FEDweek

Decisions in Limbo on Early Out, Buyout Offers for Federal Employees

The limited progress so far in Congress on budget issues has left uncertainty regarding agency funding levels for fiscal 2018, in turn leaving in limbo the prospects of early retirement and buyout offers.

Many agencies have raised the prospect of making such offers to comply with Trump administration budget proposals. However, budget measures being drafted in Congress are not as restrictive on spending as was the White House budget plan, leaving agencies uncertain whether they will have a reason to make such offers. So far only the EPA has conducted a round of buyouts and early outs, while the SSA opened a routine annual early retirement window. In anticipation of potential cuts, some agencies have restricted hiring for certain positions, particularly in headquarters and administrative positions; savings from not filling positions could in turn lessen the need for retirement and buyout incentives.

From a budgetary viewpoint, it makes the most sense for agencies to make such offers early in a fiscal year, so they can recoup the upfront costs during the year by not filling the vacancies created. However, given the budgetary tangles facing Congress, it is increasingly unlikely that decisions on funding will be made until months after the fiscal year begins.

Also still to be decided is whether Congress will enact the administration’s call to raise the buyout maximum from $25,000 to $40,000 government-wide. Currently, only DoD can offer the higher amount and none of the legislation pending in Congress would broaden that policy.

The most likely vehicle for such a change would be the DoD authorization bill, which typically contains some government-wide personnel policy changes. The House has passed its version, providing for only an extension of the higher amount at DoD. The Senate version that emerged from the committee level was silent regarding buyouts, but an amendment could be offered there in floor voting. It still could be some time until that issue is resolved, as well.