The giant Department of Veterans Affairs has joined the ranks of more than a dozen agencies that can pay employees up to $25,000 to quit or retire.

The president signed the congressionally approved buyout into law yesterday.

This comes as a happy surprise to many workers in downsizing VA. It ranks third (after the Defense Department and U.S. Postal Service) in number of employees. Earlier this year, key senators flatly rejected VA's request to open the buyout window to help avoid layoffs.

With VA in the buyout club, it means that more than half the federal work force concentrated in certain agencies will be eligible in theory for a VSIP, the government shorthand for voluntary separation incentive payment.

VA, like most other federal agencies, already has the option to offer employees of its choosing the chance to take early retirement. The so-called VERAs (voluntary early retirement authority) make it possible for workers to retire and receive an immediate annuity if they have 25 years of federal service or if they are at least age 50 with at least 20 years of federal service.

Most retirement-eligible federal employees remain under the old Civil Service Retirement System (instead of the Federal Employees Retirement System). Under CSRS rules, regular retirement (with no reduction in benefits) is at age 55 with 30 years, age 60 with 20 years or age 62 with five years of federal service.

Employees taking early-outs have their annuities reduced 2 percent for each year they are younger than 55. Early retirement is not a popular option with federal employees unless accompanied by a buyout. During the Clinton administration, more than 300,000 federal jobs have been eliminated. About 130,000 employees were paid buyouts averaging a little more than $24,000. Most buyouts were aimed at Defense Department civilians, and virtually all of the buyout-takers were also eligible for regular or early retirement.

Congress rejected a White House request this summer to reauthorize buyouts on a government-wide basis. But it has approved buyout authority for the following agencies (or in some cases, parts of agencies).

The Defense, Agriculture and Energy departments, the National Aeronautics and Space Administration, the Nuclear Regulatory Commission, the Architect of the Capitol, the Government Printing Office, the Bonneville Power Administration, the Internal Revenue Service, the General Services Administration and two small units within the Treasury Department--the inspector general for tax administration and the Financial Management Service.

VA originally proposed that its buyout authority run through Sept. 30, 2004. But the surprise congressional approval appears to limit it to Dec. 31, 2000.

Who Gets Them?

Many federal workers are confused about the ground rules for buyouts and early-outs. The bottom line is that both are a management decision. Anybody can ask for one, but nobody has the automatic right to either option. Both buyouts and early-outs can be targeted to specific jobs, grade levels, units and sub-units of agencies, and geographic locations.

How Much?

Buyouts are based on length of service, with the maximum payment limited to $25,000. That $25,000 is subject to normal deductions (such as federal and state taxes). Depending on which retirement plan the employee is under--CSRS or FERS--and what state the employee lives in, the typical $25,000 buyout turns out to be worth about $14,000 to $16,000 when paid out.

Generally speaking, workers who come back into government jobs must repay the full amount of the buyout--not the amount they actually received.

In most instances, agencies that offer buyouts can't fill that job, or if they do, they must eliminate a slot elsewhere.

ATF Union Vote

Professional field office employees of the Bureau of Alcohol, Tobacco and Firearms have voted to make the National Treasury Employees Union their exclusive bargaining agent. With the 70 new members, the independent union now represents about 750 ATF workers.

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

Thursday, Dec. 2, 1999