NDAA dashes chance of $40K buyouts for civilian employees

Retirement-eligible federal employees waiting for a higher-value buyout offer will have to wait a little longer.

Conferees to the annual defense authorization bill chose not to include a provision that would have increased the amount that civilian agencies could offer in the form of Voluntary Separation Incentive Payments (VSIP) from the current $25,000 to $40,000.

The Senate included this provision in its version of the National Defense Authorization Act. The House, however, did not, and lawmakers ultimately chose to exclude the Senate’s provision from the NDAA conference report.

Congress hasn’t adjusted the maximum VSIP payment for civilian employees since 2002, but lawmakers extended the authority for $40,000 buyouts to defense civilian workers late last year.

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Many agencies, such as the Environmental Protection Agency, Interior Department and others, have been asking for VERA/VSIP permission since the Office of Management and Budget encouraged them in 2017 to consider using the authorities as a way to restructure and reduce the size of their workforces through attrition.

But some employees have been hesitant to take buyout offers and have indicated that the current $25,000 limit isn’t enough to send them into retirement.

The Office of Personnel Management included $40,000 buyout offers in a list of legislative proposals that it submitted to House Speaker Paul Ryan (R-Wis.) late in March. OPM argued the $40,000 VSIP cap would “improve the attractiveness of buyouts as a workforce reshaping tool.”

Future of buyouts

Sen. James Lankford (R-Okla.) introduced standalone legislation on this very topic last fall. The VSIP Adjustment Act cleared the Senate Homeland Security and Governmental Affairs Committee in October 2017, but the bill never went to the Senate floor for a full vote.

OPM had better luck with another item on its legislative wish list in the 2019 NDAA.

Defense authorization conferees approved a proposal that would give agencies expedited hiring authority for recent college graduates and post-secondary school students.

The authority would generally let agencies determine their own recruitment sources and processes for soliciting qualified applicants to compete for positions.

The Office of Personnel Management can cap the number of hires agencies can make using this flexibility, but the provision would certainly give organizations the freedom to target specific colleges, universities and other programs with students that may best fit their recruitment needs and goals.

This has long been a concern for agencies, which have struggled to attract and recruit young talent. According to the latest OPM data, just more than 6 percent of the federal workforce is under the age of 30, with 1.2 percent of employees between the ages of 20-to-24.

NDAA conferees, however, did not include the flexibilities OPM asked for to help hire short-term employees more quickly. The House had included a provision that would permit agency heads to make non-competitive hires for up to 18 months to meet a mission critical need, but conference report excludes the proposal.