OPM must move fairly on early outs

In an attempt to minimize layoffs or demotions because of downsizing and restructuring at government agencies the Office of Personnel Management recently invited agencies to request authority for early outs for their workers.

Congress also has passed governmentwide buyout authority - a separate issue that may or may not be implemented by agencies depending upon their specific situations.

To be eligible for voluntary early retirement an employee must by the date of separation:

* Have completed at least 20 years of creditable service and be at least age 50 or have completed 25 years of creditable service regardless of age.

* Have served in a position covered by the Civil Service Retirement System for at least one year out of the two immediately preceding retirement. (This requirement does not apply to employees covered by the Federal Employees Retirement System.)

* Be serving under a nontemporary appointment.

* Have been on an agency's payroll for at least 30 days before the agency's request to OPM for voluntary early-retirement authority and remained continuously on the agency's roll since that time. (If an agency wants an exception to this requirement OPM will consider written waiver requests.)

* Receive accept and be approved for an offer from the agency under early-retirement authority received from OPM.

OPM has told agencies that they may not use voluntary early-retirement authority to coerce workers into leaving retiring employees must confirm that their actions are voluntary. Agencies do have the latitude to determine who qualifies and can limit early retirement to certain organizational components job services grade levels or other criteria.

Agencies must identify such restrictions when they request early-retirement authority from OPM but can change the criteria after receiving OPM approval. In other words they are given a free hand. If an agency must limit its number of voluntary early retirements OPM requires it to employ a fair and objective method for approving applications. Your guess is as good as mine as to what that means.

Agencies also can establish their own early-retirement windows for designated components locations programs etc. That means an agency may offer early outs to certain employees only in a specified part of the year even if the agency has authority for the entire year.

To obtain OPM authority to offer early outs an agency must submit a request that explains why the authority is needed including a description of the agency's personnel and budgetary situation. The agency also must indicate the time period during which it plans to offer voluntary early retirement.

The Federal Workforce Restructuring Act of 1994 amended in November 1995 required agencies that offer buyouts and early retirements to come up with a contribution equal to 9 percent of the retiring worker's pay. Those payments made to the Civil Service Retirement and Disability Fund are designed to offset additional costs to the retirement fund generated by the large number of federal employees taking early retirement in conjunction with the buyout program authorized by this legislation. The agency contribution does not apply to early retirement without buyouts.

Judging from the fact that just about every agency has taken OPM up on its offer it looks as though 1997 will be a year when anyone who qualifies can apply for an early out so OPM should authorize a governmentwide early out to avoid inequities. Otherwise individuals in some agencies will be able to get early outs while others will not. That's not fair and does not help morale.

By the way one lesser known aspect of early outs is that retiring employees under age 55 covered by the Civil Service Retirement System will have their annuities reduced by 2 percent for each year of their age under 55. But employees under the Federal Employees Retirement System will see no corresponding reduction in benefits.

Bureaucratus is a retired federal employee who is a regular contributor to Federal Computer Week.


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