Buyouts and early-retirement, the end-of-the-rainbow reward for long-time (and long-suffering) feds are expected to come fast and furious over the next couple of months.
Earlier this year, the Federal Trade Commission, portions of Air Force Materiel Command, the U.S. Postal Service and the Smithsonian Institution authorized or announced a limited number of buyouts to employees.
Agriculture is the first cabinet-level operation to join the buyout parade. The open window dates for the Ag buyout/early out and employees who will get the offers will be announced shortly.
During a buyout/early out period, workers can be paid up to $25,000 (before deductions) to take regular or early retirement. Most retirement eligibles in government are under the old Civil Service Retirement System. CSRS was replaced by the FERS program in the mid-1980s. In the case of the Postal Service, the buyouts are worth $20,000 (before deductions) and are paid in two annual installments.
Regular retirement age (for full and immediate benefits) for CSRS employees is age 55 with 30 years of service, age 60 with 20 years of service or 62 with 5 years of service. But during an early-out, employees can leave on immediate (though in some cases reduced) annuities if they are 50 with 20 years service or at any age if they have 25 years of service. The advantage of getting an immediate annuity, in addition to the money itself, is that the employee can keep his or her health insurance in retirement and for life.
During the 1990s, the Clinton administration decided to downsize government (trimming 272,000 civilian jobs) via a combination of buyouts and early outs, limited hiring and some layoffs. Many of those jobs were out-sourced to private contractors. Buyouts, which started in Defense, once had to be approved by Congress. Now agencies have the authority to offer them, with approval from the Office of Personnel Management. Buyouts in recent years have been more selective. They are often limited to specific units within an agency, and some to specific jobs, grades or even geographic areas.
The Agriculture offer, for example, is limited to the Agricultural Research Service (you may know them for their stink bug research), Animal and Plant Health Inspection Service and the Natural Resources Conservation Service. Secretary Thomas J. Vilsack said OPM gave the green light on May 13 and the buyout-early out was officially announced on May 26.
Sources say that dozens of other agencies, facing budget reductions, have buyout-early out requests pending. OPM does not comment on them until they have been approved. But often-times employees find out a request has been made and alert coworkers (and, ahem! the media) that a buyout may be in the works.
Buyout Reality Check: Remember, buyouts are at the agency’s option. The fact that you may want and need one means, sorry, nothing! Wishing won’t make them happen and starting buyout rumors won’t “force” a reluctant agency to give the go-ahead.
Something to keep in mind if you drive the Los Angeles freeways: Freakonomics reports “July 5 tends to have an unusual number of animal-related traffic problems, as pets, spooked by the fireworks on the previous day, have a greater propensity to wander onto freeways.”