Publisher's Perspective

Although a wave of federal employee retirements has long been predicted due to the aging of the baby boom generation, those looking for the wave might be facing the wrong direction.


The conventional wisdom in federal personnel circles long has been that there is a large surge of retirements waiting to happen, with negative effects on the government’s ability to conduct its business as experienced employees leave en masse. At one point the threat even was being called a "tsunami."

The anxious retirement forecasters have had some explaining to do as year after year no such wave hits. In their view, the economic downturn artificially delayed many of those would-be retirees, due to losses in the value of investments and home value—and in some cases, poorer outside employment prospects after leaving government. That will only make the upcoming wave even larger, they warn.

The expectation of a retirement wave has been driving various policy decisions for years, including most recently earlier this year the enactment of "phased" retirement authority under which some retirement-eligible employees will be allowed to switch to part-time work and draw both a partial salary and a partial annuity, without offset. It also was behind the numerous waivers of the offset requirement that have been targeted at certain agencies and certain occupations, as well as a government-wide authority enacted in 2009 allowing rehiring without offsets for a limited time.

However, the latest figures project that separations for retirement will remain relatively level over the next five years.

The projections from OPM, contained in a report on an unrelated topic (an OPM-commissioned study of the federal charity drive), show that retirements — excluding those from the self-funding U.S. Postal Service — actually will slip slightly each year through 2016, from an estimated roughly 59,500 this year to about 52,000 in 2016.

Those numbers are about in line with OPM data showing actual retirements going back nearly a decade that also exclude the postal service. The projected 2012 figure is about the same as the previous peak calendar years of 2005 and 2007.

A look at those figures shows that the retirement wave actually may already have happened. Between 2004 and 2008 retirements were in the 53,000-59,000 range, before dropping to about 43,000 in 2009.

A separate set of OPM data based on fiscal years, not calendar years, and that does include the postal service, similarly shows a peak around the same time, with retirements above 90,000 each year in 2004-2007 then dropping, with a 2011 level of about 83,000.

The numbers so far this (calendar) year show retirements running ahead of that pace, but many of those again are associated with the postal service, which has been offering round after round of early retirement deals. Losses on the postal side don’t impact the brain drain factor that is behind the retirement wave anxiety, however. What USPS is trying to do is get rid of excess capacity it had built up to handle mail that no longer is coming in at past volumes, and likely will never return to those volumes even as the population grows.

One added factor to remember is that the most recent self-assessment by OPM of its retirement projections, released four years ago, showed that historically it consistently over-estimates the number of retirements. So the numbers ahead may well be below even the modest level of the newest projections.

Or, they could end up higher. USPS is not the only agency with budgetary concerns, and if the country starts shrinking government to save costs, early retirements are likely elsewhere, as well. Some agencies already have been making such offers, although up to now they have been fairly limited in scope.

Maybe it’s time for the government to make calm, reasoned plans to retain — at least for a while and at least part-time – those employees whose skills are truly vital, find ways to pass their knowledge along to other workers on the certainty that eventually they will leave, and use vacancies being created to restructure agencies to best meet the missions, resources and technology of these times.

That’s a lot less attention-drawing than running around warning about a catastrophe that never seems to come, but it’s better for all involved.