Where have all the buyouts gone?

So, where are the buyouts? Have they gone away, or have they moved under the radar?

As recently as a year ago, more than a dozen agencies were offering $25,000 (before deductions) to thousands of workers to take regular or early retirement.

The payments — subject to federal, state and local taxes and other deductions — were first authorized in the mid-1990s when the Clinton administration decided to trim the federal payroll by more than a quarter million jobs. Many of the functions continued, but were farmed out to private contractors.

Buyouts were reduced to a trickle for years, but they were revived in 2011 as agency budgets tightened. Defense, the largest federal agency, led the way in buyouts over the past couple of years. Air Force had two separate rounds of buyouts.


More than a dozen non-DoD operations also offered their people cash- to-go, either via regular or early retirement.

The U.S. Postal Service offered its own version of buyouts. Most were less than the $25,000 payments offered by other agencies and some were spread over two years.

In June of last year The Washington Post reported that the Office of Personnel Management, the government’s central HR operation, would offer buyouts to up to 300 buyouts to its employees. OPM led the federal downsizing drive during the Clinton administration. Some workers at OPM say they’ve heard rumblings of another round of buyouts as early as January of next year.

“We keep hearing rumors of buyout … but without any confirmation,” a federal HR official said earlier this week. “It’s almost like [the situation] with the SES bonuses, as if [the administration] doesn’t want to talk about it.”

Before this year’s furloughs (for which employees did not get paid) and the shutdown (where people were paid, anyhow) there was considerable speculation about buyouts in the 2014 fiscal year. That started Oct. 1. Many assumed that with agency budgets still up in the air, and phase two of sequestration kicking in, buyouts would be the solution. The payments are most cost-effective to agencies early in the fiscal year. If they can get a highly- compensated worker off the roles early in the year, they are ahead.

There seems to be tremendous pent-up demand for another round of buyouts. Hundreds of thousands of white-collar federal workers are eligible — with enough age and service — to take regular retirement. That number jumps dramatically when people are offered early-outs (with a buyout) at age 50 with 20 years or any age with 25 years of federal service.

Federal pay has been frozen for the last three years. Workers are due their first increase — a 1 percent raise — in January. Some got longevity step increases (worth 3 percent) during the freeze or thanks to promotions. But most feds are still at their 2010 pay levels although mandatory expenses, like health insurance have gone up each year. In January, federal health premiums will rise 4.4 percent.

“I loved every minute of my 32-year federal career,” said an IRS worker in Kansas City, “but trust me, if they offer us a buyout I am gone in a heartbeat. The fun, thrill and service side of this job have gone away big time.”

Any Thoughts: Is your agency planning or already running buyouts? If so, will you take the money and run? Let us know.


Compiled by Jack Moore

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(Source: Popular Science)


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