Despite the constant dire warnings of a government-wide brain drain of epic proportions, the folks needed to make it happen, those pesky retirement age feds, ain’t going nowhere! At least not in the huge numbers or on the timetable set out for them by brain-drain forecasters.
And that isn’t likely to change in the near future.
As one OPM staffer said of his aging office, the going-away events in recent years are about evenly split between retirement luncheons and funerals!
Fears of a massive brain drain surfaced in the late 1990s and gained traction over the years. They’re based on estimates of how many people are or will be eligible to retire over the next one, 5 or 10 years. The data is correct, but the assumptions that folks would pull the plug as projected have consistently missed the mark.
People are working longer than expected. Some because they like it, others because they feel they must. Others because they know they have to.
The number of regular retirements from the government have remained relatively steady in recent years.
Even early-retirement, the dream of many public and private sector employees, is getting less popular each year in the federal government. That is believed to be a function of the economy, when times are tough people don’t give up their jobs, and the changing mix of who is eligible to retire. Folks under the Federal Employees Retirement System now make up the majority of working feds. And FERS has a less generous civil service annuity benefit than the older CSRS retirement plan. FERS retirees also get smaller cost of living adjustments than CSRS retirees, and the COLAs for FERS folks don’t kick in until they are age 62.
“For a FERS employee, taking early retirement is a rotten deal,” a federal benefits expert said.
The government has been offering VERAs (Voluntary Early Retirement Authority) for years. When offered a buyout (maximum $25,000 payment before deductions) with a VERA, about 8 percent of the eligibles take them. But when it is a VERA without a buyout, the take rate drops to 4 percent or less.
And the number of people taking early outs has been declining steadily in recent years, and is likely to hit a record low in 2009.
Six months into the year 2009, only 515 non-postal federal workers have taken early-retirement offers. Most of them were Defense civilians. At that rate only about 1,000 employees will take VERAs this year.
By contrast in 2003, there were 7,800 non-postal VERAs. In 2004 about 6,600 took early retirement. In 2005 it jumped up to 7,500 but dropped to 5,750 in 2006. In 2007 there were 4,700 VERAs and last year only 3,500 took them.
The US Postal Service is offering (and pushing) early-retirement but has had relatively few takers. Postal union leaders have advised employees not to take an early-out unless they get a buyout too. The financially strapped USPS isn’t likely to do that. It would like to shed 70,000 of its 630,000 jobs. It estimates that 160,000 are eligible for early retirement and it would like to see 25,000 to 30,000 leave.
But given the state of the economy, the outside job market (not so good) and the fact that a growing number of retirement eligibles are under the FERS system, the tidal wave of retirements may be later rather than sooner.
What job-related perqs are you missing that could save you money, taxes and lots of grief? What kind of rainy day planning should you be doing right now?
Benefits expert John Elliott and CFP Rebecca Schreiber spent an hour yesterday listing things you should, and should not, be doing to improve your worklife and prepare for retirement. They were on our Your Turn with Mike Causey radio show. You can listen on your computer by clicking here.
A femtosecond is one quadrillionth (10-15) of a second. According to the Wiktionary, the prefix “femto” was created in 1962 by the Danish physicist Henning Højgaard Jensen (1918-2001) from the number femten (“fifteen”).