An increase in retirement eligibility among federal employees will not necessarily cause a stampede to the exit doors, retirement trend data suggest.
Concerns about an impending federal “retirement wave”—which has been the subject of warnings for many years—were heightened recently by a Government Accountability Office report. GAO found that of the 1.96 million permanent career employees on board as of September 2012, 14 percent were eligible to retire at that time, but that by September 2017, nearly 31 percent of them will be eligible.
A pending surge of retirements “could produce mission-critical skills gaps if left unaddressed,” GAO warned, and would hit certain agencies and occupations especially hard. For example, more than 42 percent of Department of Housing and Urban Development and Small Business Administration employees will be eligible to retire, as will be 45 percent of air traffic controllers.
Federal employees become retirement-eligible when reaching certain combinations of age and years of service. However, the choice of when to retire afterward typically is up to the employee; mandatory retirement applies in relatively few occupations, mainly involving law enforcement, firefighting and air traffic control.
Data covering largely the same population of employees provided by the Office of Personnel Management at the request of The Washington Post paint a somewhat different picture than the GAO report does.
Those figures show that of the 1.92 million employees in an OPM database as of July 2013, 41.8 percent will be eligible to retire by July 2018. However, that is virtually identical to the 41.5 percent of the 1.72 million employees in that database as of July 2008 who became eligible to retire by July 2013.
Further, of those who became retirement-eligible in the five years between 2008 and 2013, only 40.8 percent actually retired.
OPM looked at retirement timing in more detail in a March 2008 report, finding that of employees who became eligible to retire, only 15 percent actually did so in their first year of eligibility. Even after four years of eligibility, slightly more than half remained on the job, and after nine years, nearly a quarter were still working.
That report said that many factors play into the retirement decision, including “amount of money saved for retirement, the current state of the economy, number of children in college, whether or not a spouse is still employed, etc.” OPM has not put out an update of that analysis.
The GAO report similarly tied economic conditions to retirement decisions. It noted that the overall retirement rate averaged about 3.5 percent in 2004-2007, fell to 2.5 percent in 2008-2010, then rebounded to pre-recession rates starting in 2011.