Bill Overview
Title: CONTRACT Act of 2021
Description: 2021 This bill exempts certain air traffic controllers from a required reduction in their retirement annuity payment on account of earnings from certain work performed while entitled to such annuity. Under current law, retired Federal Aviation Administration air traffic controllers receive an annuity payment during the period between the mandatory retirement age of 56 and the Social Security minimum age of 62. Such annuity payment is required to be reduced by a certain percentage of any excess earnings during this period. The bill exempts from such reduction in annuity payments an air traffic controller who participates in the Air Traffic Control Contract Program (a public-private partnership for air traffic control services) following mandatory retirement.
Sponsors: Sen. Inhofe, James M. [R-OK]
Target Audience
Population: Retired air traffic controllers participating in the ATC Contract Program worldwide
Estimated Size: 5000
- The bill specifically targets retired Federal Aviation Administration air traffic controllers.
- There are approximately 14,000 air traffic controllers in the U.S. in total, as per FAA data.
- Many controllers work at contract towers, which are part of the target of this bill.
- Controllers retire mandatorily at age 56, before many other professionals, giving a specific group a unique employment-retirement transition often not present in other careers.
- Exact numbers of how many participate in the Air Traffic Control Contract Program post-retirement aren't public, but it's a subset of retirees in contract tower work.
Reasoning
- The bill mainly benefits a specific group—retired air traffic controllers participating in the Air Traffic Control Contract Program. They are a subset of the 14,000 total air traffic controllers in the U.S.
- Assuming a conservative estimate, a few thousand out of the total controllers might find post-retirement employment in the contract towers and therefore could be impacted by this policy.
- Given the high-stress nature of air traffic control work and the relatively early mandatory retirement, the policy is designed to alleviate financial pressure without deterring individuals from hiring retiree expertise in contract towers.
- We are considering the Cantril wellbeing scores to assess the subjective wellbeing benefits post-retirement for this affected group and how the policy might buffer financial stress impacts.
Simulated Interviews
Retired Air Traffic Controller (Houston, Texas)
Age: 58 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 6.0 years
Commonness: 10/20
Statement of Opinion:
- This policy would allow me to work without worrying about losing annuity benefits due to excessive earnings.
- I think it stabilizes our financial situation post-retirement, especially before Social Security kicks in.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 7 | 5 |
Retired Air Traffic Controller (Denver, Colorado)
Age: 60 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 2.0 years
Commonness: 7/20
Statement of Opinion:
- This policy relieves the financial burden of working post-retirement as I can earn without worrying about penalties.
- More retired controllers may choose to share their expertise without financial drawbacks.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 4 |
| Year 10 | 6 | 4 |
| Year 20 | 5 | 3 |
Retired Air Traffic Controller (Atlanta, Georgia)
Age: 57 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 8/20
Statement of Opinion:
- It provides financial security during early retirement, encouraging continued work post-retirement without loss of benefits.
- Allows retired controllers to contribute effectively without economic disadvantage.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 6 | 4 |
Retired Air Traffic Controller (Los Angeles, California)
Age: 62 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 6.0 years
Commonness: 6/20
Statement of Opinion:
- The policy would have been beneficial immediately post-retirement when I decided to work.
- It helps bridge the financial gap before being fully eligible for Social Security.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 5 | 4 |
| Year 20 | 5 | 4 |
Recently Retired Air Traffic Controller (Chicago, Illinois)
Age: 56 | Gender: male
Wellbeing Before Policy: 4
Duration of Impact: 5.0 years
Commonness: 9/20
Statement of Opinion:
- This policy ensures I won't be penalized unfairly for continuing to work where skilled workers are needed.
- It enables us retired personnel to keep engaging with our field without undue loss.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 4 |
| Year 2 | 7 | 4 |
| Year 3 | 7 | 4 |
| Year 5 | 7 | 4 |
| Year 10 | 7 | 4 |
| Year 20 | 6 | 3 |
Retired Air Traffic Controller (Miami, Florida)
Age: 59 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 5/20
Statement of Opinion:
- I think it positively impacts us by removing the retirement penalty on earned income, allowing continued meaningful work post-retirement.
- It should incentivize more retirees to work without worrying about penalties.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 6 | 4 |
Retired Air Traffic Controller (New York, New York)
Age: 61 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 4.0 years
Commonness: 8/20
Statement of Opinion:
- Policies like this provide confidence for retired controllers to continue working without losing important retirement benefits.
- It shows the importance of retaining skilled professionals even post-retirement.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 6 | 4 |
| Year 20 | 5 | 3 |
Retired Air Traffic Controller (Seattle, Washington)
Age: 63 | Gender: female
Wellbeing Before Policy: 4
Duration of Impact: 2.0 years
Commonness: 4/20
Statement of Opinion:
- This policy would be beneficial earlier in retirement, supporting controllers who choose to continue working.
- Ensures no reduction in annuity encourages talent continuity post-retirement.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 6 | 4 |
| Year 3 | 5 | 4 |
| Year 5 | 5 | 4 |
| Year 10 | 5 | 3 |
| Year 20 | 4 | 3 |
Retired Air Traffic Controller (San Francisco, California)
Age: 58 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 6/20
Statement of Opinion:
- It lets controllers like me keep working and sharing expertise without penalties reducing annuity income.
- Post-retirement plans are more feasible if income is not offset against annuity.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 5 |
| Year 2 | 8 | 5 |
| Year 3 | 8 | 5 |
| Year 5 | 8 | 4 |
| Year 10 | 7 | 4 |
| Year 20 | 6 | 3 |
Retired Air Traffic Controller (Phoenix, Arizona)
Age: 64 | Gender: female
Wellbeing Before Policy: 4
Duration of Impact: 1.0 years
Commonness: 4/20
Statement of Opinion:
- It would have been helpful right at retirement transition, easing financial strains as we manage life without a full-time federal salary.
- Having such policies benefits the professional life of retirees, avoiding penalty anxieties.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 5 | 4 |
| Year 3 | 5 | 4 |
| Year 5 | 5 | 4 |
| Year 10 | 4 | 3 |
| Year 20 | 3 | 3 |
Cost Estimates
Year 1: $100000000 (Low: $80000000, High: $120000000)
Year 2: $100000000 (Low: $80000000, High: $120000000)
Year 3: $100000000 (Low: $80000000, High: $120000000)
Year 5: $100000000 (Low: $80000000, High: $120000000)
Year 10: $100000000 (Low: $80000000, High: $120000000)
Year 100: $100000000 (Low: $80000000, High: $120000000)
Key Considerations
- The policy targets a very specific population of retired FAA air traffic controllers who continue working in contract towers.
- Budget impact is relatively modest but removes a cost-saving measure already in place for federal retiree annuities.
- Potential positive economic impact through increased disposable income for air traffic controller retirees but minimal impact on overall GDP or tax revenues.