$hrinking buyouts: An offer you can’t refuse?

Since $25,000 buyouts were introduced in the 1990s, many feds hoped and assumed Uncle Sam would sweeten the kitty. Some have delayed retirement anticipating more generous buyouts.

Size, sometimes, counts. Big time!

But the trend, if there is one, seems to be in the other direction. As in smaller, not bigger buyouts. Consider…

Federal buyouts come in many flavors.


If you work for most federal agencies there is the take-it- or-leave it, one-size-fits-all $25,000 buyout. You agree to take regular or early retirement, and you get a lump-sum payment minus deductions. Depending on your salary, state taxes and deductions the final payment works out to around $18,000, more or less.

If you work for some profit-making federal agencies that are financed in whole or part by fees (from banks or other operations they oversee), buyouts can be tailored and made more generous than the typical $25K goodbye. The same is reportedly true for certain intelligence agencies that can write their own buyout checks.

But for a large chunk of the federal workforcem there are (or have been) a variety of buyouts. For example would you prefer:

  • A buyout equal to six months pay.
  • The standard $25,000 buyout.
  • A buyout, paid in two annual installments, worth $20,000.
  • Or, a buyout of $15,000 to be paid over two years.

If you’ve been around the rapidly-shrinking U.S. Postal Service for awhile, you have seen all of the above offers given to tens of thousands of employees.

The USPS position toward buyouts has been never-say-never.

Over the years, the USPS, still the second largest federal agency (after Defense) has eliminated hundreds of thousands of workers. At last count, there were between 530,000 and 540,000 postal workers. But that was just before the USPS offered $15,000 buyouts (the smallest in the series) to tens of thousands of workers, clerks, drivers, mechanics and others — represented by the giant American Postal Workers Union. That’s a lot of people. In most federal agencies, unions “represent” many — sometimes the majority of — workers who are not dues-paying members. By contrast, in the USPS, most of the people represented by the APWU and the NALC are also members of the union.

During the 1990s, the USPS offered buyouts equal to as much as six-months salary. Back then that wasn’t all that much for the majority of its workforce, which is made up of clerks, letter carriers and mail handlers. But some higher-paid employees took the half-year pay. In many cases, it turned out to be the wrong employees, and the service had to hire new people to replace them.

Congress took a very dim view of the situation, and postal officials issued a “Never Again” pledge. Never again lasted until the summer of 2009 when a new round of (then) $20,000 buyouts were offered. Two of every 10 postmasters (about 4,100 people) took the buyouts. By the time buyouts were offered to members of the mail-handler craft, they had shrunk to $15,000 — the current level — and roughly 3,000 took the money and retired.


By Jack Moore

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