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Buyouts about to jumpstart
Friday - 9/23/2011, 2:10am EDT
Looking for a buyout?
If so, be ready to move quickly.
The failure/inability of our vacation-happy Congress to approve 2012 budgets for federal agencies improves the odds of folks who would leave immediately if they got a buyout.
But the lack of a budget for the fiscal year that begins in 7 days could create problems for the majority of feds who will be left behind because they weren't offered or couldn't take a buyout.
Whether they have budgets or not, most agencies know they will have less to spend starting Oct.1. And perhaps for a long time after that. That will cut into travel and training in many agencies and reduce the number of promotions. People who leave because of regular or early retirement (with or without a buyout) often won't be replaced. That means more work for those left behind.
Buyouts in most cases are $25,000, before deductions for federal and state taxes, Social Security, etc. Buyouts are usually accompanied with an early-retirement offer that permits employees under the old CSRS retirement system (the majority of whom are retirement age) to leave on an immediate annuity at age 50 after 20 years of service or at any age after 25 years service. The annuity will be reduced slightly for each year under age 55 but the retirees will be able to keep their health insurance coverage for life.
Buyout decisions are being scored right now in more than a dozen agencies and departments. The idea in most cases is that it's cheaper to get an employee off the payroll early in the fiscal year than to keep them and depend on attrition to thin the ranks. And they will come in all shapes, sizes and locations:
Buyouts may be small (like the 350 being offered by the Library of Congress or 56 at the Government Accountability Office) or large (like the 7,000-plus at the U.S. Postal Service, which is offering $20,000 buyouts in two installments). The USPS downsizing is have a ripple effect. The American Postal Workers Union, which represents clerical (inside) employees of the U.S. Postal Service is offering buyouts to some of its long-time staffers. Other unions representing feds may also have their own buyout programs.
Agriculture offered early-retirement to most eligible employees, but is limiting buyouts to 544 workers in three Ag agencies.
Justice gave 31 buyouts to employees in its AntiTrust Division. It has also frozen hiring, except for the FBI.
There is tremendous buyout interest in two of the government's largest and most important agencies. That would be the Internal Revenue Service and Social Security Administration. No word yet, but stay tuned.
But here's a tip:
Agencies usually don't discuss buyouts — even in the abstract — unless they are seriously considering them. In early August, the Air Force froze civilian hiring and said it was considering buyouts. This week it announced it will offer up to 6,000 buyouts and early-outs to eligible employees. Other agencies offering buyouts and/or early outs outs include the TSA, Smithsonian, HUD, FTC, Department of Education and the U.S. Courts.
If you are even contemplating a buyout, financial planners say to weigh your options very carefully. If you are retiring simply because you need the after-taxes buyout, most pros say you should keep working. If you will need to get another job after you retire, look at the labor market which, in most places, stinks.
Buyouts and early retirement can be great for some people. Just make sure you are one of those people. For the list of buyouts being offered, click here.
NEARLY USELESS FACTOID
By Jack Moore
It turns out Americans may not be litigious as you thought. In Italy, six scientists and a government official are facing manslaughter charges. Their alleged crime? Failing to warn the public "aggressively enough of an impending earthquake" that ended up killing 300 people in the Abruzzo region in 2009, according to LiveScience. Most scientists consider earthquakes to be literally unpredictable.
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