Hoping For a Buyout? Hang Tight!

Government-wide buyouts, that were commonplace in the 1990s then all but disappeared, are starting to make a comeback, but on a very limited basis.

Currently the U.S. Postal Service and the Federal Trade Commission are offering buyouts (VSIPs) and early retirement (VERAs), and the Air Force is planning to canvass nearly 65,000 civilians for a show of interest. Memo to the AF: They are interested!!!

Most of the 200,000 Clinton-era buyouts were aimed at Defense Department civilians. The idea was to eliminate more than 270,000 jobs government wide without resorting to layoffs that would have hit younger workers without veterans preference protection. The $25,000 amount was considered sufficient to persuade long-service, relatively low-paid employees to head for the exit.

Stand alone offers of early retirement were usually ignored unless accompanied by a buyout. The maximum buyout was set at $25,000 (before deductions). That was a tidy sum then, especially to the targeted group at the time. Today the cash value of the buyout, minus taxes and deductions, is not much of a lure unless the individual was already planning to retire, or has another job lined up.

Congress initially had to approve buyout requests. Later Defense and some other agencies were given the green-light to offer buyouts as needed. In combination with early retirement (VERA,) many workers were eligible to retire at age 50 and some as early as age 43. Many of their jobs, which were described as “overhead” positions were farmed out to private contractors.

Many agencies have dusted off buyout plans as their budgets, which have been in limbo for more than a year, appear likely to be cut. The start of the new fiscal year (October 1) could see an increase in buyouts and early-outs, especially if Congress and the White House mandate reductions-via-attrition of up to 200,000 workers. That’s about one out of every 10 nonpostal workers now on the payroll.

Last month Federal News Radio first reported that the Federal Trade Commission was canvassing workers to see if they would like the buyout-early out option. Workers now say they have been contacted and that buyouts are coming.

The U.S. Postal Service announced targeted buyouts, aimed at mid-management types, and the Federal Times says that just over 2,000 have agreed to take them soon. The USPS buyouts will be worth $20,000 split in two equal installments this November and next November. Overall the USPS wants to eliminate just over 3,100 jobs ASAP.

The Air Force times has reported that the Air Force Materiel Command will survey employees this week to see how many buyout takers it would get, if the incentive is offered. AFMC, like other Defense units, needs to slim down and others are likely to offer buyouts and early outs. If there are not enough takers, layoffs (RIFs) could be in the works.

(Despite the large number of people who took buyouts and early outs during the Clinton years, several thousands employees were fired via the reduction-in-force process.)

Defense (barring another war and depending on the situation in the middle east) and most other agencies are trying to get smaller under pressure from Congress and the White House.

What that probably means is that more agencies will be offering buyouts but on a selective basis. That is targeting geographic areas (many of the USPS cuts will come from headquarters), or limiting them to specific parts of agencies and departments and even to specific job series. Rumors that the buyout pot will be sweetened (to $50,000, a year’s pay, two year’s pay, take your pick) are just that.

To reach me: mcausey@federalnewsradio.com


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