- The Washington Times - Tuesday, April 29, 2008

Remember when old what’s-his-face took a buyout? Chances are it’s been 10 or more years since the retirement party.

Buyouts were all the rage in the 1990s as the government looked for a painless way to downsize and farm out more work to the private sector. Tens of thousands of feds — mostly middle-management men in Defense agencies — took regular or early retirement for a maximum $25,000 payout.

When the buyout period started, agencies had to jump through a series of legal and bureaucratic hoops before Congress approved them. Most were agency-specific and for a limited time.

Now, agencies can offer the payments and early retirement for a variety of reasons, such as downsizing, right-sizing, realigning, shifting mission or avoiding layoffs. Although the process has become easier, few employees now are offered buyouts and fewer — thanks to inflation — are taking them.

The original buyouts were targeted at blue-collar workers then expanded to so-called “overhead” jobs that could be shifted to the private sector. Also, $25,000 went a lot further in the mid-1990s than it does today.

After deductions, someone who accepts the buyout amount of $25,000 can expect to take home between $15,800 and $16,200. The range depends upon the person’s tax bracket, state and local taxes and whether the employee is under the old Civil Service Retirement System or the new Federal Employees Retirement System.

Back in the day, a buyout could buy someone a nice car. Not any longer.

Buyouts were big news in the 1990s because Congress had to approve each one, while the media and federal unions could track them easily. Now, buyouts are more targeted. In fact, someone could be working in an agency offering voluntary separation incentive payments and/or voluntary early retirement authority and not know it.

Although buyout action has slowed, many feds suspect something better — or worse — is on the horizon. Hope for something better, spread mostly by false Internet or e-mail reports, accounts for rumors that a supersized buyout plan is in the works. It’s not. Another rumor is that Congress plans to force feds to either convert from the old and more generous CSRS program into FERS or retire. Also not true.

The fact is that Congress isn’t working seriously on any legislation that would directly help or hurt federal or postal workers. No changes in the retirement systems, or in the sizes of buyouts, are on the horizon. That includes the long-running effort to modify or eliminate rules — called windfall and offset — that can reduce a CSRS employee’s Social Security benefit, or wipe out the Social Security spousal benefit because of someone under the old CSRS program. Windfall and offset will be back on the agenda, but they aren’t going anywhere until next year. If then.

Dental benefits

Thousands of federal and postal workers have signed up for optional dental and/or vision insurance. Dental coverage in the federal health program is weak, as it is in most private-sector plans.

The optional coverage, for which employees pay the full premium, was designed to give feds and family members something to smile about, but a growing number of feds have been disappointed by what is covered and not covered, or with the red tape involved in getting claims paid.

Look for Congress — whose members, spouses and children also are covered — to re-evaluate the program next year.

The bad news is that no big benefits are in the offing during this election year. The good news is that despite the presidential candidates’ grumbling about bureaucracy and the “mess” in Washington, nobody has a plan to go after any federal job perks.

What Congress or the next president could do next year is reconsider which medical procedures will be covered by the Federal Employees Health Benefits Program, extended family-leave benefits and coverage of domestic partners of feds and retirees.

Mike Causey, senior editor at Federal News Radio AM 1050, can be reached at 202/895-5132 or mcausey @federalnewsradio.com.

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