Too early to call it a ‘tsunami,’ but could 2018 retirements signal the start of something else?

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While it’s tough to say whether 2018 brought the beginning of the long-dreaded “retirement tsunami,” the past year’s numbers will certainly stoke the fears of some who say the federal workforce is headed for a crisis.

Nearly 12,000 more federal employees retired in 2018 compared to 2017, according to a Federal News Network analysis of the past year’s data from the Office of Personnel Management. OPM processed 107,612 retirement applications in 2018, a five-year high.

Federal retirements haven’t reached a peak that high since 2013, when 114,697 employees left their agencies. By all accounts, 2013 was certainly a tumultuous year for the federal workforce, which experienced a third consecutive year of frozen pay, administrative furloughs due to sequestration and a 16-day government shutdown.

Total federal retirements steadily dropped since 2013 and began to pick up slightly in 2017. Many had questioned whether the presidential transition or the first year of a new administration would finally prompt retirement-eligible federal employees to head for the door.

Retirements did pick up slightly in the first year of the Trump administration, but employees didn’t leave their agencies in droves.

In 2018, the uptick began in earnest in February.

Retirements in February 2018 outpaced the previous year’s totals by 4,000. In June, 3,000 more federal employees retired in 2018 compared to 2017 and 2,000 more this past November.

Just more than 18 percent of federal employees who were on board at the start of fiscal 2018 were eligible to retirement, according to the Partnership for Public Service.

If the 18 percent of the existing federal workforce — roughly 2.1 million employees, not including the military and U.S. Postal Service — did retire all at once, the government would lose about 378,000 people within the course of a year.

Last year’s numbers don’t hit anywhere near the 18 percent total, but recent events — namely the longest partial government shutdown in U.S. history — have the federal community worried that a significant retirement could be coming.

“What we’re going to have to watch now … is will that change?” John Koskinen, former IRS commissioner and deputy director for the Office of Management and Budget, said last month at an event at Duke University’s Sanford School of Public Policy. “Will the existing employees and potential new employees look at it and say there’s a different world out there now? The government has all the usual difficulties of getting in, but now in addition to that, you’re at this risk on a regular basis around issues that ought to be resolved otherwise. We haven’t seen the impact on that yet, but that’s one of the risks of regularly going through this routine.”

2019 numbers

The most recent January 2019 numbers don’t immediately indicate a need to raise the alarm bells. This past month, 13,294 federal employees filed for retirement, about 1,000 fewer than the previous January.

The real test, however, could be the next month.

February’s numbers, for example, may show that OPM has caught up with a backlog of retirement claims that it couldn’t fully process during the 35-day government shutdown said Tammy Flanagan, a federal retirement and benefits specialist.

The recent lapse likely delayed retirement processing for some federal employees, even if they had submitted their applications last fall but chose Dec. 31 or Jan. 5, for example, as their date to retire.

“Agencies aren’t able to send the claim to OPM until after the employee’s date of separation, which would have been during the furlough,” Flanagan said in an email. “All of those agencies impacted by the furlough mostly likely had difficulty in getting those claims to OPM.”

Human resources personnel, the very employees would be handling an individual’s retirement package and would send to OPM for processing, are often the first to get furloughed during a government shutdown, said Reginald Wells, a former chief human capital officer for the Social Security Administration and now senior adjunct professor of public policy and administration for American University.

Flanagan predicted OPM would receive a record number of retirement claims in February for this reason.

Federal employees, of course, have a variety of factors that ultimately contribute to their decision to retire.

More than 35 days without pay may have left lasting damage to employees’ long-term finances. The volatile stock market in 2018 has left some eligible-employees looking for more time to invest in their Thrift Savings Plan, Flanagan said.

But February’s numbers may also reflect a sense that multiple federal employee organizations have said is mostly anecdotal at this point — that some of their members are tired of the uncertainty and frustrated by shutdown planning.

Wells, who himself left SSA after developing a sense that he could make more of a difference in academia than in government, described the internal decision-making process that he’s heard his colleagues grapple with in recent years.

“I’ve heard other people [say] that they put off retirement a few different times,” he said. “They had the opportunity but they decided to blink and not do it, or they had some uncertainties about their financial futures and they just wanted to get a few more years into their annuity. [But there’s also those who say,] ‘I just don’t like what I see on the horizon, and I’m just tired of going through these kinds of traumas,’ and it does motivate some people to hang it up.”

Graphics by Amelia Brust

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