What do D.C. government employees, workers at the National Gallery of Art and federal workers at HUD, Energy or the Pentagon have in common?

* They are in agencies that will be offering the chance to take early retirement between now and Sept. 30. Many federal agencies are downsizing or privatizing their operations. Some will be forced to lay off younger, shorter-service workers unless they can tempt relative old-timers to leave.

Early retirement for most feds means having 25 years of federal service, or being at least 50 years old with at least 20 years of service. Normally, the earliest most of those employees could retire on an immediate annuity indexed to inflation is age 55.

* Lucky feds in a smaller number of agencies will have the best of both worlds--the chance to take both early retirement and collect a buyout worth up to $25,000.

In government talk, an early-out is correctly called VERA (voluntary early retirement authority), and buyouts are VSIPs (voluntary separation incentive payments).

Both buyouts and early-outs are management options. That means the federal agency decides who gets either offer. Congress this year extended buyout authority to some agencies and reaffirmed the right of agencies to determine who gets an early-retirement offer. Early outs and buyouts can be agencywide, or they can be limited to specific grades, jobs or localities.

Early outs and buyouts aren't an exclusive benefit for the so-called baby boom generation. Younger feds--especially those without veterans preference protection--have a big stake in buyouts and early-outs, too. Reason: If lots of older workers--who are virtually fireproof because of seniority and veterans preference protection--can be persuaded to leave, agencies are less likely to have layoffs. During a reduction in force, the general rule is last-hired, first-fired. If downsizing agencies can't get older workers to leave voluntarily, the thirty-something crowd is in big trouble.

Over the past six years, more than 130,000 feds took buyouts. When offered early-outs without a buyout, however, few accepted. But when both buyouts and early-outs were offered, the take rate was very high.

Here's the official, updated list of agencies with authority to offer early retirement and/or buyouts. The early-out or buyout authority is agency-wide unless otherwise noted:

Early-Outs

Housing and Urban Development, Defense Department, Veterans Affairs, District of Columbia government, Small Business Administration (except the Office of Inspector General and all disaster area offices), and the Office of Personnel Management. Excluded from early-outs are OPM personnel in its retirement and insurance divisions, as well as various technical and computer support personnel.

Federal Housing Finance Board, Federal Maritime Commission, Administrative Office of the U.S. Courts, National Gallery of Art (except for the administrator's office), and NASA personnel at the Johnson Space Center in Houston, the Kennedy Space Center in Florida and the Marshall Space Flight Center in Alabama.

The Energy Department's assistant secretary for congressional and intergovernmental affairs and assistant secretary for defense programs, Office of Environment, Safety and Health, Office of Scientific and Technical Information, Office of Hearings and Appeals, Western Area Power Administration, the Bonneville Power Administration and operations and field offices in Albuquerque, Chicago, Nevada, Oakland, Oak Ridge, Richland, Savannah, Ohio Fields and Rocky Flats.

Interior's Bureau of Reclamation and the Treasury Department's Office of the Inspector General for Tax Administration.

Buyouts

The Defense, Energy and Agriculture departments, NASA, the IRS, GSA, Treasury's Financial Management Service, Chicago Regional Finance Center and its Office of the Inspector General for Tax Administration, the Nuclear Regulatory Commission, Architect of the Capitol, Government Printing Office and the Bonneville Power Administration. Dates for the buyout authority vary except for BPA's, which is indefinite.

Buyout, Early-Out Myths

There is a lot of confusion or misinformation around concerning the two options. Here's the deal: The maximum buyout payment is still $25,000. After deductions, that works out to between $16,000 and $18,000 in take-home pay. Buyouts can't be rolled over into an IRA. In most cases, workers who take a buyout and return to government within five years must repay the entire amount--gross, not net.

Agencies decide which workers can be offered buyouts or early-outs. They do not have to offer either to everyone in an agency, or in the same occupation or geographic area. Congress did NOT waive the early retirement penalty. Feds who retire before age 55 will have their annuity reduced 2 percent for each year they are under age 55.

Dental Benefits

Looking for federal health plans that offer the best dental benefits? Welcome to the club. Dental coverage is a top priority for many feds during the open season that runs through Dec. 13. For a look at the best plans, check this space tomorrow.

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

Sunday, Nov. 14, 1999