A federal pay raise ultimately is determined by action or inaction in a separate bill, the general government appropriations bill. Image: ImagePixel/Shutterstock.com
By: FEDweek StaffThe Senate’s version of the annual DoD authorization bill endorses a 2 percent federal employee raise in January while seeking to increase the maximum buyout payment for DoD employees from $25,000 to $40,000.
The measure “authorizes funding to support a 4.5 percent pay raise for military members and a 2 percent pay raise for DoD civilian employees,” according to a summary from the Armed Services Committee. That would break the often-followed but informal practice of providing equal raises to the two groups in the name of “pay parity.”
While the language applies only to funding a raise for employees of DoD, it sends a signal of intent regarding the raise by endorsing the amounts recommended by President Biden in his budget proposal earlier this year. The House version of the bill is silent regarding the federal employee raise, although it does endorse the 4.5 percent figure for military personnel (it further would boost pay for junior enlisted personnel by 19.5 percent, a provision not in the Senate version).
A federal pay raise ultimately is determined by action or inaction in a separate bill, the general government appropriations bill. That bill as it has passed through the House committee level remained silent on the issue, a step toward allowing the White House’s recommendation to take effect by default—another practice commonly followed in setting federal employee raises. The Senate counterpart committee has not started writing its version of that bill.
The summary of the Senate DoD bill meanwhile says the measure would increase the maximum amount of voluntary separation incentive pay—the formal term for buyouts—to $40,000 at DoD. The general buyout maximum has been $25,000 since that authority first was created in the 1990s, although the figure was $40,000 at DoD for several years until it reverted to $25,000 in 2021.
Relatively little-used in recent years, buyouts are designed to avoid the need for RIFs in downsizing and reorganizing situations, and require the recipient to agree not to work for the government for at least the next five years, among other restrictions. They commonly are paired with early retirement offers although there is no requirement that the two be offered together.
The earlier buyout increase at DoD was initiated late in the Obama administration on grounds that $25,000 is no longer a sufficient incentive, particularly for employees not eligible for retirement under even early retirement rules. The boost was seen at the time as a potential precedent for raising the amount government-wide, and though the Trump administration several times recommended it, Congress never approved it.
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See also,
How Do Age and Years of Service Impact My Federal Retirement
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