Authority to offer workers immediate retirement as early as age 43 has been granted three Washington-area federal agencies with almost 10,000 workers.
The special limited early-out has been approved for headquarters staffers at the giant Department of Energy, at Labor's Employment and Training Administration and at the tiny Postal Rate Commission.
Energy has about 8,000 civil servants here. Labor's ETA has 1,600 employes and the Postal Rate Commission about 70 workers. All have been given the green light to allow eligible employes to volunteer for "involuntary retirement" and begin collecting immediate pensions. In some cases, workers who retired would be as young as age 43.
Under the new civil service reform act, early-out can be granted agencies -- or portions of agencies or departments -- that are about to undergo major layoffs or reorganizations. Agencies have to get permission from the Office of Personnel Management (formerly the Civil Service Commission) before they can begin the early-out program. OPM was the first agency to use the new early-out authority, since it is under-going reorganization.
Early retirement can be offered workers in Energy, ETA and the Postal Rate Commission if they have 25 years service, or if they are at least 50 with 20 years service. There is a pension reduction of 2 percent for each year the employe is under age 55.
The Employment and Training Administration's early-out period runs through June 30 of this year. The early-out for the much smaller Postal Rate Commision extends through April 6. For the Energy Department, early retirement will be allowed through Aug. 31.
Normal age and service requirements for retirement in government are at age 62 with five years of federal (or military service combined); at age 55 with 30 years or at age 60 with 20 years. For persons in hazardous jobs, the 50-20 rule applies.
Purpose behind the early retirement is to allow senior workers to elect "involuntary" retirement. This gives them an immediate (if sometimes reduced) pension, and can save the jobs of less senior workers in layoffs or reorganizations.
The price tag for the early retirement benefits is fast becoming a major political issue.
At hearings yesterday before the House Compensation and Benefits subcommittee, officials of the Office of Personnel Management said the selective use of early retirement saves the government time, money and much paperwork. They also argued that it was a humane way to allow senior workers to leave, and save jobs for younger employes.
But Rep. Gladys N. Spellman (D-Md.) who heads the subcommittee, said data she has collected indicates that the early retirements are adding to the unfunded liability of the Civil Service retirement fund. Spellman said the early retirements allowed so far have cost the fund $800 million, and the price will go up as more agencies use the authority. She says the costs result from letting workers retire extra early, and paying them benefits longer.
Spellman said there is evidence that the early-out authority is being "manipulated" both by senior officials for their own purposes, and by agencies to clean house of older workers. In one case, Spellman said, an official in his 50s had a job offer from private industry. But he was not old enough to retire under normal conditions.
To get around it, Spellman said the man allegedly ordered a reorganization of his agency that resulted in one job -- his -- being abolished. Thus he was able to take early retirement on immediate annuity from the government, and move into the private sector.
Spellman has the General Accounting Office investigating the early retirement program.She believes the time may have come to have agencies -- rather than the federal pension fund -- pay costs of early retirement when they offer it.