Uncle Sam's on-again, off-again early-out program, which has made it possible for thousands of federal workers--some in their early forties--to retire sooner than expected on immediate pensions, has been extended indefinitely.

Permanent early-out authority is very important in a government that is downsizing, and where the average employee is pushing age 46.

Most retirement-age federal workers are under the old Civil Service Retirement System. Normally, the earliest they can retire and get an immediate annuity is at age 55 after 30 years of service. CSRS workers can also retire at age 60 with 20 years' service, or at age 62 with five years' service with benefits based on length of service and salary.

But before you walk in and tell the boss what to do with your job, make sure you understand how the program works. Just because early-outs are available, and you qualify and want out, doesn't mean you will get an offer.

For example:

(1) Authorization for your agency to offer early retirements must be approved by the Office of Personnel Management. In most instances agencies must justify the approval on grounds that they are cutting jobs, reorganizing or shifting their workload.

(2) The decision to offer early retirement is strictly a management option. It is not an employee entitlement. Your agency can target early-out offers (just as it does buyout offers) to specific groups of workers by agency, division, occupation or location. You can ask for an early-out, but you can't demand one.

(3) Early retirement is limited to employees who are at least 50 with at least 20 years of federal service, or those who have at least 25 years of service, regardless of age.

(4) While the annuity is immediate, it will be reduced by a factor of 2 percent for each year the retiree is under 55 for employees retiring under the Civil Service Retirement System. While that penalty seems harsh to many federal workers, it is mild by private-sector standards. In many private retirement plans, a much higher penalty is applied to people who retire before they are 65.

The early-out program was made safe by language inserted in the Treasury-Postal Service-General Government Appropriations bill by Rep. Steny H. Hoyer (D-Md.). The giant money bill has been signed into law.

Hoyer's plan--outlined in the Sept. 17 Federal Diary--saved the early-out program in most agencies. Had it not been approved, agencies--as of Oct. 1--would no longer have been able to target early-outs to employees, occupations or locations where they were needed. Instead the early-outs would have been open to any worker meeting the age and service requirements. Broadening the program that way, most agency officials say, would have killed it for most agencies.

Bottom line: Early-outs no longer must be reapproved each year by Congress. And agencies--not employees--will determine who gets an early-out offer.

Buyouts

Buyouts are often linked to, or confused with, early-outs. They, too, are a management tool, which means that agencies decide who gets one. In most cases the maximum buyout payment is $25,000 before deductions. Generally speaking, employees who take buyouts and return to government service within five years must repay the full (gross) amount of the buyouts. Agencies with buyout authority are: Defense, Internal Revenue Service, National Aeronautics and Space Administration, Energy, Nuclear Regulatory Commission, Architect of the Capitol, Government Printing Office, Bonneville Power Administration, General Services Administration and two Treasury Department units, the Office of the Inspector General for Tax Administration and the Chicago office of the Financial Management Service. The Agriculture Department also has buyout authority, but its maximum payment is limited to $10,000.

Pension Offset

Rep. William J. Jefferson (D-La.) has picked up a record 192 co-sponsors for his legislation that would modify the impact of the so-called Government Pension Offset law on Social Security benefits due to federal retirees. Under the law, the spousal Social Security benefit of people who draw their own civil service annuity can be reduced and often eliminated. Jefferson's bill would allow retirees to receive a minimum of $1,200 a month in combined benefits; offset provisions would be applied to amounts above that level.

Opponents of the offset legislation have never generated much congressional interest until this year. Jefferson credits an intense lobbying effort by the National Association of Retired Federal Employees with helping produce a bumper crop of co-sponsors.

Mike Causey's e-mail address is causeym@washpost.com

Tuesday, Oct. 5, 1999