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Federal News Radio
Buyouts,
phased retirement: Where have they gone?
By Mike Causey
April 29, 2016
When you launch a lead submarine, filled with rocks and a screen door
to let in the fresh air, it might not be wise to invite CNN or Fox News
to cover the event until you see how well the boat dives and if it can
surface. Which brings to mind the fate of two of the most innovative
and (supposedly popular) federal personnel programs ever started.
Buyouts (first offered in the 1990s) and phased retirement, which is
out there but apparently lost in space as far as most federal agencies
are concerned.
Buyouts were developed in the Clinton administration, designed
primarily to lure blue-collar, white-male veterans (with job security)
into retirement so the large number of women and minorities who had
been hired would survive a massive downsizing because of the
government’s vets preference and last-hired-first-fired program.
Buyouts worked as planned. Thousands of otherwise layoff-proof workers,
mainly in the Defense Department, took the $25,000 buyout bait. In some
cases, they also took early retirement. The full buyouts were worth
$25,000 before deductions. But they were popular because $25k was a
tempting offer in those days. But after the first couple of rounds of
buyouts, they’ve been a rusty tool in most agency HR and budget
offices. Buyouts are most effective if offered early in the fiscal year
(October, November, December) and the employees who take them are not
replaced.
Last year only a couple of agencies (the Government Publishing Office
being one of them) offered a handful of buyouts. Most didn’t use the
tool. But that could be about to change. If the Defense Department
pushes its plan, and Congress and the White House buy into it, the
pay-to-go of the future could be a $40,000 buyout. Again, before
deductions. The buyout upgrade is designed to recognize that lots of
things — prices and salaries — have changed in the last couple of
decades. What was a decent lure back in the day would be considered
chump change today by most feds, particularly because the non-federal
job market is not all that attractive, especially for people accustomed
to getting six-figure salaries. The next round of buyouts, if they come
to pass, was first reported by FedWeek. It said the new bigger bucks
buyouts are getting serious attention at Defense, which is usually the
lead agency in programs like buyouts and early-outs, only this time
with a $40,000 reward, designed to account for price and salary
increases over the last 20 years. Next, phased retirement. Like what
happened?
When the phased retirement program was first proposed, many feds went
wild. Agencies seemed to like it too. Many experts say the best way to
test and adjust to life in retirement is to do it slowly. Work a couple
of days a week and get used to having more free time (and less money).
It was sold as a valuable tool to the government since those taking the
perk would spend X hours per week mentoring the people who would
replace them. It was billed as the greatest idea since sliced bread.
Congress mulled it for a long time and then OPM took forever (in some
people’s eyes) to come up with guidelines. Those guidelines give
agencies lots of leeway . They could more-or-less custom tailor the
program to their needs. So what happened? Not much.
Agency responses to phased retirement — now that it is authorized —
have been underwhelming. Is everybody waiting for somebody else to
start the ball rolling. Or, now that it’s here, is it going nowhere.
Clues?
Read this and other articles at Federal News Radio
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