The perfect storm for buyouts

Tight budgets, the return of the COLA and the likelihood of an extended pay freeze are causing some feds to consider their options — assuming they have any. For some, it’s like giving a prisoner the choice of being shot or hanged. For others it’s a little better.

Efforts by Congress and the White House to trim the deficit combined with pending budget cuts have created perfect storm weather that is almost certain to produce more offers of buyouts and early retirement. If that doesn’t work, some agencies are preparing contingency plans for last-hired-first-fired RIFs reminiscent of the 1990s downsizing of government.

Our Sept. 23 column, “Buyouts About to Jumpstart,” pointed out that while the dollar value and condition of the buyouts is unchanged, they won’t be as sweeping as those of the Clinton administration. At that time the White House goal was to eliminate 272,000 federal jobs, reduce “overhead” positions that could be done by private contractors and RIF (fire) more than 10,000 employees. At that time some agencies offered buyouts and/or early outs to any eligible employee.

Subsequent buyouts were more limited in scope, often being confined to only certain parts of an agency, to certain grade levels and even to specific geographic areas.

The current round ranges from the 6,000 buyouts being offered by the Air Force to a smaller offering (500-plus at Agriculture, 400 to the ATF) in other agencies. In some places, the buyout numbers are small but, like at the Federal Trade Commission, one in 10 employees would be eligible. HUD, which is offering 18 buyouts, is an example of the surgical and limited nature buyouts can take.

The Postal Service is looking to eliminate 220,000 jobs between now and 2015.

Right now, about 300,000 federal workers are eligible to retire under regular (non-early out) buyouts. If you count the people who could take early retirement (age 50 with 20 years of federal service or at any age with 25 years service) the number of eligibles jumps dramatically.

In most cases it pays agencies to offer buyouts as early in the fiscal year as possible. Since that started October 1 the months between now and February are prime time. Once budgets are approved by Congress (if they are) and the supercommittee makes its recommendations (if it does), the picture will be clearer.

Bottom line is if you think you might take a buyout or early out, do your planning now. In order to take your FEHBP health insurance into retirement you must have been covered by one of the FEHBP plans for the five years prior to retirement.

Meantime, here’s our Buyout Guide, which shows you the current state of buyouts and early-outs government wide.


By Jack Moore

When Q-tips were first commercially sold, they were known as “Baby Gays,” mental_floss reports. They were re-branded Q-tips in 1926 with the Q standing for “quality.”


Buyout Guide
Find out which agencies are offering early retirements and buyouts.

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