year 2008, the Pentagon
Police initiated legislative proposals to the Office of Management and Budget (OMB) to
amend sections 8401(17) and 8331(20) of Title 5, United States Code, to grant all
Pentagon Police officers law enforcement retirement benefits. According to Pentagon
Police officials, OMB released the fiscal year 2011 proposed legislation to Congress in
2010, but it was not acted upon. Furthermore, Pentagon Police officials stated that the
former Secretary of Defense sent an official letter to OPM indicating the criticality of
offering enhanced retirement benefits to its officers.




Page 11                                                              GAO-12-58 Capitol Police
those reported by the other federal police forces. 22 With respect to USCP,
for example, under its non-standard basic pay authority, the Capitol
Police Board and the Chief of the Capitol Police set basic pay rates (both
grades and steps) for USCP officers. Three other police forces (BEP
Police, Pentagon Police, and Postal Security Force) with standard federal
employee retirement benefits also operate non-standard basic pay plans,
by statute, while the remaining three police forces—FBI Police, FEMA
Police, and NIH Police—operate under the standard basic pay plans to
compensate their officers. 23 24

USCP and the three police forces with enhanced retirement benefits
offered among the highest minimum entry-level salaries, ranging from
$52,020 to $55,653, as shown in table 2. At $55,653, USCP and the
Supreme Court Police offered the highest minimum entry-level salaries to
their police officers. NIH Police and Postal Security Force offered the
lowest minimum entry-level salaries among the 10 police forces, at
$38,678 and $38,609, respectively. 25




22
   For the purpose of this review, entry-level refers to a 0083 police officer (or equivalent)
entering the police force at the lowest level; and entry-level salary refers to the minimum
possible starting salary that police force offers to its entry-level police officer.
23
   As of October 2011, a class action lawsuit, King v. United States of America, No. 07-589
C, is pending in the United States Court of Federal Claims regarding FBI pay. The
complaint alleges, among other things, that the FBI Reform Act of 2002 (Pub. L. No. 107-
273, 116 Stat. 1758, 1830-31 (2002)) increased FBI police officer pay and benefits that
the FBI has failed to provide. In its motion to dismiss, the United States asserted, in
general, that the 2002 Act conveyed discretionary authority to establish a permanent FBI
police force and that the FBI has not yet established such a permanent police force under
that discretionary authority. The United States’ motion to dismiss further provided, in part,
that the FBI determined that implementation would not be feasible given the potential
fiscal impact that the retirement system issues created.
24
  According to OPM, special rates apply to 0083 police officers located in the
Washington, D.C. metropolitan area or who receive D.C. locality pay under 5 U.S.C. §
5305, and at the entry-level grades, these rates are 13.5 percent above the normally
applicable GS locality rates.
25
  We used entry-level salary data for fiscal year 2010 because it was the most recently
completed fiscal year at the time of our review.




Page 12                                                              GAO-12-58 Capitol Police
Table 2: Federal Police Force Retirement Benefits, Pay Plans, and Minimum Entry-Level Salaries, Fiscal Year 2010

                                                                                                                Minimum Possible Entry-
Retirement Benefit      Agency                                               Pay Plan                                  Level Salary ($)a
Enhanced Retirement     USCP                                                 Non-Standard Basic Pay Plan                              $55,653
Benefit                 Supreme Court Police                                                                                         $55,653b
                        Secret Service Uniformed Division                    Police forces that have special                          $55,477
                                                                             authority to set their pay rates
                        Park Police                                                                                                   $52,020
Standard Federal        Pentagon Police                                                                                               $52,018
Employee Retirement
                        BEP Police                                                                                                    $50,355
Benefit
                        Postal Security Force                                                                                         $38,609
                        FEMA Police                                          Standard Basic Pay Plan                                  $43,114
                        FBI Police                                           Police forces for which OPM sets                         $43,114
                                                                             pay rates
                        NIH Police                                                                                                    $38,678
                                          Source: GAO analysis of OPM and federal police force data.
                                          a
                                           All federal police forces have experienced increases in their minimum entry-level salaries since
                                          2002, ranging from approximately $9,900 to $16,000 based on periodic or annual pay scale
                                          adjustments. During this period, USCP’s minimum entry-level salary increased by approximately
                                          $16,000—from $39,427 to $55,653.
                                          b
                                           The Supreme Court Police has an identical minimum entry-level salary as that of USCP and reported
                                          that it always adjusts its pay scale to match the USCP.


Protective Duties and                     USCP reported routinely having a wider variety of duties than other
Methods to Carry Out                      federal police forces. 26 These duties ranged from routinely protecting
These Duties                              members of Congress to buildings. For example, USCP officials stated
                                          that their main focus is protecting life and property, and thus, in addition
                                          to routinely protecting members of Congress, they also protect members’
                                          families throughout the entire United States, as authorized, as well as
                                          congressional buildings, parks, and thoroughfares.

                                          Conversely, the Postal Security Force reported having fewer duties, and
                                          the protective duties that it does have, including routinely protecting
                                          employees and buildings, are ones that all or most of the police forces,
                                          including the USCP, also have. Postal Security Force officials stated that
                                          their officers’ primary duty is routinely protecting the United States Postal
                                          Service buildings and mail processing facilities. Figure 1 identifies the
                                          reported routine protective duties of USCP and the nine federal police
                                          forces we reviewed.



                                          26
                                               For the purpose of this review, “routinely” is defined as daily to several times a week.




                                          Page 13                                                                   GAO-12-58 Capitol Police
Figure 1: Routine Protective Duties of Federal Police Forces




                                         a
                                             CBRN refers to chemical, biological, radiological, or nuclear facilities or materials.
                                         b
                                          USCP officials stated that USCP routinely protects the Capitol Power complex, which houses some
                                         chemical materials.
                                         c
                                         Park Police reported routinely protecting the Vice President in support of the United States Secret
                                         Service.
                                         d
                                          Secret Service Uniformed Division reported routinely protecting the Vice President of the United
                                         States and his immediate family.
                                         e
                                             Pentagon Police reported routinely protecting the Pentagon Memorial.
                                         f
                                          BEP Police reported routinely protecting the nation’s currency.
                                         g
                                             FBI Police reported its officers routinely assist in the protection of the FBI director.


                                         In addition to the routine protective duties listed above, some of these
                                         federal police forces, including the USCP, have shared jurisdiction with
                                         other non-federal police forces. For example, Park Police officials said
                                         that they have a shared understanding with the states of Maryland and
                                         Virginia to investigate homicides in federal parks within these states.
                                         Officials from USCP stated that they have statutory authority for extended



                                         Page 14                                                                           GAO-12-58 Capitol Police
jurisdiction which is shared with the Metropolitan Police Department of the
District of Columbia (MPD). Additionally, BEP Police, FBI Police, and
Pentagon Police officials stated that they have a memorandum of
understanding (MOU) or cooperative agreement with MPD to patrol areas
beyond their primary jurisdiction. For example, as shown in figure 2, as a
result of the statutory authority for extended jurisdiction, USCP’s
jurisdiction extends several blocks beyond the grounds of the U.S. Capitol
complex. 27




27
  USCP additionally notes that 2 U.S.C. § 1967 authorizes shared jurisdiction between
USCP and MPD.




Page 15                                                         GAO-12-58 Capitol Police
Figure 2: USCP Primary and Shared Jurisdiction with MPD




                                                                                                         28
                                       Note: A provision of the Consolidated Appropriations Act, 2012, expanded USCP’s extended
                                       jurisdiction to include the Reflecting Pool area (not reflected in this figure), which is bordered on the
                                       east by 1st Street, on the west by 3rd Street, on the north by Pennsylvania Avenue, and on the south
                                       by Maryland Avenue.


                                       USCP and three other police forces—FBI Police, Park Police, and
                                       Supreme Court Police—reported routinely using a wider variety of
                                       methods to carry out their duties than the other federal police forces in
                                       our review. We identified six possible methods that federal police forces
                                       may use routinely in carrying out their duties, and USCP and the FBI
                                       Police reported using all six, as figure 3 indicates. In addition, the FBI



                                       28
                                         Section 1202 of Pub. L. No. 112-74, 125 Stat. (2011) provided, in general, that to the
                                       extent to which the Director of the National Park Service has jurisdiction and control over
                                       such specified area, such jurisdiction and control is transferred to the Architect of the
                                       Capitol. In turn, under 2 U.S.C. § 1961, Capitol Police jurisdiction over United States
                                       Capitol Buildings and Grounds includes, among other things, property acquired in the
                                       District of Columbia by the Architect of the Capitol.




                                       Page 16                                                                     GAO-12-58 Capitol Police
                                        Police, Park Police, and Supreme Court Police also reported routinely
                                        using other methods to carry out their duties, such as counter-
                                        surveillance horse patrol, and standing post. All 10 of the police forces we
                                        reviewed reported routinely patrolling in vehicles and conducting entrance
                                        or exit screenings, and all except the NIH Police reported patrolling on
                                        foot. The NIH Police officials explained that their mission is protecting the
                                        NIH facility of about 347 acres, including biological-safety laboratories
                                        and responding to emergency calls, and thus, officers generally do not
                                        stand post but are out at the facility patrolling in vehicles.

Figure 3: Methods Used Routinely by Federal Police Forces to Protect People and Property




                                        a
                                         Patrol in vehicle refers to patrolling in a car or golf cart or on a motorcycle, Segway® Personal
                                        Transporter, etc.
                                        b
                                            Conduct K-9 refers to law enforcement work conducted by specially-trained officers and canines.
                                        c
                                            FBI Police reported using counter-surveillance method routinely.
                                        d
                                            Park Police stated that its officers routinely patrol on horse.
                                        e
                                         Supreme Court Police reported that its officers routinely stand post around the perimeter of the
                                        Supreme Court building.


                                        USCP also reported that it routinely engages in a variety of activities
                                        similar to those reported by some of the nine federal police forces in
                                        carrying out its protective duties. For example, USCP and seven of the
                                        other nine police forces reported routinely conducting specialized


                                        Page 17                                                                     GAO-12-58 Capitol Police
activities such as Special Weapons and Tactics (SWAT), K-9, or
Containment and Emergency Response Team (CERT) activities. 29 Also,
USCP and eight of the other nine forces reported routinely conducting
traffic control and responding to suspicious activities, in particular,
suspicious packages and people. USCP officials indicated that suspicious
packages within the Capitol complex have typically been items such as
unattended backpacks that have not contained hazardous devices such
as bombs. Also, the Pentagon police, in noting that the Pentagon is still a
likely target since the terrorist attacks of September 11, 2001, cited
incidents such as a March 2010 attack when a gunman tried to shoot his
way through the entrance of the building. In addition, USCP and the
Pentagon Police reported routinely responding to chemical, biological,
radiological, and nuclear (CBRN) or hazardous material (HAZMAT)
threats. Figure 4 summarizes the routine activities reported by each
police force.




29
  For the purpose of this report, SWAT refers to activities requiring specially trained
agents to intervene in high-risk events such as hostage and barricade situations, and
CERT activities refer to providing specialized response for events requiring heightened
protective measures such as counter sniper operations.




Page 18                                                          GAO-12-58 Capitol Police
Figure 4: Activities Routinely Conducted by Federal Police Officers




                                         a
                                             Suspicious activity response refers to response to suspicious people, packages, or vehicles.
                                         b
                                             Specialized activity refers to such activity as SWAT, K-9 or CERT.
                                         c
                                          Park Police reported routinely conducting aviation operations, search and rescue, medical
                                         evacuation, and horse-mounted patrols.
                                         d
                                             The Supreme Court police reported routinely standing post both inside and outside the buildings.
                                         e
                                          Postal Security Force reported that officers do not routinely engage in the identified activities but
                                         engage in burglary responses of postal service stations on an occasional to routine basis.


Employment Requirements                  USCP and most of the federal police forces in our review generally have
                                         similar employment requirements for their entry-level police officers,
                                         including eligibility requirements and requirements for the hiring process.
                                         All of the police forces require applicants to be a U.S. citizen, in good
                                         physical condition, have a valid driver’s license, and have no criminal
                                         history in order to be eligible for employment. Also, most federal police
                                         forces require some college experience or prior related experience, with
                                         the exception of USCP and Secret Service Uniformed Division, which
                                         require their officers to have a high school diploma or General
                                         Equivalency Diploma (GED) certificate. However, officials at USCP and
                                         Secret Service Uniformed Division stated that they also receive applicants
                                         with college or law enforcement experience. In addition, Postal Security



                                         Page 19                                                                      GAO-12-58 Capitol Police
                                           Force officials stated that their officers are not required to have a high
                                           school diploma or GED certificate; however, they are required to have
                                           been employed by the Postal Service for at least 1 year, and the position
                                           that they held does not have to be law enforcement related. Most of the
                                           police forces that offer enhanced retirement benefits also differ from the
                                           other police forces in that they have a maximum age for applicants and
                                           require applicants to have good character and leadership skills. Figure 5
                                           provides the eligibility requirements for each federal police force in our
                                           review.

Figure 5: Eligibility Requirements for Entry-Level Federal Police Officersa




                                           a
                                            Some federal police forces also have various knowledge, skill, and ability (KSA) requirements,
                                           including the ability to effectively solve problems, the skill to function effectively in a stressful
                                           environment; skill in effective oral communication; the ability to communicate effectively in writing; the
                                           ability to function effectively in a team environment; knowledge of local, state, and federal law
                                           involved in law enforcement work; and the ability to enforce law and order, among others.
                                           b
                                            Secret Service Uniformed Division requires that applicants who are eligible for veterans preference
                                           must receive a conditional job offer letter prior to reaching age 40, in order to continue in the
                                           application process; applicants who are not eligible for veterans preference must receive a conditional
                                           job offer letter prior to reaching age 37, in order to continue in the application process.




                                           Page 20                                                                      GAO-12-58 Capitol Police
c
 Supreme Court Police requires a bachelor’s degree to apply. As to the requirements to having valid
driver’s license, being able to carry a firearm, and having minimum visual acuity, these were not
specified in the Supreme Court police officer’s job vacancy announcement; however, the Chief of the
Supreme Court Police identified these as requirements.
d
 The FBI Police requires a high school diploma and prior related experience, and FBI officials stated
that some college experience is highly desirable. Also the police force requires selected applicants to
sign a service agreement to remain in the police officer position for 2 years.


Federal police forces generally have similar requirements for their hiring
processes. For example, as shown in figure 6, each police force requires
applicants to have an interview, medical examination, background
investigation, and training either pre or post hiring, primarily at the Federal
Law Enforcement Training Center (FLETC). 30 Furthermore, most of the
federal police forces, including USCP, require applicants to complete a
drug test and a written examination. USCP differs from the majority of
police forces, however, in that it does not require its officers to obtain a
security clearance, but it does require a psychological evaluation,
polygraph test, and a complete background investigation.




30
  FLETC is the largest single provider of law enforcement training for the federal
government.




Page 21                                                                    GAO-12-58 Capitol Police
Figure 6: Requirements for the Hiring Process for Federal Police Officers




                                          a
                                           Postal Security Force requires applicants to be able to hear the conversational voice without the use
                                          of a hearing aid.
                                          b
                                           Park Police requires selected applicants to satisfactorily complete a 1-year probationary period; the
                                          Pentagon Police requires employees to be able to report to work within 1 hour of notification.
                                          c
                                              USCP training is a post hiring requirement.
                                          d
                                           Secret clearance is required by the Park Police and Pentagon Police, and Top Secret clearance is
                                          required by the Secret Service Police, FEMA Police, BEP Police, and FBI Police. Also, the Postal
                                          Security Force requires its officers to maintain a Postal Service “sensitive clearance” that is different
                                          from the national security clearance category such as Secret or Top Secret clearance.
                                          e
                                           USCP and Secret Service Uniformed Division officials stated that although physical fitness
                                          evaluation was not included in their hiring process during the time period covered in our review, it will
                                          be a part of the process starting in fiscal year 2012.




                                          Page 22                                                                      GAO-12-58 Capitol Police
                      In addition to enhanced retirement benefits and a higher minimum entry-
USCP Has Relatively   level salary, USCP has experienced lower attrition than six of the other
Low Attrition and     nine federal police forces, and USCP reported that attrition was not a
                      problem from fiscal years 2005 through 2010. Also, USCP and some of
Reported No           the other nine federal police forces reported that officers who voluntarily
Difficulty with       separate for reasons other than retirement do so for personal reasons or
Recruiting            career advancement; few forces cited the desire for greater retirement
                      benefits or better salary as a reason why officers leave. While USCP and
                      seven of the other nine police forces said that human capital flexibilities
                      were important tools for recruiting and retaining police officers, their use
                      generally depends on need or budget, among other factors.


Attrition             From fiscal years 2005 through 2010, USCP’s average attrition rate was
                      6.5 percent compared to the other nine federal police forces, which
                      ranged from 3.5 percent to just under 14 percent. 31 Three of the other
                      nine police forces—BEP Police, NIH Police and Park Police—had lower
                      attrition rates than USCP, while the remaining six forces had higher
                      attrition rates during the same period, as shown in figure 7.




                      31
                         The attrition rates used in this report are aggregate attrition rates for the entire police
                      workforce, calculated as the number of separations (which includes retirement, voluntary
                      separations, internal transfers or reassignments, involuntary separations, and deaths)
                      divided by the number of officers onboard from fiscal years 2005 through 2010. We
                      collected data on age and years of service for the officers who separated from the 10
                      federal police forces included in our review from 2005 through 2010; however, we did not
                      collect data on age and years of service for all officers employed by the 10 police forces
                      during this time period. Because of this data limitation, we were not able to separate
                      attrition rates by age or years of service, which would have allowed us to look at the affect
                      that age or service composition of the workforce has on the aggregate attrition rate. For
                      example, a workforce with a high concentration of older employees eligible for retirement
                      may show a high aggregate attrition rate solely because of its high concentration of older
                      employees. Similarly, a workforce that has recently been enhanced by a large number of
                      new hires may temporarily have a higher aggregate attrition rate because of a tendency
                      for new hires to leave service, voluntarily or involuntarily, at a higher rate than more
                      seasoned employees. As a result, differences in aggregate attrition rates could be
                      explained, in part, by differences in the age or service composition of the workforce.




                      Page 23                                                             GAO-12-58 Capitol Police
Figure 7: Attrition at Federal Police Forces from Fiscal Years 2005 through 2010




                                          a
                                           The average attrition rate among the 10 federal police forces in our study was 8.7 percent from fiscal
                                          years 2005 through 2010.
                                          b
                                           The average attrition rate for the FBI Police was calculated using fiscal year 2007 through 2010
                                          separation data because data for fiscal years 2005 and 2006 were not available in the Central
                                          Personnel Data File.


                                          USCP as well as four other police forces reported that attrition was not a
                                          problem, and the most common explanation officials offered was the
                                          current economy. For example, USCP and BEP Police officials stated that
                                          with fewer jobs available in the economy, officers were remaining
                                          employed by their police forces. Specifically, from fiscal years 2005
                                          through 2008, when the national unemployment rate was 4.9 percent, the
                                          average attrition rate among the police forces in our review was about 9.2
                                          percent. 32 However, during fiscal years 2009 and 2010, when the national
                                          unemployment rate was 9.1 percent—almost twice as high as the


                                          32
                                             The unemployment rates for fiscal years 2005 through 2008 and fiscal years 2009
                                          through 2010 are the averages of the monthly unemployment rates listed by the Bureau of
                                          Labor Statistics for those time frames.




                                          Page 24                                                                    GAO-12-58 Capitol Police
                                         preceding 4 years—the combined average attrition rate for the police
                                         forces was lower, about 7.5 percent. The FBI Police was the only force
                                         with a higher attrition rate (17.9 percent) from fiscal years 2009 through
                                         2010. Two of the 10 police forces that reported that attrition was a great
                                         problem—Secret Service Uniformed Division and the FBI Police—also
                                         had the highest attrition rates. The Secret Service Uniformed Division
                                         cited the high cost of living in the Washington, D.C. metropolitan area and
                                         challenging demands of the job as reasons why attrition was a problem.
                                         The FBI Police said better pay, positions, and benefits at other forces
                                         were reasons why attrition was a problem. Figure 8 illustrates federal
                                         police forces’ responses to our survey question on the extent to which
                                         attrition was a problem.

Figure 8: Extent to which Federal Police Forces View Attrition as a Problem




                                         Furthermore, USCP had no problem filling the vacant positions left by
                                         officers leaving the force as they are able to attract qualified applicants.
                                         USCP and three of the other nine police forces—Park Police, FEMA
                                         Police and FBI Police—reported that they had no difficulty attracting
                                         qualified applicants. Our analysis of USCP data indicates that from fiscal
                                         year 2006 through 2010, USCP attracted, on average, 27 qualified
                                         applicants for each available vacancy and maintained a vacancy rate of
                                         2.6 percent. 33 34 During that time, the other nine federal police forces had
                                         an average vacancy rate of 7.9 percent, ranging from 1.9 percent at BEP




                                         33
                                          The majority of federal police forces in our study were unable to supply data on the
                                         number of applicants deemed to be qualified for most fiscal years.
                                         34
                                           Vacancy rate was calculated as follows: authorized full time equivalents (FTE) minus the
                                         average of actual FTEs onboard at the beginning and end of the fiscal year; the result
                                         divided by authorized FTEs.




                                         Page 25                                                           GAO-12-58 Capitol Police
                          Police up to 24.4 percent at FEMA Police. 35 Only two of the other nine
                          forces—BEP Police and Supreme Court Police—had a lower vacancy
                          rate with 1.9 percent and 2.2 percent, respectively. USCP officials cited
                          the slow economy and a competitive salary as reasons why they believe
                          that they have no problem attracting qualified applicants. On the other
                          hand, FBI Police, which has the highest attrition rate among the 10 police
                          forces, stated that it is able to attract a large pool of applicants due to the
                          reputation of the agency. FBI officials said that applicants view the police
                          officer position as an entry-level position with hopes of advancing within
                          the agency. In the case of FEMA Police, officials reported that they had
                          no difficulty attracting qualified applicants; however, they had the highest
                          vacancy rate among the 10 police forces. Officials explained that from
                          2004 through 2010 FEMA Police was building its force and during that
                          time management would periodically place a hold on hiring due to budget
                          constraints.


Primary Reasons Why       Federal police forces said that their police officers generally leave their
Federal Police Officers   forces either because of personal reasons or for better career
Leave or Stay             advancement opportunities, and officers generally stay because of
                          appreciation for the agency’s mission. 36 For example, USCP and three
                          other police forces indicated that most of their police officers leave for
                          personal reasons, such as the desire to work closer to home. At the same
                          time, five other police forces—Supreme Court Police, FBI Police, FEMA
                          Police, Pentagon Police, and Postal Security Force—cited career
                          advancement as the reason for officer attrition. Specifically, career
                          advancement, as stated by the agencies, was either the acceptance of a
                          higher level position at another agency or a transfer to an agency that has
                          greater potential for future promotion. For example, our analysis shows
                          that the majority of FBI’s voluntarily-separated officers transferred to
                          different positions within the agency, such as an agent or intelligence
                          analyst position. FBI Police officials said that applicants often view the
                          police officer position as a stepping stone to advance to these positions.



                          35
                            The vacancy rate for BEP Police was calculated using fiscal years 2008 through 2010
                          FTE data because the BEP Police was unable to provide data from previous fiscal years.
                          36
                             The majority of federal police forces in our study reported that exit surveys of separating
                          officers were either not conducted, not mandatory, or only recently initiated, and USCP
                          reported that the response rate for its voluntary exit surveys was low. Therefore, we used
                          senior level police force officials’ responses to our survey questions to identify reasons
                          why officers leave or stay with their police force.




                          Page 26                                                             GAO-12-58 Capitol Police
                                         Furthermore, USCP and three other police forces reported that quality-of-
                                         life was one of the main reasons police officers stay with their forces,
                                         citing such underlying factors as the work environment and work-life
                                         balance. USCP said that pay and job security were two other main
                                         reasons that police officers remain employed by the force. Also, 6 of the
                                         10 forces stated that agency mission was a key reason that officers stay
                                         with their agencies. Figure 9 summarizes the primary reasons that federal
                                         police force officials offered for why their officers leave or stay.

Figure 9: Federal Police Force Officials’ Perspectives on Primary Reasons Why Officers Left or Stayed with the force since
2010




                                         Note: Personal reasons include family reasons, medical reasons, and relocation.




                                         Page 27                                                                 GAO-12-58 Capitol Police
While the USCP Labor Committee asserted that inadequate retirement
benefits have contributed to attrition among USCP officers, USCP did not
report retirement benefits as a reason why its officers left, as shown in
figure 9. On the other hand, there were other police forces that identified
inadequate retirement benefits as a reason for officer attrition—BEP
Police, FBI Police, and Pentagon Police—which were among the police
forces that offer standard, as opposed to enhanced, retirement benefits.
However, our analysis suggests that the fact that a police force offers
enhanced retirement benefits does not necessarily mean that it will have
lower attrition compared to others police forces, and vice versa. For
example, the Secret Service Uniformed Division offers enhanced
retirement benefits, yet it had the second highest attrition rate among the
federal police forces, whereas NIH Police offers standard retirement
benefits and has one of the lowest attrition rates. 37 Further, none of the
police forces that offered enhanced retirement benefits cited those
benefits as a reason why officers stayed at their police force.

Although the difference in retirement benefits may not fully indicate why
officers leave a police force, it may influence the timing of when officers
leave. For all of the police forces with enhanced retirement benefits, a
greater percentage of the officers who left—73 percent—did so within the
first 5 years of service or after 20 years of service, compared to those
forces with standard retirement benefits, where 54 percent of separating
officers left either within the first 5 years of service or after 20 years of
service. The Director of USCP Human Resources stated that if an officer
stays with USCP beyond 5 years, that officer is likely to stay at least until
the individual reaches early retirement, generally after 20 or 25 years of
service. Figure 10 compares the timing of separation of police officers at
police forces with enhanced retirement benefits to those with standard
retirement benefits from fiscal years 2005 through 2010.




37
   These findings should not be interpreted to mean that the level of retirement benefits
does not have any effect on attrition. A multi-factor statistical analysis would be required to
draw conclusions about the effect that any single factor has on attrition. We did not
conduct such analysis as part of this review. However, our findings do provide some
insight on the effects of individual factors.




Page 28                                                              GAO-12-58 Capitol Police
Figure 10: Attrition by Years of Service at Federal Police Forces, Fiscal Years 2005
through 2010




Note: The percentage of separating officers under standard retirement benefits with less than 5 years
of service was 38 percent; between 5 and 20 years of service was 46 percent; and with 20 or more
years of service was 16 percent. The percent of separating officers under enhanced retirement
benefits with less than 5 years of service was 52 percent; between 5 and 20 years of service was 27
percent; and with 20 or more years of service was 21 percent.


As with greater retirement benefits, desire for a better salary was not cited
by a majority of police forces as a reason why officers leave from or stay
with their forces. As shown in figure 9, only 2 of the 10 forces—FBI Police
and Postal Security Force—said that officers leave for better salaries, and
3 of the 10 forces—USCP, Park Police, and Pentagon Police—said that
officers stay for better salaries. Also, federal police forces with higher
minimum entry-level salaries did not always have lower attrition. 38 For
example, USCP and Secret Service Uniformed Division were among the
highest paid federal police forces. USCP had among the lowest attrition,
and Secret Service Uniformed Division had among the highest. Further,
NIH Police, which offered one of the lowest minimum entry-level salaries,
maintained the second lowest attrition from fiscal years 2005 through
2010, as displayed in table 3.




38
   There are aspects of compensation other than minimum entry-level salary that may
affect attrition such as the maximum possible salary officers could earn and promotion
opportunities. However, we did not address these factors as part of our review.




Page 29                                                                  GAO-12-58 Capitol Police
                Table 3: Attrition, Retirement Benefits, and Pay at Federal Police Forces

                 Retirement           Average Attrition, fiscal years                                         Minimum Possible
                 Benefit              2005 Through 2010 (%)                            Agency              Entry-Level Salary ($)
                 Standard             3.5%                                             BEP Police                        $50,355
                 Standard             4.8%                                             NIH Police                        $38,678
                 Enhanced             5.9%                                             Park Police                       $52,020
                 Enhanced             6.5%                                             USCP                              $55,653
                 Standard             8.9%                                             Pentagon                          $52,018
                                                                                       Police
                 Enhanced             9.5%                                             Supreme                           $55,653
                                                                                       Court Police
                 Standard             9.7%                                             Postal                            $38,609
                                                                                       Security
                                                                                       Force
                 Standard             11.6%                                            FEMA Police                       $43,114
                 Enhanced             12.4%                                            Secret                            $55,477
                                                                                       Service
                                                                                       Uniformed
                                                                                       Division
                 Standard             13.9%                                            FBI Police                        $43,114
                Source: GAO analysis based on CPDF and GAO 2011 survey of select federal police forces.



Human Capital   Most of the police forces in our review stated that the use of human
Flexibilities   capital flexibilities was of at least some importance for recruiting and
                retaining officers. Five of the 10 federal police forces in our study,
                including USCP, reported that human capital flexibilities were important or
                very important to recruiting and retaining police officers, while two police
                forces—Postal Security Force and FEMA Police—stated that they were
                not important. The other forces—FBI Police, Park Police, and Supreme
                Court Police—reported that human capital flexibilities are somewhat or
                moderately important. Further, NIH Police was the sole police force that
                reported a human capital flexibility as one of the primary reasons that
                officers remained employed by their police force. Figure 11 identifies the
                federal police forces’ views on the importance of human capital
                flexibilities.




                Page 30                                                                                   GAO-12-58 Capitol Police
Figure 11: Federal Police Forces’ Views on the Importance of Human Capital Flexibilities




                                         USCP and the other police forces offered a variety of human capital
                                         flexibilities related to work-life balance, relocation and position
                                         classification, and recruitment and retention, among others. For example,
                                         all of the police forces, except the USCP, reported offering cash
                                         performance bonuses to their officers. USCP officials noted that they did
                                         not offer this particular flexibility because it was not necessary to recruit
                                         and retain officers. Conversely, in some cases, flexibilities that were
                                         available to police forces to use were not offered to police officers. For
                                         example, three police forces—USCP, Park Police and FEMA Police—
                                         reported that they did not use all of the recruitment and retention
                                         flexibilities available to them because they were not needed since they
                                         have a sufficient number of applicants. USCP and Park Police officials
                                         further stated that they did not offer these flexibilities due to budget
                                         constraints. Other human capital flexibilities were not offered because
                                         they were not available to police forces. Police forces generally reported
                                         not having some flexibilities available to their agencies because they had
                                         not requested that such flexibilities be made available, explaining that
                                         they did not need them as they were able to attract qualified applicants
                                         without offering more flexibilities. For example, the transportation subsidy
                                         was not available to Postal Security Force because, according to Postal
                                         Security Force officials, they did not need this flexibility to be made
                                         available to their force as they did not have difficulty in attracting
                                         applicants. Figure 12 provides information on federal police forces’
                                         human capital flexibilities.




                                         Page 31                                                 GAO-12-58 Capitol Police
Figure 12: Human Capital Flexibilities Available to and Offered by Federal Police Forces




                                          a
                                           Superior qualifications refer to increase in pay above the minimum pay because of the superior
                                          qualifications of the candidate or a special need of the agency for the candidate’s services.
                                          b
                                          Specialized unit opportunity refers to opportunities to work in units such as SWAT, K-9, or CERT.




                                          Page 32                                                                  GAO-12-58 Capitol Police
c
 Waiver of qualification requirement refers to waiving training requirements based on previous
experience or training.
d
    Alternative work schedule refers to compressed schedule or flexible hours schedule.
e
 USCP officials stated that their police officers have access to child care services through the House
and Senate Child Care Centers.


Even though human capital flexibilities are intended to be a tool to recruit
and retain employees, and most of the police forces considered them at
least somewhat important, the police forces that offered a wider variety of
human capital flexibilities did not always have lower attrition rates. For
example, NIH Police and Secret Service Uniformed Division were the two
forces that offered the widest variety of flexibilities. Yet, NIH Police had
the second lowest attrition rate, and Secret Service Uniformed Division
had the second highest attrition rate.

While retirement benefits, pay, and use of human capital flexibilities could
affect attrition, the extent to which they do so can vary for a given agency,
and other factors—such as family issues and promotion opportunities, as
previously discussed—could influence an employee’s decision to leave or
remain with his or her employer. Therefore, when an agency is
determining its strategy for recruiting and retaining qualified employees,
assessing the extent to which attrition is a problem, and developing
strategies that address the problem, will be important.




Page 33                                                                     GAO-12-58 Capitol Police
                          The benefits of USCP officers retiring at the age of 57 under existing
Benefits under            FERS provisions, if fully utilized by USCP officers, would meet retirement
Existing FERS             income targets generally recommended by some retirement experts.
                          However, the level of benefits depends significantly on the level of
Provisions Generally      employee TSP contributions. In 2010, the USCP Labor Committee
Meet Recommended          presented six proposals that would enhance the current USCP benefit
Targets, if Fully         structure. Five of the six would increase existing costs; our review found
                          that the other proposal, which urges the USCP Board to exercise its
Utilized, with TSP        current authority by allowing officers to voluntarily remain on the job until
Balances Being a          age 60 rather than retire at 57, as mandated, would have a minimal
                          impact on costs to the federal government and could improve officers’
Significant Factor        retirement benefits. 39


Existing FERS Benefits    In June 2011 we reported that there was little consensus among experts
Vary Depending on Level   about how much income constitutes adequate retirement income. 40 The
of TSP Contributions      replacement rate is one measure some economists and financial advisors
                          use as a guide for retirement planning; it is the percentage of pre-
                          retirement income that is received annually in retirement. Our review
                          showed that some economists and financial advisors considered
                          retirement income adequate if the ratio of retirement income to
                          preretirement income—the replacement rate—is from 65 to 85 percent. 41

                          To illustrate the effect of current FERS provisions on retirement income,
                          we analyzed retirement benefits for illustrative USCP workers hired at
                          ages 22, 27, and 37, retiring at age 57, and making three different levels
                          of TSP contributions, as described in appendix I. 42 Overall, we found the


                          39
                            Apart from cost considerations, however, the proposal to encourage the Capitol Police
                          Board to use its discretionary authority to make blanket exemptions from the mandatory
                          retirement age provision until the age of 60, could run counter to the general legislative
                          requirement for a mandatory retirement age. The mandatory retirement age requirements
                          are designed to maintain a young and physically vigorous USCP force.
                          40
                            GAO, Ensuring Income throughout Retirement Requires Difficult Choices, GAO-11-400
                          (Washington D.C.: June 7, 2011). Retirement income adequacy may be defined relative to
                          a standard of minimum needs, such as the poverty level, or to the level of spending
                          households experienced during working years.
                          41
                            The study examined general replacement rates and did not examine specific
                          replacement rates of police officers.
                          42
                            Since over 80 percent of USCP sworn officers are either grade 3 or on a career track to
                          grade 3, we used examples of officers who retired from grade 3 having followed the
                          standard career track for such positions.




                          Page 34                                                           GAO-12-58 Capitol Police
total replacement rates for retirement at age 57 ranged from a low of
about 54 percent for a worker hired at age 37 making no TSP
contributions to 91 percent for a worker hired at age 22 making 10
percent TSP contributions, as shown in figure 13. A worker hired at age
27, which is the average age at which individuals are hired by USCP,
retiring at age 57, and contributing 5 percent to TSP (and thereby getting
the maximum employer match) would have a replacement rate of 75
percent, which would be in the middle of recommended replacement rate
targets. Among our illustrative examples, only workers hired at age 37 or
those who made no contributions to their TSP accounts would have
replacement rates below 75 percent. Workers hired at age 37 may also
have retirement income through prior employment. These are examples
of individual workers, not households, since we had no basis for
simulating the income and retirement benefits of spouses. Any benefits
spouses received would add to household retirement income. These
examples also assume there is no leakage from the TSP accounts in the
form of TSP loans that are not repaid or lump-sum distributions that are
not used as retirement income. 43




43
 GAO, Policy Changes Could Reduce the Long-term Effects of Leakage on Workers’
Retirement Savings, GA0-09-715 (Washington, D.C.: Aug. 28, 2009).




Page 35                                                    GAO-12-58 Capitol Police
Figure 13: Replacement Rates Under Existing FERS Provisions for Three Levels of TSP Contributions for Officers Retiring at
Age 57




                                         Note: Numbers may not add due to rounding. Replacement rates here are the percentage of the final
                                         year’s salary that retirement income replaces. TSP annuities reflect employer contributions for
                                         corresponding levels of employee contributions. Replacement rates from the TSP annuity alone when
                                         workers make no contributions (but receive the automatic agency 1 percent contribution) range from
                                         about 1 to 2 percent depending on age at hire. For these illustrations, we used an inflation-adjusted
                                         rate of return on TSP account balances of 2 percent. These examples show officers hired as trainees
                                         and progressing through the grades and steps of the pay scale based on time in grade. We focus on
                                         grade 3 officers because in 2010, over 80 percent of all officers were grade 3 or on their way to grade
                                         3. The replacement rates for Social Security used in this chart are for the officer hired at age 22; for
                                         illustrative purposes only, doing so assumes all cases have the same Social Security earnings
                                         histories whether from USCP employment or elsewhere. Before age 62 retired officers would not be
                                         eligible for Social Security but may receive a supplement that takes its place, which would generally
                                         be somewhat smaller. For additional information regarding the graphic shown, only 2 percent of
                                         officers were hired at age 37 or older, and 40 percent of officers were hired between age 25 and 30.
                                         Hence, 27 was the approximate midpoint of this particular age range and represents the typical age
                                         officers are hired.




                                         Page 36                                                                    GAO-12-58 Capitol Police
Our analysis also shows that employee TSP contribution levels over the
course of a career can make a significant difference to total retirement
income. For workers hired at age 27, for example, increasing the
contribution rate from 0 to 5 percent over the entire career would increase
replacement rates at age 57 by 11 percentage points, bringing them from
just below the recommended target range to the middle of it. In general,
the longer a worker’s career, the more years they make contributions and
earn investment returns, and the greater a difference the contribution rate
makes. According to USCP data, in 2010, 12 percent of officers made no
contributions to TSP, and another 10 percent contributed less than 5
percent of pay, thereby forgoing some portion of the full employer
matching contribution, as shown in figure 14. However, the data suggest
that workers typically do increase their contributions over time, and 54
percent of officers contribute more than 5 percent of pay.

Figure 14: Percentage of Officers Making Employee Contributions to TSP at
Different Levels (2010)




Note: The Internal Revenue Code (I.R.C.) places limits on the dollar amount of contributions you can
make to the TSP. The elective deferral limit for 2012 is $17,000.




Page 37                                                                  GAO-12-58 Capitol Police
Most of the Proposed   In 2010, the USCP Labor Committee provided selected members of
Benefit Enhancements   Congress with six proposed changes to further enhance the current
Would Increase         USCP benefit structure. None of the proposals included cost estimates,
                       nor have CBO or OPM estimated the costs of any of the proposed
Government Costs       changes. 44 Based on our review, we found that five of the six proposals, if
                       adopted, would increase costs and increase current pay and benefit
                       disparities between USCP and other federal LEO and non-LEO groups.
                       One proposal, which suggests that the USCP Board further exercise its
                       current discretionary authority to allow officers to voluntarily remain on the
                       job until age 60, would have a minimal effect on costs. 45 Table 4
                       discusses each proposal and its potential effect on costs to the federal
                       government and officers’ benefits. 46




                       44
                         CBO is required to develop a cost estimate for virtually every bill reported by
                       congressional committees to show how it would affect spending or revenues over the next
                       5 years or more. CBO also prepares cost estimates for use in drafting bills (especially in
                       the early stages), formulating floor amendments, and working out the final form of
                       legislation in conference committees. According to OPM, OPM is required to calculate
                       unique estimates for each subgroup of beneficiaries to which a unique structure of plan
                       provisions applies. OPM develops a single LEO calculation that applies to all federal LEOs
                       that are receiving the same benefits. OPM cannot develop cost estimates for USCP in part
                       because USCP officers are employees of the legislative branch and OPM’s Central
                       Personnel Data File does not contain information on these employees. However, if the law
                       were amended to change the USCP FERS benefit formula in any way that differed from
                       what was provided to the broader LEO population, then OPM would be required to
                       calculate USCP benefits separately.
                       45
                         Apart from cost considerations, however, the proposal to encourage the Capitol Police
                       Board to use its discretionary authority to make blanket exemptions from the mandatory
                       retirement age provision until the age of 60could run counter to the general legislative
                       requirement for a mandatory retirement age. The mandatory retirement age requirements
                       are designed to maintain a young and physically vigorous USCP force.
                       46
                         Some of the benefit changes included in the USCP Labor Committee proposals could
                       also have certain nonfinancial effects on agency operations. For example, several
                       proposals, if implemented, could exacerbate current wage disparities between the USCP
                       and other federal LEOs and non-LEOs. In addition, the proposal to compress the USCP
                       pay scale could give officers an incentive to retire earlier, which could give them less time
                       to accrue retirement income.




                       Page 38                                                             GAO-12-58 Capitol Police
Table 4: Five Proposals Would Increase Costs to the Federal Government

                                                                                                                          Are similar provisions
                                     Potential cost to the federal                Potential benefit to USCP               available to comparable
                                                 a
    Proposal description             government                                   officers                                federal police forces?
1   Increase current employee        If implemented, this proposal                If implemented, this proposal would     No. According to OPM,
    FERS annuity percentages         would increase accrual rates by              increase an officer’s FERS annuity      the higher LEO accrual
    from 1.7% for the first 20       18% per year for the first 20 years          amount by 6% for the first 20 years     rate was established for
    years and 1.0% for every         of service and by 100% for each              of service and an additional 1% for     the specific purpose of
    year after of covered service    year of service beyond 20 years.             each year of service beyond 20          making early retirement
    to 2% for every year of          increasing government costs                  years.                                  economically feasible.
    covered service.                 significantly.b
2   Keep FERS annuity                If implemented, this proposal                If implemented, this proposal would No
    percentages at 1.7% for the      would double the accrual rates for           increase an officer’s current FERS
    first 20 years of covered        each year of service beyond 20               annuity amount by 1% for each
    service and all years after 20   years, increasing government                 year of service beyond 20 years.
    would be 2.0% for each year      costs significantly.
    of additional service.
3   Keep all FERS annuity            If implemented, this proposal                If implemented, this proposal would No
    percentages the same             would increase government costs              increase an officer’s FERS annuity
    through years of covered         by inflating the salary amounts              amount by increasing the amount
    service but offer a “true high   used to calculate the “high 3”               used to calculate the “high 3”
    3” to include overtime and       average salary, thereby                      average salary.
    differentials.                   increasing the annuity amount
                                     due.c
4   Keep FERS annuity                If implemented, this proposal                If implemented, this proposal would No
    percentages the same but         would increase government costs              not change the FERS annuity
    have USCP cover costs for        by 33%. Currently, USCP retirees             amount for retirees or survivors, but
    continued health care            and survivors receiving benefits,            it could increase the net amount of
    benefits upon retirement with    like other federal retirees and              retirement income since the
    no contributions from the        survivors, are required to pay at            retiree’s or survivor’s share of
    retiree or survivor.             least 25% of their health                    health insurance premiums would
                                     insurance premiums.                          no longer be withheld.
5   Have USCP compress the           If implemented, this proposal                If implemented, this proposal would     Yes. Pub. L. No. 111-
    current pay scale to allow an    could increase the government’s              ensure that all officers with 23        282, 124 Stat. 3033
    officer to reach maximum         direct salary costs by allowing              years of service would be eligible to   (2010) reduced the
    base pay at year 20 of           officers to earn higher salaries             receive the maximum available           amount of service time
    covered service instead of at    earlier and reach the maximum                FERS annuity amount.                    required for Secret
    year 26.                         high-3 average 6 years sooner                                                        Service Uniformed
                                     than currently possible.                                                             Division officers to
                                                                                                                          advance to the highest
                                                                                                                          pay step from 30 years to
                                                                                                                          22 yearsd
                                              Source: GAO analysis of USCP Labor Committee proposals.
                                              a
                                               Costs in this column include direct costs to USCP (e.g., agency contributions to FERS and health
                                              insurance premiums for active officers), as well as costs to the U.S. Treasury (additional contributions
                                              to FERS) and to OPM (government share of health insurance premiums for retirees and survivors).
                                              b
                                               In 2010, CBO estimated the costs of a provision that would increase the annuity paid to certain
                                              Secret Service Uniformed Division officers by 2.5 percent. It found that it would cost the government
                                              about $13 million from fiscal year 2010 through fiscal year 2020. The USCP Labor Committee’s
                                              proposal would likely cost more as a result of a greater number of officers, higher salaries, and lower
                                              attrition rates among USCP officers.




                                              Page 39                                                                      GAO-12-58 Capitol Police
                           c
                            According to OPM, only basic pay should be used to calculate an employee’s high 3 average pay
                           and overtime must be excluded from basic pay calculations.
                           d
                            CBO estimated that this change would cost the federal government $39 million from fiscal year 2010
                           through fiscal year 2014. The USCP Labor Committee’s proposal would likely cost more as a result of
                           a greater number of officers, higher salaries, and lower attrition rates among USCP officers.




One Proposal Would Have    The sixth and final proposal suggests that the USCP Board exercise its
Minimal Impact on          authority to allow officers to remain employed until age 60. The Board
Government Costs and       currently has the discretionary authority to exempt officers with 20 years
                           of service from the mandatory retirement age of 57 if an officer’s
Allow Additional Savings   continued service is deemed to be in the public interest. 47 According to
for Retirement             USCP, the Board has approved 17 such exemptions since Sept. 30,
                           2006: 16 in 2008 and 1 in 2010. It is unclear how many current officers
                           would be affected by this proposal. According to USCP data, the average
                           age at which officers retired from 2005 through 2010 retired was 54—3
                           years before the mandatory retirement age of 57. 48

                           The actual costs associated with this proposal would be contingent on the
                           number of officers who chose to work longer. 49 However, if the USCP
                           Board deemed it to be in the public interest to allow more officers to
                           voluntarily work past age 57, projections 50 show a slight reduction in
                           pension costs and a slight increase in payroll costs, largely offsetting




                           47
                             An officer may work beyond age 57 without an exemption if he or she has not yet
                           completed the required 20 years of LEO service. 5 U.S.C. § 8335(b),(c),(d); 5 U.S.C. §
                           8425(b),(c),(d). However, the officer must be separated on the last day of the month in
                           which he or she completes 20 years of service.
                           48
                             USCP data show the vast majority of officers are hired before the age of 35, which
                           means that the vast majority of officers attain the 20 years of service needed for full
                           retirement before the age of 55.
                           49
                             Officers choosing to work longer would still have to meet the physical fitness and health
                           standards associated with LEO service.
                           50
                             Actuarial projections were performed by OPM using assumptions, suggested by GAO
                           and agreed to by OPM, as to the number of officers who choose to work longer.




                           Page 40                                                                 GAO-12-58 Capitol Police
each other and resulting in a minimal overall long-term cost impact. 51
However, according to OPM, the savings actually realized by USCP
directly due to reduced pension costs would be further minimized
because the costs and savings would be distributed across the entire
LEO population, under the cost allocation methodology used for FERS. In
terms of USCP payroll costs, the later retirements would result in a less
than 1 percent increase in total payroll throughout the projection period. 52
This increase in payroll costs would largely offset the savings in pension
costs, so that the overall net long-term cost effect to USCP of this
proposal could be a very small or minimal increase, depending on the
amount of pension costs allocated to USCP directly when distributed
across the LEO population. In addition, the costs associated with paying
agency matching contributions to officers’ TSP accounts would also be
minimal since the total increase could not exceed 5 percent of the less
than 1 percent increase in payroll costs.

According to our analysis, retiring at age 60 instead of 57 could
significantly increase retirement incomes—more through TSP
contributions than through the FERS annuity. The effect of later
retirement on the FERS basic annuity is fairly predictable; under the
FERS LEO provisions, the benefit formula provides 1 percent of final
average pay for each year of additional service after 20 years. The effect
on Social Security benefits would be relatively small, but could vary
somewhat depending on whether USCP officers continued to work in




51
  The pension cost reduction, which would be spread across the FERS LEO population,
would be approximately $1.1 million in the first year of the projection. In addition, the
government would realize an additional $9 million in savings over the projection period
because when employees retire later than originally anticipated, there is a decrease in the
costs that had already been attributed to past service. Under the terms of the funding
provisions for FERS, the U.S. Treasury realizes any increases or decreases in costs
attributable to past service, with the agencies responsible for costs attributable to current
and future service.
52
  One percent of the USCP’s 2011 payroll of approximately $141 million is about $1.4
million–although any increase in overall payroll due to later retirements does not happen
immediately. This reflects the point that if USCP officers are hired at similar ages as in the
past, but now work to a later age, the effect could be an increase in the overall USCP
payroll. The overall workforce would have higher average years of past service. Even if
the grade structure is the same, within-grade pay increases with service could cause this
effect.




Page 41                                                             GAO-12-58 Capitol Police
Social Security covered employment after retiring from USCP. 53 Retiring
later has the greatest effect on the TSP component of retirement income
for those who contribute to TSP. USCP officers would increase the
number of years they make TSP contributions, receive the agency match
and earn investment returns and reduce the number of years that they
would draw down their TSP accounts in retirement. Still the size of that
effect depends on the level of lifetime TSP contributions. As shown in
figure 15, taking all three FERS components into account, retiring at age
60 instead of 57 would increase total replacement rates by as little at
4 percentage points for workers making no TSP contributions and by as
much as 10 percentage points for workers contributing 10 percent of pay
to TSP. 54




53
  We examined the effect for the worker hired at age 22 because the Social Security
benefit is based on 35 years of covered earnings, and only that worker among our three
cases has a full 35 years of earnings with USCP. We did not have a basis for supposing
what earnings before or after USCP service might be. According to our estimates, for that
worker, the Social Security benefit would increase by almost $400 annually, or about 2
percent, as a result of having these 3 additional years of earnings.
54
  For our examples, we use contribution levels that are a constant percentage of pay over
the entire career, including 0, 5, and 10 percent employee contribution rates. Such a
contribution pattern would not include any catch-up contributions, which employees may
make at ages 50 and over.




Page 42                                                          GAO-12-58 Capitol Police
Figure 15: Effect on Replacement Rates of Retiring at Age 60 Instead of Age 57




                                         Page 43                                 GAO-12-58 Capitol Police
                     Note: Numbers may not add due to rounding. Replacement rates here are the percentage of the final
                     year’s salary that retirement income replaces. Values for TSP are the additional replacement rates
                     from the TSP annuities for each level of contribution and reflect employer contributions. Replacement
                     rates from the TSP annuity alone when workers make no contributions (but receive the automatic
                     agency 1 percent contribution) range about 1 to 2 percent depending on the age at hire and age of
                     retirement. For these illustrations, we used an inflation-adjusted rate of return on TSP account
                     balances of 2 percent. These examples show officers hired as trainees and progressing through the
                     grades and steps of the pay scale based on time in grade. We focus on grade 3 officers because in
                     2010, over 80 percent of all officers were grade 3 or on their way to grade 3. The replacement rates
                     for Social Security used in this chart are for the officer hired at age 22; for illustrative purposes only,
                     doing so assumes all cases have the same Social Security earnings histories whether from USCP
                     employment or elsewhere. Before age 62, retired officers would not be eligible for Social Security, but
                     may receive a supplement that takes its place, which would generally be somewhat smaller. For
                     additional information regarding the graphic shown, only 2 percent of officers were hired at age 37 or
                     older, and 40 percent of officers were hired between age 25 and 30. Hence, 27 was the approximate
                     midpoint of this particular age range and represents the typical age officers are hired.


                     Moreover, taking all three FERS components into account, employee
                     TSP contribution levels over the course of a career can make more of a
                     difference to retirement income than 3 additional years of service. In the
                     case of workers hired at age 22 and contributing a constant 5 percent of
                     wages to TSP, retiring at age 60 instead of 57 increases total
                     replacement rates by 8 percentage points from 83 percent to 91 percent.
                     In contrast, increasing the employee contribution rate from 0 to 5 percent
                     over the entire career would increase replacement rates by 14
                     percentage points if retiring at age 57.


                     We provided a draft of this report for review and comment to USCP and
Agency Comments      the nine other federal police forces included in this review; the USCP
and Our Evaluation   Labor Committee; and OPM. USCP and four other federal police forces—
                     Secret Service Uniformed Division, Pentagon Police, FBI Police, and
                     Postal Security Force—did not provide written comments to be included
                     in this report, but provided technical comments, which we incorporated as
                     appropriate. In emails received January 3 and 4, 2012, HHS and DOI
                     liaisons, respectively, stated that their departments, including NIH Police
                     and Park Police, had no comments on the report. In an email received
                     January 9, 2012, the DHS liaison confirmed that the FEMA Police had no
                     comments on the report. In emails received January 10, 2012, the BEP
                     Police and Supreme Court Police liaisons stated their agencies had no
                     comments on the report. We received comment letters from DHS, OPM,
                     and the USCP Labor Committee, which are reproduced in appendices II,
                     III, and IV, respectively.

                     In commenting on this report, DHS stated that it was pleased with GAO’s
                     recognition of its efforts to develop, implement, and deploy human capital




                     Page 44                                                                       GAO-12-58 Capitol Police
flexibilities. DHS also noted that the report does not contain any
recommendations for DHS.

In its letter, OPM made several comments regarding one of the proposals
that we analyzed in the report—the proposed increase in the mandatory
retirement age. OPM stated that the cost savings actually realized by
USCP from raising the mandatory retirement age for USCP personnel
would be small because the estimated reductions in annual pension costs
would be spread across all LEO-employing agencies under the cost
allocation methodology used for FERS. We revised our report to clarify
this point. OPM also states that increasing the mandatory retirement age
is unnecessary since LEO retirement benefits provide a higher annuity
rate in order to make early retirement at age 57 economically feasible and
inconsistent with other retirement provisions that provide enhanced
accrual rates for USCP in comparison to other, non-LEO federal
employees. We are not taking a position on whether or not to raise the
mandatory retirement age for USCP personnel in this report. Rather, the
report provides information on some of the possible effects of doing so,
namely that it could increase retirement security at a minimal cost. This
report also shows that, generally, the effect of greater employee
participation in TSP can provide a larger boost in post-retirement income
than the effect of working 3 additional years on the defined benefit portion
of retirement income. Finally, we recognize there are many other factors
to take under consideration when making such policy decisions, including
workforce planning needs; retirement trends across other agencies,
industries and occupations; and broader workforce trends in employee
health and longevity. OPM also provided technical comments, which we
incorporated as appropriate.

In its letter, the USCP Labor Committee stated that, even though our
report indicates that child care is available to USCP officers, to its
knowledge, USCP does not have a child care program. It is the case that
USCP, itself, does not offer a child care program; however, according to
USCP officials, USCP police officers have access to child care through
the House and Senate Child Care Centers. We revised our report to
clarify this point. The letter also provided commentary on several of their
proposals that extended beyond the scope of our review.


We are sending copies of this report to the appropriate congressional
committees. We are also sending copies to USCP; the nine other federal
police forces included in this review; the USCP Labor Committee; and



Page 45                                                GAO-12-58 Capitol Police
OPM. In addition, this report will be available at no charge on the GAO
Web site at http://www.gao.gov.

If you or your staff have any questions about this report, please contact
Eileen Larence at 202-512-8777 or by e-mail at LarenceE@gao.gov or
Charles Jeszeck at 202-512-7215 or by e-mail at JeszeckC@gao.gov.
Contact points for our Offices of Congressional Relations and Public
Affairs may be found on the last page of this report. Key contributors to
this report are listed in appendix V.




Eileen R. Larence
Director, Homeland Security and Justice Issues




Charles Jeszeck
Director, Education, Workforce, and Income Security




Page 46                                                GAO-12-58 Capitol Police
Appendix I: Objectives, Scope and
              Appendix I: Objectives, Scope and
              Methodology



Methodology

              To understand how the United States Capitol Police (USCP) compares to
              other federal police forces with regard to retirement benefits,
              compensation, duties, employment requirements, attrition, human capital
              flexibilities, and costs associated with the proposed benefit
              enhancements, we addressed the following questions:

              (1) How does the USCP compare to other federal police forces in the
              Washington, D.C. metropolitan area with respect to retirement benefits,
              minimum entry-level salary, duties, and employment requirements? 1

              (2) How does attrition at USCP compare to other federal police forces,
              and how if at all, have USCP and other federal police forces used human
              capital tools to recruit and retain qualified officers?

              (3) What level of retirement income do current USCP benefits provide and
              what costs are associated with the proposed benefit enhancements?

              For the first and second objectives, we identified other federal police
              forces that were potentially comparable to USCP based on (1) prior work
              on federal uniformed police forces, (2) inclusion in the Office of Personnel
              Management’s (OPM) occupational series for police officers (0083), and
              (3) the number of officers located in the Washington, D.C. metropolitan
              area or who receive Washington, D.C. locality pay. 2 Based on this
              information, we selected nine federal police forces whose officers are part
              of, or functionally equivalent to, the 0083 occupational series and who
              have at least 50 officers who are located in the Washington, D.C.
              metropolitan area or receive Washington, D.C. locality pay, as listed in




              1
                We determined how USCP compares to other federal police forces with respect to
              minimum entry-level salary. However, for our review, we did not determine how the police
              forces compared with respect to other aspects of compensation, such as maximum salary.
              2
                GAO, Federal Uniformed Police: Selected Data on Pay, Recruitment, and Retention at
              13 Police Forces in the Washington, D.C. Metropolitan Area. GAO-03-658 (Washington,
              D.C.: June 13, 2003). For the purpose of this report, we also used OPM’s Central
              Personnel Data File (CPDF)—a database that contains personnel information primarily on
              executive branch agencies—to determine which officers in the selected federal police
              forces received Washington, D.C. locality pay. These officers’ duty stations could be
              located in Washington, D.C., as well as Northern Virginia and parts of Maryland, West
              Virginia, and Pennsylvania.




              Page 47                                                         GAO-12-58 Capitol Police
                                        Appendix I: Objectives, Scope and
                                        Methodology




                                        table 5. 3 According to USCP, its police officers are functionally equivalent
                                        to OPM’s 0083 occupational series—or police series—for which an
                                        individual’s primary duties involve the performance or supervision of law
                                        enforcement work in the preservation of the peace; the prevention,
                                        detection, and investigation of crimes; the arrest or apprehension of
                                        violators; and the provision of assistance to citizens in emergency
                                        situations, including the protection of civil rights. Also, the primary duty
                                        station for the approximately 1,800 USCP officers is Washington, D.C.
                                        We excluded military police forces because our review is focused on
                                        civilian federal police forces which have a civilian retirement benefit
                                        system as opposed to a military retirement benefit system. We also
                                        excluded police forces for intelligence agencies because, unlike other
                                        executive branch police forces, they do not report their human capital
                                        data to Central Personnel Data File (CPDF).

Table 5: USCP and Comparable Federal Police Forces and Police Officers Located in the Washington, D.C. Metropolitan Area
or Who Received Washington, D.C., Locality Pay in Fiscal Year 2010a

                                                                                                   Total number of police officers
Department                           Federal police force                                            on-board in fiscal year 2010b
Legislative Branch
U.S. Capitol Police                  U.S. Capitol Police (USCP)                                                                1, 777
Judicial Branch
Supreme Court of the United States   Supreme Court Police                                                                        142
Executive Branch
Department of Defense                Pentagon Force Protection Agency Police (Pentagon                                           857
                                     Police)
Department of the Interior           United States Park Police (Park Police)                                                     464
Department of Homeland Security      Federal Emergency Management Agency Police (FEMA                                              76
                                     Police)
                                     United States Secret Service Uniformed Division (Secret                                   1,378
                                     Service Uniformed Division)
Department of Justice                Federal Bureau of Investigation Police (FBI Police)                                         141
Department of the Treasury           Bureau of Engraving and Printing Police (BEP Police)                                        125




                                        3
                                          We excluded the Veteran’s Health Administration (VA) Police because it reported that its
                                        individual police force independently and separately managed their human capital
                                        functions such as full time equivalent (FTE) determinations, hiring, and offering recruiting
                                        and retention flexibilities. As a result, each individual police force had less than 50 police
                                        officers in fiscal year 2010.




                                        Page 48                                                             GAO-12-58 Capitol Police
                                    Appendix I: Objectives, Scope and
                                    Methodology




                                                                                                                      Total number of police officers
Department                       Federal police force                                                                   on-board in fiscal year 2010b
Department of Health and Human   National Institutes of Health Police (NIH Police)                                                                84
Services
Government Corporation
U.S. Postal Service              U.S. Postal Service Security Force (Postal Security                                                              68
                                 Force)c
Total                                                                                                                                          5,112
                                    Source: GAO analysis of data provided by USCP and the 9 other federal police forces.
                                    a
                                     Sixteen federal police forces, excluding USCP, had 0083 police officers. Nine of these forces had 50
                                    or more police officers located in the Washington, D.C. metropolitan area or who received
                                    Washington, D.C. locality pay. The remaining seven federal police forces with 0083 officers that did
                                    not meet these criteria and, therefore, were not included in our review are forces with the Federal
                                    Protective Service, National Institutes of Science and Technology, Smithsonian Institute, U.S. Mint,
                                    Government Printing Office, Veterans Health Administration, and the Internal Revenue Service.
                                    b
                                     Whenever possible, we verified police officers’ on-board numbers with the CPDF data for fiscal year
                                    2010.
                                    c
                                     Postal Security Force officials stated that even though their officers have not been subject to OPM
                                    classification; they do not believe that their officers are equivalent to 0083 police officer but, instead,
                                    they believe their officers are equivalent to 0085 federal security guards. However, we believe that
                                    Postal Security Force is comparable to USCP for the purpose of our review because (1) it reported
                                    having the same primary types of statutory law enforcement authorities as those reported by USCP,
                                    such as conducting criminal investigations, executing search warrants, making arrests, carrying
                                    firearms, and protecting people and property; (2) it was included in our prior work on federal
                                    uniformed police forces; and (3) it has more than 50 police officers located in the Washington, D.C.
                                    metropolitan area.


                                    To compare the USCP to other federal police forces located in the
                                    Washington, D.C. metropolitan area or who receive Washington, D.C.
                                    locality pay with respect to (1) retirement benefits, minimum entry-level
                                    salary, duties, and employment requirements and (2) attrition and use of
                                    human capital flexibilities to recruit and retain qualified officers, we
                                    interviewed human resources officials, senior police officers, and
                                    executive officials and reviewed documents provided by the 10 police
                                    forces. For example, to identify similarities and differences among USCP
                                    and the other federal police forces, we obtained and reviewed
                                    documentation on minimum entry-level salary, grade, and step; job
                                    announcements and job descriptions; and legal authorities for police
                                    functions. We also interviewed human resources officials at OPM to
                                    obtain information on retirement benefits and pay, and we reviewed
                                    relevant personnel laws, regulations, and reports by OPM.

                                    We also developed and administered a survey to collect consistent,
                                    detailed human capital information from fiscal year 2005 through fiscal
                                    year 2010 from each of the police forces in our review. The survey
                                    included questions about (1) retirement benefits and minimum entry-level
                                    officer salary, types of duties, and employment requirements for entry-



                                    Page 49                                                                                   GAO-12-58 Capitol Police
Appendix I: Objectives, Scope and
Methodology




level applicants; (2) number of officers on-board, hired, and separated,
and reasons why officers left or stayed, and difficulties in recruiting or
retaining officers; and (3) the availability and use of human capital
flexibilities to recruit and retain officers. To develop the survey questions,
we reviewed federal statutes, regulations, OPM and CBO reports, and our
related reports to identify issues pertaining to federal police pay, benefits,
and human capital flexibilities. Furthermore, on the basis of interviews
with police forces officials, we identified issues related to human capital
issues. Finally, we examined related surveys administered to many of
these agencies to identify relevant issues pertaining to federal police
forces pay, benefits, and human capital flexibilities.

The survey was pretested with potential respondents from USCP, BEP
Police, and FBI Police to ensure that (1) the questions were clear and
unambiguous; (2) the terms we used were precise; (3) the survey did not
place an undue burden on the officials completing it; and (4) the survey
was independent and unbiased. In addition, the survey was reviewed by
an independent, internal survey expert. The survey was conducted using
self-administered questionnaires that were disseminated by email. To
encourage respondents to complete the survey, we sent an e-mail
reminder to each nonrespondent about 2 weeks after our initial e-mail
message. The survey data were collected from June 2011 through
August 2011. We received responses from all 10 agencies, for a
response rate of 100 percent.

All data from the returned surveys were double key-entered into an
electronic file in batches (that is, the entries were 100 percent verified),
and a random sample of each batch was selected for further verification
for completeness and accuracy. To eliminate data-processing errors, we
independently verified the computer program that generated the survey
results. We reviewed survey responses for completeness and accuracy
and followed-up on any missing or unclear responses with appropriate
officials. We analyzed the police forces’ survey responses to compare
and contrast information about the police forces’ retirement benefits,
salaries, duties, employment requirements, attrition, and human capital
flexibilities, among other things.

We used OPM’s CPDF to obtain the number of on-board police officers
and separations each fiscal year from 2005 through 2010 for those police
forces that report to the CPDF and used this information to determine the
level of attrition among officers at police forces that report to CPDF; and
for forces that do not report to CPDF—USCP, Supreme Court Police, and
Postal Security Force—we used fiscal year 2005 through 2010 separation


Page 50                                                 GAO-12-58 Capitol Police
Appendix I: Objectives, Scope and
Methodology




data obtained directly from them. 4 We chose this time frame in order to
obtain the most recent data available for a full fiscal year. We also used
CPDF data to corroborate some survey responses, where possible. We
assessed the reliability of the data the police forces provided in the survey
by reviewing agency responses to questions about the data sources and
how the results were generated. We determined that the data were
sufficiently reliable for our purposes. Lastly, we reviewed our prior reports
that identified retirement benefits, salary, and duties for the federal police
forces in our review. We do not make an independent assessment about
whether retirement benefits and salaries for these officers are
commensurate with their duties and employment requirements.

To address our third objective, we examined the USCP Labor
Committee’s proposed benefit changes, discussed them with Labor
Committee representatives and OPM officials; and reviewed relevant
federal laws, regulations, and literature. To examine whether other federal
agencies had estimated the costs of these or similar proposals, we
reviewed the Congressional Budget Office’s (CBO) cost estimates
developed for comparable benefit provisions to the three federal police
forces most similar to USCP. In addition, we interviewed OPM officials
about the viability of the proposals. We then reviewed each proposal and
analyzed its potential effect on costs to USCP and increased retirement
benefits for USCP officers. As a result, we identified one proposal—the
proposal for the USCP Board to exercise its current authority by allowing
officers to remain on the job until age 60 rather than retire at 57, as
mandated—for additional analysis that both minimally affected agency
costs and improved retirement benefits, and we conducted additional
analysis for that proposal.

To determine the costs to the federal government and officers of this
proposed change to the USCP benefit structure, we obtained information
from the USCP regarding officer retirement trends and demographic data.
We conferred with OPM’s actuarial staff regarding similar information and
data related to the entire LEO population. OPM calculated the cost impact


4
  For this report, we calculated attrition by dividing the number of officers who separated
from the police force during a particular fiscal year by the number of officers onboard at
the end of that fiscal year. We considered calculating attrition by dividing the number of
officers who separated by the average number of officers onboard at the beginning and
end of the fiscal year. However, since the differences in the results of the two calculation
methods were minimal, we decided to use end of fiscal year onboard numbers for
computational simplicity.




Page 51                                                             GAO-12-58 Capitol Police
Appendix I: Objectives, Scope and
Methodology




of allowing later USCP retirement using the Aggregate Entry Age Normal
actuarial cost method. 5 Such cost estimates are based on an assumption
as to the proportion of employees who retire at each age. OPM has a
current set of retirement rates that based on expected retirement behavior
under current USCP retirement rules. To estimate the effect of allowing
retirement up to 3 years later, an assumption had to be made as to how
such a change would influence retirement behavior by USCP officers. In
consultation with OPM, we agreed that a reasonable assumption for the
effect of the change on retirement behavior would be the following
adjustments to the retirement rates currently assumed in the valuation of
the plan: 1) The current assumed retirement rate for age 55 was assumed
to extend to ages 56, 57, and 58 as well; 2) the current assumed
retirement rates at ages 56 and 57 would be shifted 3 years to apply at
ages 59 and 60. We also assumed no shift in hiring ages, with the result
that, with later retirement, employees would have an increase in total
years of service. Other assumptions were the same as OPM used in the
most recent valuation of the plan.

With these changes in assumptions, OPM could estimate the effect on
cost.

In terms of changes in payroll cost because of later retirements, OPM
currently assumes

(1) an annual 3.75 percent across-the-board salary increase and

(2) an annual merit assumption specific to LEOs of 0.49 percent (for
LEOs age 55 and older with 20 years of service).

OPM could keep these assumptions constant unless there is evidence
that they are not operative in the unique context of USCP. In the absence
of such evidence, we held everything else constant; for example, we did
not anticipate any pay increases in the final 3 years of service that would
bump up high-3 average pay (on which the FERS benefit is calculated),



5
 Because pension benefits are paid after retirement but their costs are accrued and
should be funded in advance of that (during the working years) and there is no single way
to assign post-retirement costs to particular years of pre-retirement service, an actuarial
cost method is selected for this purpose. For FERS and CSRS, the method used to assign
post-retirement costs to pre-retirement service is known as the aggregate age entry
normal method, which assigns costs as a level percentage of pay over all service.




Page 52                                                           GAO-12-58 Capitol Police
                             Appendix I: Objectives, Scope and
                             Methodology




                             nor any promotional opportunities within USCP that would become
                             available as a result of additional years of service.

                             OPM calculated the estimated effects of the later assumed retirement on
                             both normal cost and accrued liability. Normal cost is the cost of benefits
                             attributable to current service, and is the responsibility of USCP. Accrued
                             liability is the cost of benefits attributable to past service; increases or
                             decreases to it are borne by the federal government. Later assumed
                             retirement has an impact on both normal cost and accrued liability.

                             Finally, we examined the prospects for retirement income under current
                             provisions and the effects on retirement income of retiring at age 60
                             instead of the current mandatory retirement age of 57. Based on
                             retirement, work history, and demographic data we obtained from USCP,
                             we developed illustrative examples of workers hired at three different
                             ages who progressed along a standard career path. Using a variety of
                             assumptions, we calculated amounts for retiring at both age 57 and age
                             60 for the FERS defined benefit annuity, Social Security benefit, and
                             expected retirement income from the federal Thrift Savings Plan (TSP).
                             We examined outcomes for three different TSP contribution levels. We
                             have focused our reporting of results on replacement rates rather than
                             dollar estimates. 6


Definition of Illustrative   Salary history and grade level: We assume for all of our cases that the
Worker Profiles              employee enters as a trainee and goes through the standard career
                             progression through a grade 3, but not beyond. Over two-thirds of the



                             6
                               Under FERS, workers who make no contributions to TSP nonetheless get an employer
                             contribution equal to 1 percent of pay. Workers who contribute 5 percent or more get a 5
                             percent employer contribution, which is the maximum employer contribution. For these
                             examples, we assumed workers invested all their TSP balances in the G Fund earning a
                             constant inflation-adjusted 2 percent return. To show the effect of TSP as a stream of
                             lifetime annual payments, we further assumed that workers used their entire TSP balance
                             at retirement to purchase a single-life annuity from TSP (with no cash refund or 10-year
                             certain option). The size of such annuities is very sensitive to the prevailing interest rate
                             used in the annuity calculation, with higher interest rates yielding higher annuity payments.
                             To provide conservative estimates, we used nominal interest rates of 3 percent. To
                             compute our replacement rates, we took the sum of the FERS basic benefit, Social
                             Security retired worker benefit, and the TSP annuity and divided by the salary in the last
                             year before retirement. Before age 62, retired officers would not be eligible for a Social
                             Security retired worker benefit but may receive a supplement that takes its place, which
                             would generally be somewhat smaller.




                             Page 53                                                            GAO-12-58 Capitol Police
Appendix I: Objectives, Scope and
Methodology




USCP sworn workforce in 2010 was grade 3, and another 13 percent
were grade 2, which is on a career ladder to grade 3. Less than 20
percent were higher than grade 3. Moreover, by focusing on grade 3, we
focus on those workers at the lowest pay level at retirement. Those
attaining higher grades would generally have higher retirement incomes,
all else equal. USCP has provided information on the standard career
progression and salary table. According to USCP, progression through
grades and steps is usually just a function of time in grade. So our salary
progression is based on that pattern. Also, our earnings histories and
therefore also our replacement rates do not reflect any overtime or other
special pay.

Age at hire: We look at three ages at which officers are hired, 22, 27, and
37. Age 22 allows for a 35 year career with retirement at age 57, which
facilitates getting an estimate for Social Security benefits based solely on
USCP earnings years. Age 27 is the average age at which the officers on
the force in 2010 were hired. Age 37 illustrates a case where an officer
has 20 years of service when reaching the current mandatory retirement
age. 7

TSP contribution rate: To provide bracketing cases, we show cases with
constant 0 and 10 percent employee contribution rates, along with the
relevant employer match. We also show a case with a constant 5 percent
employee contribution to illustrate taking advantage of the maximum
employer match. We assume there is no leakage from TSP accounts,
such as loans that are not repaid. We assume no “catch-up”
contributions. 8

Retirement benefits: Because any policy change would only affect the
three parts of FERS, we only illustrated effects on benefits under FERS.
In developing our replacement rate estimates, we estimated the annual
dollar value of the FERS basic annuity and Social Security benefits.
Workers have a variety of options for how to draw on their TSP accounts
for retirement, but for this illustration, we translated that into an annual



7
 An officer may work beyond age 57 without an exemption if he or she has not yet
completed the required 20 years of LEO service. However, the officer must be separated
on the last day of the month in which he or she completes 20 years of service.
8
Catch-up contributions are payroll deductions that participants who are age 50 or older
may be eligible to make in addition to regular employee contributions.




Page 54                                                          GAO-12-58 Capitol Police
                         Appendix I: Objectives, Scope and
                         Methodology




                         benefit. One way to do this was to assume they purchase a TSP annuity
                         at retirement. We looked only at self-only FERS and TSP annuities
                         because we had no basis for any assumption about spouses or their
                         ages. We calculated a Social Security benefit only for the case hired at
                         age 22 since we had no basis for speculating what the earnings history
                         outside of USCP would look like and Social Security benefits are based
                         on 35 years of earnings. We used the Social Security benefit only to
                         illustrate what that total retirement package looked like for such a case.
                         When we showed Social Security benefit estimates for those hired at
                         other ages for illustrative purposes, we assumed their Social Security
                         earnings records would be identical to those of a worker hired by USCP
                         at age 22.


Parametric assumptions   Inflation rate: We calculated all our dollar estimates in 2010 dollars. For
                         all worker salary histories, we used the 2010 pay scale. That is, for
                         simplicity, we assumed that all past and future comparability increases
                         equal the rate of inflation. To the extent that comparability increases
                         reflect wage growth and not just price growth, our illustration did not
                         capture the effect of that difference.

                         TSP rate of return: Assumptions for the TSP rate of return needed to be
                         consistent with our approach for the earning histories and inflation.
                         Assuming all funds are invested in the G-Fund both provides a minimum
                         expected benefit level and implicitly adjusts for the risk of other
                         investment allocations. As a proxy, we used the Social Security Trustees’
                         long-term intermediate assumption for the real return on special-issue
                         Treasury securities, which is 2.9 percent. Social Security’s special-issue
                         Treasury securities are essentially the same as the G-Fund securities.
                         However, that long-term assumption also reflects the long-term
                         assumption for the real-wage differential, which is the difference between
                         the growth of wages and that of prices. Since we use the 2010 pay scale
                         for all years and implicitly assume there is no real-wage differential, we
                         reduced our rate of return assumption by the long-term Trustees’
                         intermediate assumption for the real-wage differential, which is roughly
                         1.2 percent. That results in a TSP return assumption of 1.7 percent, but
                         we round to 2 percent since the results from our approach would not
                         reflect such a level of precision.

                         TSP annuitization rate: Given our other assumptions, the TSP balances
                         we projected are expressed in 2010 dollars, and we wanted to calculate
                         an annuity payment purchased from those balances that is constant going
                         forward in inflation-adjusted terms. We used an annuity factor for a single-


                         Page 55                                                 GAO-12-58 Capitol Police
Appendix I: Objectives, Scope and
Methodology




life (self-only) annuity (no 10-year certain option). To provide for an
inflation-adjusted retirement benefit estimate, we used an annuity factor
for the increasing TSP annuity option, and thus assumed that future
inflation would match that implied by the increasing annuity. We adapted
TSP’s annuity calculation worksheets to arrive at an annuity factor that is
expressed as the percent of the TSP balance that is paid annually. The
interest rate used to calculate the annuity factor is a critical assumption.
First, we used a nominal interest rate to convert the TSP balance in 2010
dollars to an annuity expressed in 2010 dollars. However, nominal rates
have fluctuated dramatically, and the nominal rate at which an annuity is
purchased can have a large effect on the annuity payment. The Social
Security Trustees’ intermediate assumption for the long-term nominal
interest rate on special public debt obligations is 5.7 percent. However,
the rates TSP used for annuity calculations in August and September
2011 average 3 percent, which are at historically low levels. In order to
make our illustrative examples conservative, that is, toward the lower end
of what they might be, we used 3 percent for our nominal annuity interest
rate assumption. This results in annual annuity factors of 3.71 and 4.19
percent respectively for age 57 and age 60. 9

We conducted this performance audit from January 2011 through January
2012 in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit to
obtain sufficient, appropriate evidence to provide a reasonable basis for
our analysis based on our audit objectives. We believe that the evidence
obtained provides a reasonable basis for our analysis based on our audit
objectives.




9
 These annuity factors are multiplied by the account balance to determine the annual
annuity benefit.




Page 56                                                          GAO-12-58 Capitol Police
Appendix II: Comments from the Department
             Appendix II: Comments from the Department
             of Homeland Security



of Homeland Security




             Page 57                                     GAO-12-58 Capitol Police
Appendix III: Comments from the Office of
                              Appendix III: Comments from the Office of
                              Personnel Management



Personnel Management

Note: Page numbers in
the draft report may differ
from those in this report.




                              Page 58                                     GAO-12-58 Capitol Police
Appendix III: Comments from the Office of
Personnel Management




Page 59                                     GAO-12-58 Capitol Police
Appendix III: Comments from the Office of
Personnel Management




Page 60                                     GAO-12-58 Capitol Police
Appendix IV: Comments from the United
             Appendix IV: Comments from the United
             States Capitol Police Labor Committee



States Capitol Police Labor Committee




             Page 61                                 GAO-12-58 Capitol Police
Appendix IV: Comments from the United
States Capitol Police Labor Committee




Page 62                                 GAO-12-58 Capitol Police
Appendix IV: Comments from the United
States Capitol Police Labor Committee




Page 63                                 GAO-12-58 Capitol Police
Appendix V: GAO Contact and
                  Appendix V: GAO Contact and
                  Acknowledgments



Acknowledgments

                  Eileen R. Larence, (202) 512-8777 or larencee@gao.gov
GAO Contact
                  Charles A. Jeszeck, (202) 512-7215 or jeszeckc@gao.gov


                  In addition to the contacts named above, Kristy Brown, Assistant Director,
Acknowledgments   Kim Granger, Assistant Director, Jonathan McMurray, Analyst-in-Charge,
                  and Su Jin Yon, Analyst-in-Charge, managed this assignment. James
                  Bennett, R.E. Canjar, Geoffrey Hamilton, Lara Miklozek, Christopher
                  Ross, Rebecca Shea, Ken Stockbridge, Roger Thomas, and Frank
                  Todisco made significant contributions to this report. Nicole Harkin, Jeff
                  Jensen, Susanna Kuebler, Sara Margraf, Amanda Miller, and Gregory
                  Wilmoth also provided valuable assistance.




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                  Page 64                                              GAO-12-58 Capitol Police
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