Buyouts, early-outs arouse KMA Club

Want to liven up an office party? Wake a friend or spouse nodding off in church? Bring an eyes-glazed-over friend back to the land of the living? If so…

Quietly whisper the words early retirement or buyout as you are leaving the office or joining any group of federal workers. It will, trust me, get their attention.

Buyouts and early outs are the equivalent of a secret society’s secret handshake. To the large and growing KMA Club in the federal establishment, few things would be more welcome than news that their agency is or will offer them the chance to take early retirement with a buyout worth up to $25,000 before deductions.

Buyouts, layoffs and increased contracting-out operations were used by the Clinton administration to downsize federal operations. Most went to Defense Department employees, and most of them were males in blue-collar jobs. Because so many were veterans, they would have survived reductions in force. But $25k in the mid-1990s was a chunk of change, especially for relatively low-paid federal workers.


During an early-out, employees can retire (and keep their all-important federal health insurance) if they are age 50 with 20 years of federal (civilian or military) service or at any age with 25 years of service. Employees under the CSRS retirement program take a 2 percent annuity reduction for each year they are under age 55. There is no such reduction for FERS early-retirees.

December, January and February are the prime times for agencies planning buyouts or early outs to announce them. The fiscal year started Oct. 1, and getting people off the payroll sooner rather than later in the year is the way to go. If they are going that way.

Friday’s column spotlighted the first big early-out of the year. Social Security with 60,000 workers announced an early out for people who register by May and agree to be gone by July. Nobody knows how many takers it will have. Early outs without an accompanying buyout are relatively unpopular. But lots of SSA people have the time and age qualifications.

Workers in dozens of other agencies, from Housing and Urban Development, the Internal Revenue Service and even the quasi-government Washington Suburban Sanitary Commission, asked if there are early outs, and better yet buyouts too, in the offing. Good question. Those that are going to do it probably will announce it shortly.

Because early-outs are less costly than buyouts, that is the route most agencies take. But will a stand-alone early retirement offer get enough takers?

There is a secret government society known only as the KMA Club. It’s believed to be as old as the republic. It also has branches in the private sector.

In some federal agencies, one-third to nearly one-half of all employees either belong to the KMA Club, sympathize with it or are eligible to belong.

KMA Club members tend to be laid back and are said to be able to recognize each other after a few words of conversation. Few work-related things, other than talk of buyouts/early outs, seem to excite them. Meantime, here’s what some feds are saying about the first early out announcement:

Your column was interesting but I doubt anybody in SSA will leave without a buyout … Unless I’m well off I wouldn’t leave. I hope for buyouts here at the IRS, but not really counting on that. I just talked to my assigned retirement specialist. My paper work is all in order scheduled retirement … to gain a full pay period. I can move that date up with just a phone call. Our commissioner says he will do everything to prevent furlough days. Just don’t know what that means as yet. Will have a better idea nearer to April 15. — On Hold At The IRS

Finally, there are those for whom a buyout or early-out has no appeal. As K at the Department of Veterans Affairs put it:

“We have one team leader who started during the Korean war (seriously). We all know she’s going to die at her desk, but we expected that to happen 10 years ago. ”


Compiled by Jack Moore

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IRS chief: No furloughs this year
The head of the Internal Revenue Service said the agency isn’t planning employee any furloughs this year, even though Congress decided not to restore funding to the agency that had been lost due to the across-the-board sequestration cuts. IRS Commissioner John Koskinen said the budget crunch, though, would mean taxpayers will see a decline in services.

SSA offering early-outs
The early-out offer at the Social Security Administration is one of the first this year in government. SSA’s early-out is for employees who are at least 50-years-old with 20 years of federal/military service or anyone with 25 years of service regardless of age. Senior Correspondent Mike Causey says it could open up the promotion pipeline for younger, mid-career employees and jump-start early retirement offers at other agencies, as well.