The Reagan administration, looking for ways to trim the price tag of the civil service's billion-dollar-a-month retirement program, may take quick action on a General Accounting Office suggestion that Uncle Sam stop offering early retirement to so many relatively young workers.
Several federal agencies that are undergoing or facing reorganizations and RIFs (reductions in force) are giving employes the option of volunteering for involuntary retirement, meaning that some can quit on immediate pensions as early as age 43.
Under the Carter administration's civil service reform act, agencies facing personnel changes can -- with permission from the Office of Personnel Management -- open windows for limited periods to allow workers with 25 years service to retire at any age, or for those age 50 with at least 20 years to get out on reduced annuities. Idea is to create vacancies and minimize the impact of RIFs on younger, less senior civil servants.
OPM's new, conservative management has been relatively tight-fisted with agency early-out requests (rejecting many and limiting others to specific jobs and/or geographic regions). But GAO, the fiscal watchdog for Congress, says too many are still getting out too early. GAO says this adds millions of dollars to the cost of the retirement system which is borne by the taxpayers, and federal workers who contribute 7 percent of their annual salary to the in-house pension system.
GAO's report (B-201496) says OPM must "tighten eligibility criteria for early retirements to avoid unwarranted separations and reduce costs. Hundreds of unwarranted involuntary retirements are occurring because current OPM policy permits employes to decline reasonable offers of other positions and retire early. The involuntary retirement program needs to be restructured to prohibit early retirements when an agency extends to the employe whose position is to be abolished a reasonable offer of another position." A reasonable offer, GAO says, would be a similar job in the same commuting area where the employe would not be required to take an immediate pay cut.
By law OPM must report within 60 days on what action, if any, it is taking on the GAO recommendations, and if none is taken, why not.