Fedweek

The Obama administration has proposed boosting the maximum buyout payment for federal employees to $40,000, saying that the $25,000 maximum in effect since the first buyouts began is no longer a sufficient incentive. The request came from the Defense Department as the congressional defense committees are beginning to write the annual DoD authorization bill, which serves as the main vehicle for changes in personnel policies at DoD as well as, in some cases, government-wide changes. DoD said that since buyouts were first authorized, consumer prices have increased 89 percent and GS salaries have increased 71 percent. “While $25,000 was considered an appropriate amount to induce employees to voluntarily separate in 1993, it cannot possibly provide the same incentive in current dollars. Employees are clearly influenced by prevailing economic conditions when making financial decisions,” it said in its request. The amount would have to be more than $47,000 to keep up with inflation or more than $42,000 to keep up with salary growth since then, it added, saying it settled on $40,000 as an amount rounded down from the lesser amount. DoD first floated such an increase last summer in a discussion draft document of personnel reform ideas, but the new request is more formal, as recommended changes in law.