No, Andrew McCabe Is Not Losing His Pension, At Least Not Completely
The fact that Andrew McCabe was fired before he could retire means that he will lose out on some significant pension benefits, but. contrary to some media reporting, he won't lose his pension completely.
Much is being made about the late Friday night firing of former F.B.I. Deputy Director Andrew McCabe, who was summarily dismissed by Attorney General Jeff Sessions after months of being directly attacked by the President of the United States and, indeed, there is much about the circumstances that led to his dismissal that is questionable at best. However, there is one point that has been repeated throughout the media and elsewhere that has been used to make it seem as though McCabe is being unjustly punished because, by firing him before his retirement became effective today, Sessions guaranteed that he would not receive his pension. One Democratic Member of Congress has even offered to hire McCabe for a day or two so that he would get the number of days of Federal service that he needs to get his pension. As Elizabeth Bauer notes at Forbes, though, the claim that McCabe is losing his pension is not entirely true:
Pensions — public as well as private — are required to meet certain vesting requirements, and, in fact, the FERS (Federal Employees Retirement System) benefits vest at 5 years, meaning that benefit accruals cannot be taken away.
In fact, McCabe is all of 49 years old, likely 50 by the time readers see this, and what he lost out on was, as CNN much more calmly recounts, the ability to take his benefits at age 50, rather than somewhere between age 57 and age 62, and he lost his eligibility to a special top-up in benefit formula. These are, admittedly, tangible financial losses, but it is grossly misleading that various news outlets are giving the general public the impression that he has lost his pension entirely.
But the existence of these special perks, benefits that we in the private sector can barely comprehend in the year 2018, points to a fundamental disconnect between the private and public sector. Why shouldn’t someone whose benefits consist of 401(k) account accruals believe that government pensions work so differently as to punish someone arbitrarily by removing their benefits? Add to this the fact that retirement at age 50 is well-nigh incomprehensible for the average working American, except perhaps in the case of high-risk, health-sapping occupations, which surely likewise added to the impression that actual pensions, rather than generous ancillary provisions, were being lost.
Yes, the rationale for these generous pension benefits is that these civil servants accept significantly lower salaries than they would be able to earn in the private sector. But this exchange of “low salaries now, rich retirement benefits later” is a matter of “robbing Peter to pay Paul” that isn’t wise in the long term, either.4
To be fair, not everyone in the media was characterizing McCabe’s fate as one where Sessions decision means that McCabe would never get the pension that he would otherwise be legally entitled to. In a report that was posted before McCabe was dismissed, CNN reported the story more accurately:
As a law enforcement officer covered by the Federal Employees Retirement System, known as FERS, McCabe is set to receive an annual pension payout calculated at a special “enhanced” rate and available at the early age of 50.
“He put his life on the line,” said Kimberly Berry, a federal employment lawyer in Virginia. “The enhanced coverage is enhanced, because by its nature, it’s more rigorous: the career he had.”
Considering McCabe’s number of years at the agency and estimations of his high-level pay grade, formulas published by the US Office of Personnel Management for law enforcement officers show that his yearly payout could hit in the area of $60,000 each year, if McCabe were to retire after his birthday on Sunday.
If he were to be fired before Sunday, it appears likely McCabe could be docked his pension until he hits another, later age milestone.
Experts disagree — and caution that predicting payouts is complicated given the complex federal system and each individual’s personal career particularities — but, per federal rules, McCabe may not be able to draw an annuity until a date ranging just shy of his 57th birthday, and as late as his 62nd. That could put the value of his uncollected pension in the realm of a half-million dollars.
On top of that, McCabe could also lose his law enforcement boost.
“What he would lose — and this is a lot of money — he would lose the enhanced benefits that law enforcement officers get,” said George Chuzi, an attorney who represents federal employees.
Under the rules of FERS, that means he could be left with the standard multiplier of 1% on top of his years of service, down from the 1.7% enhanced rate for law enforcement.
To be fair to McCabe, of course, losing close to half a million dollars in pension benefits is no small thing. Additionally it may also be the case that being fired means that McCabe will lose out on medical insurance benefits for himself and his family, something that would require him to either obtain insurance coverage on the open market, seek new employment that includes insurance coverage, or rely on whatever coverage his wife may have through her employer. That being said, he will still be able to draw on a Federal pension of some kind at some point in the future — depending on who you listen to that would be either around the time he turns 57 or when he turns 62 — so it’s not entirely accurate to say that he is losing out on his pension. Finally, it seems likely that, much like former F.B.I. Director James Comey, McCabe will at some point be offered a book deal that could prove to be even more valuable than whatever pension he would have received had he been permitted to retire as planned.
To be fair, most of the print reporting on the circumstances of McCabe’s dismissal has made it clear that he wouldn’t be entirely cut off from access to his pension benefits, merely that he wouldn’t be eligible to take advantage of the quirk in the law that allows Federal law enforcement officials to retire as young as 50 years old and receive a pension that could last for another thirty years or more. As noted above, the report on CNN’s website also makes that clear. Unfortunately, much of the reporting I’ve seen on CNN and MSNBC regarding the circumstances of McCabe’s dismissal has made it seem as though firing him means he loses out entirely on any pension at all. This has also been true of the small amount of coverage regarding McCabe’s dismissal that I’ve seen on the broadcast network’s newscasts yesterday and this morning. While it is true that McCabe stands to lose a lot of money because of what seems for all the world like a vindictive decision prompted by pressure from the President of the United States, it would be helpful if the media were to be just a little more accurate in reporting what his dismissal actually means.
On a final note, there is a possibility that this issue is not over quite yet. McCabe could decide to pursue litigation or other legal avenues protesting the manner and circumstances of his dismissal. If that happens the primary remedy he would likely be seeking is a ruling that he would be entitled to his pension as if the dismissal had not taken place and he had been permitted to retire as planned. I’m no expert in Federal employment law, so I can’t really comment on what the merits of such a claim might be or what the odds of such a claim being successful might be. Nonetheless, such a lawsuit would be interesting because it could mean that we would learn a lot more about the circumstances that led to McCabe’s dismissal and what, if any, pressure the White House may have applied beyond the rants that the President had sent McCabe’s way via his Twitter feed.
I agree that we need to be clear about what was lost, and what wasn’t. And, as you noted, a lot of the coverage yesterday was fairly clear on this–that was losing part, not all.
Still: the fundamental fact is that the firing was at the doorstep of a very significant financial threshold, and one that no doubt substantially reshape McCabe’s life plans.
This was clearly a malicious move.
@Steven L. Taylor:
I don’t disagree that this was a malicious move, and probably one primarily motivated by the Russia investigation. Nonetheless, I do have to say that a good deal of the coverage I saw regarding this story in the non-print media was not clear on exactly what it is that McCabe is losing here. As I stated, it’s certainly not an insignificant amount of money but I do think it’s worthwhile to be clear and accurate and, in this case, that wasn’t entirely true of some of the rushed and breathless coverage I’ve seen since Friday night.
More on the special set of retirement benefits available to law enforcement and firefighters:
McCabe turns 50 today. So he’s losing something pretty significant if he doesn’t get restitution.
Even Benjamin Wittes is withholding judgment about whether this was a “malicious” firing or not. Paul Mirengoff summarizes:
Wittes’s essay: https://www.lawfareblog.com/what-we-know-and-dont-know-about-firing-andrew-mccabe
@Jim Tantillo: I noted that piece yesterday, in fact.
The piece rightly notes that we do not know whether some sanctions were warranted or not. It does note the highly unusual nature of the firing, however.
Media largely misrepresents McCabe firing and pension status to make Trump look mean and vindictive.
And never mind that, from what I’ve seen, the media has largely ignored or glossed over that his firing was recommended by two panels run by non-trump appointees.
@TM01: First, without a doubt there was a substantial cost to this firing to McCabe. Second, even if the allegations are true, there was no requirement to fire him less than two days from full retirement. Third, at least part of the reason that the firing seems vindictive is because the president immediately gloated about it on Twitter.
Let’s not forget these facts.
If he deserves punishment, so be it, but let the process run its full course. To fast track the punishment like this is highly suggestive of malicious intent.
Now, if we are dealing here with truly normal procedures and sanctions, then I will gladly retract my position and write a piece about how wrong I was. Was McCabe given an adequate chance to address the charges? (This seems unlikely, since the final report has not even been issued). Moreover, is the appropriate sanction for such a charge firing as quickly as possible? And, how much discretion in terms of timing did Sessions have? Could he have waited until Monday?
I think it is a bit telling that Doug chooses to quote this:
There’s a bit of “screw pensions” in Doug’s politics, and that comes through clear and loud here, as much as his desire to be precise about what McCabe is losing.
Also the notion of ”low salaries now, rich retirement benefits later” isn’t “robbing Peter to pay Paul” it’s robbing Peter to pay Peter later.
Trump tweeted back in December that it was unfair that in 90 days McCabe was going to be allowed to retire with his full pension. This was vindictive petty shitty behavior.
@Jim Tantillo: And “Even Ben Wittes” isn’t much of a disclaimer in this instance. I’m a big fan of Ben’s work but he’s famously unwilling to go beyond the known facts. As Conor Friedersdorf noted last May:
Ben, being Ben, took that as a compliment.
@Gustopher: Yes, and it’s not true, either. Civil service pensions have, generally speaking, been pretty lousy in recent decades; they’re essentially a decent 401(k) plan. They’re not pensions in the sense of the pre-1970s civil service at all. McCabe and other law enforcement types get, as noted in the quote in my earlier comment, very much more generous in recognition that 1) those jobs are much more dangerous and 2) we need to push them out much younger because they’re more physically demanding.
So how does one punish an employee who has retired then?
A small cut to his pension seems to me to be a fitting punishment. It was recommended he be fired. Twice. So why let him retire and avoid all repurcussions?
And McCabe seems to be worth about $11 million, so I’m really not going to be shedding any tears over this.
Here’s a question too:
Ignore the being fired the day before his retirement aspect:
Should McCabe have been fired based on the recommendations of the IG?
If the answer is Yes, then what’s the big deal over the timing? If his actions were serious enough to warrant firing, then fire him.
Would you have felt better if this had been done a month ago? If it had been done when he announced his retirement and went on “vacation?”
@Steven L. Taylor: Steven, sorry I missed your piece from yesterday!
@TM01: The main issues are twofold, if related. First, the President has been ranting in public about McCabe for months. That’s classic abuse of power. Second, this was all clearly rushed and then the Attorney General himself issued a public announcement of the dismissal at 10pm on a Friday night that just happened to be 26 hours before McCabe’s already-announced retirement was official. We don’t have enough information yet to know whether the dismissal was warranted. We have plenty to know that it’s incredibly irregular and motivated by political vengeance from the very top.
Take that sentence, and apply it to your own life. Do you want your former employer to be able to punish you for past performance issues?
No, you want to be done.
And even as you approach a significant financial event (stock vesting, perhaps, to put this into the post-pension world most of us live in) any performance issues should be pursued through the normal process, whatever that is defined as, not an expedited process that is brought along because your boss’s boss has a grudge against you and is demanding it.
Now, if regular process put his benefits at risk — in some form of escrow — until the regular process concluded, that would be fine. But that’s not the regular process here.
Finally, if McCabe has committed a crime, he should be indicted, tried and convicted.
Argh, I wish. I put in 4.4%. It’s based on year of hire. It hasn’t been 0.8 for years.
Wow, I think we’ve got a serious contender for Republican of the Decade.
Benjamin Wittes was on the TV machine just now condemning the timing of the firing and how it was done. But, as noted, without seeing the IG report no way to know if the underlying basis was as stated.
Calling Trump’s behavior anything but sadistic and vindictive is just apologist spin.
@Steven L. Taylor:
The statement from McCabe’s lawyer alleges no.
Agreed, Trump’s behavior was and is very inappropriate.
@Mikey: Yeah, the Govt Exec piece is from 2011. Turnover is slow so there is a long lag on changes impacting the majority of the Workforce. I put in whatever the max is they’ll match.
Breitbart is, of course, calling all these people political hacks who prove there’s bias against Trump.
But you know, at some point, Trump might provoke Critical Mass in enough Professional Republicans that they snatch his ass in a Bear Trap.
@TM01: We don’t know the answers to those questions–that is kind of the point. If we don’t know the answers, it suggests that a rushed process, done late on a Friday night, might not be kosher.
As as general proposition it stands to reason that any process that is done in the fashion this one was done in raised serious questions about that process. The only reason to rush such a situation is if there is a real, legal deadline to act (there wasn’t). As such, a reasonable inference is the decision was malicious.
@James Joyner: Consider the following The Atlantic, by Jurecic and Wittes, which is follow-on to their measured piece on McCabe: Is America on the Verge of a Constitutional Crisis?
So, if that is from a co-author who is prone to understatement, well…
I would feel better if I thought a) the process and due process had been followed, and b) if it had been done in a way that did not seem to fulfill the petty desires of the president.
@Steven L. Taylor: Yup. I read Lawfare sporadically but follow Ben on Twitter and listen to his weekly podcast (with Shane Harris, Susan Hennesey, and Tamara Cofman Wittes) Rational Security. He’s scrupulous almost to a fault in not going beyond what we absolutely know. I’m not quite that disciplined but get accused of not going far enough on occasion, too.
(And Ben and I are on the same wavelength on the “Constitutional crisis” question. We’re in as much danger as I can recall in the post-Watergate era. And there we had a President who was, at heart, a patriot and Republican Congressional minority that put both country and institutional prerogatives above party.)
@Steven L. Taylor:
And herein lies one of the major problems with Trump’s conduct: even if the IG and OPR processes are entirely above reproach in McCabe’s case, Trump’s repeated statements about McCabe still create the appearance of undue pressure and interference. Trump has essentially spoiled the entire process because he can’t not be petty and vindictive.
Honestly, even with as much trust as I place in the IG and FBI’s OPR, I can’t believe such statements by a sitting President had no impact. In a case like this, where a determination of lack of candor can come down to interpretations of statements, pressure from the highest office must certainly influence the judgment of those involved, even if unconsciously.
Who knew that patriots were people who prolonged wars for political gain…
@Steven L. Taylor:
Are you sure that using a reference related to Jewish dietary laws is a good approach when talking to TM01?
Sitting in front of keyboard, trying to clear my mind to compose a reasoned and rational response. Trying and trying. Failing completely.
This is political interference in federal law enforcement. Naked, ugly, vindictive politics. In full view. Obvious like the Russian ‘wet’ work in Britain in the last few weeks. A way of saying: Yeah I did it, so what?
And the DOJ did exactly as the President wanted them to do exactly on his timetable.
And they call it a triumph for democracy.
It is authoritarianism slipping it’s nasty nose under the wall of the tent. And it’s being welcomed in by the Republican party.
And I cannot deal with this cooly and rationally. It’s horrible and everyone who loves liberty should have their hair on fire.
This is a sadistic bully acting on his inclination to do whatever makes him feel good.
The authoritarian nose has already been in the tent for a long time, this is just the opportunity for some authoritarian acting out.
But it only became Former Employer after he was fired.
After seriously breaking company rules, would you expect to be fired or not?
Only the elite expect to not suffer consequences for their actions.
Before the process was complete without adequate opportunity to present a defense.
You can’t pretend like this was a completed process (and your certainty requires a complete process).