The lump-sum pension option that has consumed many retirement-age federal workers since it was first offered a few years ago is on its last legs. The only question before congressional budget conferees is whether to kill it off this month or give workers a few more weeks to put in their retirement papers.

For many, it was fun while it lasted. Eight of every 10 federal retirees took the payments, even though doing so cut their lifetime pensions by an average of 8 to 12 percent, much more in some cases. Many didn't understand the full tax implications of getting the big payment, which, when added to their last year of salary and payment for unused sick leave, left some with staggering tax bills.

But despite the popularity of the lump-sum option, not everybody will mourn its demise. Among those who won't miss it: federal personnel and retirement offices that often were swamped with questions about the program that they couldn't answer because Congress kept changing the rules.

For most people, the payments (which equal about 7 percent of career federal salary) were just too big to resist. Local retirees averaged $32,000. But some longtime, highly paid retirees got pretax payments worth $96,000.

In the end, however, congressional budget-cutters decided it was better to eliminate the lump sum -- which is of immediate concern to a relatively small number of workers at any one time -- than to take the more drastic step of freezing pension benefits for all retirees.

The House budget plan calls for eliminating the lump-sum benefit for most workers for a five-year period beginning Nov. 1. During that period, only retirees 65 or older with 30 or more years of service could take lump-sum benefits. The Senate plan would eliminate the benefit for everyone as of Nov. 1. Both plans would mean most prospective retirees would have to leave by Oct. 31 to qualify. There will be an attempt to extend the deadline -- perhaps through the end of November -- for the benefit of confused workers. But whether it goes away this month or next, the lump sum's departure will make retirement decisions and counseling less frantic in the future. Retiree COLAS

Eliminating lump-sum payments means that federal and military retirees and Social Security recipients will get full January cost-of-living adjustments. They will be worth 5.4 percent for Social Security, civil service and military retirees. Workers in the Federal Employees Compensation Act system will get 5.2 percent increases in the spring. Meetings

The National Association of Government Communicators will have its Fairshake Awards dinner Tuesday at the National Press Club. This year, the association will honor WAMU-FM radio broadcaster Fred Fiske and Fairfax County Supervisor Thomas M. Davis III (R-Mason). For reservations, call Dave Turner today at 703-920-0077 or tomorrow at 202-606-2157.

The Society of Federal Linguists celebrated its 60th birthday yesterday at a symposium and banquet at the University of Maryland. All members are professional translators or interpreters for the government.