Committees have been formed in government. Congress has held hearings on life-after-the-brain-drain. Private companies have made pots of money studying the problem which federal agencies, presumably, were too stupid to study themselves. Predicting, and planning for ways to cope with the retirement tidal wave has become a cottage industry. This is especially true in the Washington area. We have more think tank experts and private consultants than residents who belong to bowling leagues. That explains why Washington is known by many outside the beltway as The City Of The Worried Well.
There is only one hitch!
It still hasn’t happened. What the forecaster/shamans failed to take into account is a lousy economy. A time of deflation when many companies are forcing workers (those they didn’t lay off) to take pay cuts of 10 to 20 percent. When states, like California, are paying vendors in IOUs. When bankrupt institutions are reporting profits (with plans for big bonuses) thanks to federal bailout money when they kept and invested.
Many, many federal workers who could have, and planned to retire, last year or this year are sticking around. Probably you know some. Maybe you are one.
The reasons for delaying retirement vary. Some were energized by the prospect of working for the new administration. Others put retirement on hold because the private sector job they were planning to take has disappeared. Others, even though they had no plans to find another job, are waiting until things improve. Many are waiting until their TSP accounts—some of which took a 30 percent hit—rebound. This is especially true for FERS employees whose guaranteed civil service annuities are about half those of people under the CSRS plan.
“It’s a historical fact that the rate of retirements drop when there is an economic downturn,” said a former OPM expert. “Starting in the late 1990s we (in government) started beating the ‘brain drain’ drums. The numbers were there but people forgot what happens when you get a period of high inflation and,or, rising unemployment.”
Add to that, he said, is the fact that the Obama administration plans to increase the size of government as it increases the government’s role in various sectors of the economy. He said some old-timers who have been ignored by their bosses for several years suddenly “bring value added” to their jobs. They’ve got that been-there-done-that experience that the new group of political appointees need and know they need it.
The fact that federal workers are getting a pay raise next year and federal retirees are NOT getting a cost of living adjustment could further tighten the spigot on the retirement tidal wave.
All in all, he said, “this is a better time to be a senior federal worker than a senior citizen retiree.”