What’s a non-continuing relationship?

With sequestration a possibility, reduced budgets a reality and the November elections looming, the only certainty in government these days is uncertainty. And a new round of October-through-January buyouts. Why now, you ask….

Many federal contractors are wondering if they will still have jobs in 2013. The government has told them they don’t have to send out 60-day warning letters (mandated by federal law) that their jobs may be eliminated by the budget cuts known as sequestration. The Labor Department told contractors the letters aren’t necessary, and the government has now promised that it will pay any liability or court costs the companies incur if they don’t send out those letters.

Career civil servants are being told — by various real and imagined experts — they will be lucky to get away with being furloughed only 20 days next year. Various tax cuts are due to expire in January and nobody knows what, if anything, the lame-duck Congress will do. If tax rates change automatically in January, the IRS will be required to work with them, even if Congress reinstates the 2012 rates. That has happened before and if it happens again, it will produce a nightmare for the IRS — not to mention some taxpayers and tax preparers.

All of the above are reasons why buyouts are expected to jump-start between now and early next year. The IRS and Postal Service have kicked off the new 2012-13 season.


The latest IRS effort is small, for now. It’s limited to about 40 employees in its Human Capital offices in New Carrollton, Md.; Martinsburg, W.Va.; Fresno, Calif.; Atlanta, Ga.; and Andover, Mass. Thanks to a realignment, those offices have been designated as “non-continuing” sites. Workers are to be off the payroll by early January.

Under regular federal buyout rules, employees can be offered payments of up to $25,000 (before all deductions) and the chance to take regular or early retirement at age 50 with 20 years of service, or at any age with 25 years of federal/military service. In government lingo, buyouts are known as VSIPs and early-outs are called VERAs.

Jan. 1 rings in the New Year for most penickople, but for Uncle Sam Oct. 1 is the beginning of the new (fiscal) year. That makes the period from October through January or February prime time for buyouts. That’s when agencies get the most bang for their buyout buck. Persuading a $100,000-per-year worker to leave the payroll for $25,000 is a win-win.

The U.S. Postal Service, which was offering $20,000 buyouts paid in two annual installments, has just announced another round. But the new buyouts will be worth only $15,000. That’s either a reflection of how cash-strapped the USPS is, or it’s a Godfather-like offer you can’t refuse. Or perhaps a signal that this is as good as it’s going to get.

Some people have delayed their retirement for years based on the false hope (and a bogus Internet rumor) that Congress is working on a “secret” plan, which some call the Triple Nickel or 5-5-5 plan. Bottom line — according to this bogus rumor — is that buyouts might be doubled or tripled in value. Given what Congress has done (or tried to do) over the past couple of years, that rumor should be buried for all time.

Adding to the likelihood of more buyouts is the fact that many agencies don’t know what they will have to spend or cut over the next 12 months. Except that it will be less. The Social Security Administration has announced it will cut face-time with the public by closing field offices a half hour earlier. The idea, it says, is to save money on overtime. The SSA is the agency that touches the largest, and loudest, group of Americans. The early closings are also likely to cause customers to complain, loudly, to Congress — which may also be part of the plan.


By Jack Moore

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