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Shows & Panels
The worst year to retire?
Friday - 4/13/2012, 2:00am EDT
Thanks to buyouts, baby boomers, plumbing problems and an active anti-fed Congress, the year 2012 is shaping up to be one of the worst-ever times to retire.
For that matter, 2011 wasn't so hot either.
At the end of February, there were about 53,000 retirement applications in the Office of Personnel Management pipeline, according to the National Active and Retired Federal Employees Association. While that's a lot, the number was down from the previous month. It also means that some, maybe lots, of retirees are getting interim payments that are 10 percent to 60 percent (in extreme cases) less than their anticipated monthly annuity.
The average wait time is about four months (OPM's goal is to trim it to 60 days). But some people have been getting reduced annuity payments for much longer time periods. OPM has made unclogging the retirement pipeline and streamlining the process a top priority. New people have been hired to process the claims (still mostly a paperwork production). But it will take time to get them up to speed.
And things may get worse before they get better. For example:
- A growing number of federal agencies are offering early-retirement and buyouts ($25K before deductions) to meet lower budgets and avoid equally costly and often very disruptive reductions-in-force when employees with seniority and veterans-preference can bump short-service non-vets out of their jobs.
- The U.S. Postal Service wants to close more than 200 processing centers. Many employees will be transferred as the remaining centers ramp up to 20-hour days. But the service wants to eliminate about 15,000 jobs with the closures, and RIFs are a distinct possibility. That's in addition to the approximately 30,000 postal workers that leave or retire each year. In it's new business plan released yesterday, the USPS said that 283,000 employees, about half its career workforce, are eligible to retire now.
- The long-dreaded retirement tsunami (first forecast in 1999) seems to be here. Thousands of feds are approaching, at or are past the age-service line when they can leave on full benefits. The forecast is for between 6,000 and 8,000 to leave monthly during 2012. Last year retirement applications jumped by about 24 percent.
- Many retirement-age feds, who would ordinarily hang on because of the weak private-sector job market, may retire toward the end of the year. Congress has already approved legislation that would increase retirement-plan contributions — now 0.8 percent — to 3.1 percent of salary for feds hired after 2012. It would also put them under the less generous high-five formula for computing retirement benefits. But there is a serious proposal pending in the House that would increase retirement contributions for current employees too. If that passes, and insiders say it has a very good shot, lots of people might decide to bail out at the end of the year.
NEARLY USELESS FACTOID
By Jack Moore
Ants actually have some human characteristics. They stretch when they wake up, according to UselessFacts.net. They also "appear to yawn in a very human manner before taking up the tasks of the day."
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