Copyright 1999 The Washington Post
The Washington
Post
October 5, 1999, Tuesday, Final Edition
SECTION: METRO; Pg. B07; FEDERAL DIARY
LENGTH: 789 words
HEADLINE:
The Ins and Outs of the Early-Out Program
BYLINE: Mike
Causey
BODY:
Uncle Sam's on-again,
off-again early-out program, which has made it possible for thousands of federal
workers--some in their early forties--to retire sooner than expected on
immediate pensions, has been extended indefinitely.
Permanent early-out
authority is very important in a government that is downsizing, and where the
average employee is pushing age 46.
Most retirement-age federal workers
are under the old Civil Service Retirement System. Normally, the earliest they
can retire and get an immediate annuity is at age 55 after 30 years of service.
CSRS workers can also retire at age 60 with 20 years' service, or at age 62 with
five years' service with benefits based on length of service and salary. But
before you walk in and tell the boss what to do with your job, make sure you
understand how the program works. Just because early-outs are available, and you
qualify and want out, doesn't mean you will get an offer.
For example:
(1) Authorization for your agency to offer early retirements must be
approved by the Office of Personnel Management. In most instances agencies must
justify the approval on grounds that they are cutting jobs, reorganizing or
shifting their workload.
(2) The decision to offer early retirement is
strictly a management option. It is not an employee entitlement. Your agency can
target early-out offers (just as it does buyout offers) to specific groups of
workers by agency, division, occupation or location. You can ask for an
early-out, but you can't demand one.
(3) Early retirement is limited to
employees who are at least 50 with at least 20 years of federal service, or
those who have at least 25 years of service, regardless of age.
(4)
While the annuity is immediate, it will be reduced by a factor of 2 percent for
each year the retiree is under 55 for employees retiring under the Civil Service
Retirement System. While that penalty seems harsh to many federal workers, it is
mild by private-sector standards. In many private retirement plans, a much
higher penalty is applied to people who retire before they are 65.
The
early-out program was made safe by language inserted in the Treasury-Postal
Service-General Government Appropriations bill by Rep. Steny H. Hoyer (D-Md.).
The giant money bill has been signed into law.
Hoyer's plan--outlined in
the Sept. 17 Federal Diary--saved the early-out program in most agencies. Had it
not been approved, agencies--as of Oct. 1--would no longer have been able to
target early-outs to employees, occupations or locations where they were needed.
Instead the early-outs would have been open to any worker meeting the age and
service requirements. Broadening the program that way, most agency officials
say, would have killed it for most agencies.
Bottom line: Early-outs no
longer must be reapproved each year by Congress. And agencies--not
employees--will determine who gets an early-out offer.
Buyouts
Buyouts are often linked to, or confused with, early-outs. They,
too, are a management tool, which means that agencies decide who gets one. In
most cases the maximum buyout payment is $ 25,000 before deductions. Generally
speaking, employees who take buyouts and return to government service within
five years must repay the full (gross) amount of the buyouts. Agencies with
buyout authority are: Defense, Internal Revenue Service, National Aeronautics
and Space Administration, Energy, Nuclear Regulatory Commission, Architect of
the Capitol, Government Printing Office, Bonneville Power Administration,
General Services Administration and two Treasury Department units, the Office of
the Inspector General for Tax Administration and the Chicago office of the
Financial Management Service. The Agriculture Department also has buyout
authority, but its maximum payment is limited to $ 10,000.
Pension Offset
Rep. William J. Jefferson (D-La.)
has picked up a record 192 co-sponsors for his legislation that would modify the
impact of the so-called Government Pension Offset law on Social
Security benefits due to federal retirees. Under the law, the spousal Social
Security benefit of people who draw their own civil service annuity can be
reduced and often eliminated. Jefferson's bill would allow retirees to receive a
minimum of $ 1,200 a month in combined benefits; offset provisions would be
applied to amounts above that level.
Opponents of the offset legislation
have never generated much congressional interest until this year. Jefferson
credits an intense lobbying effort by the National Association of Retired
Federal Employees with helping produce a bumper crop of co-sponsors.
Mike Causey's e-mail address is causeymwashpost.com
Tuesday, Oct. 5, 1999
LOAD-DATE: October 05, 1999
