Provide Incentives to Encourage Voluntary Separations Background Throughout the federal government, departments and agencies are being asked to work more efficiently, that is, with fewer resources. To achieve this goal, many organizations are facing potentially massive restructuring and downsizing. Incentives are needed to encourage voluntary separations, thereby reducing or eliminating the need for relocating, reassigning, or separating employees under reduction in force procedures. Need for Change According to the Office of Personnel Management (OPM), voluntary early retirements among eligible employees have dropped from approximately 17 percent in the mid-1980s to 4 percent in 1992. After remaining relatively constant at approximately 36 percent during the same time period, regular optional retirements dropped to 23 percent in 1992.(1) Overall attrition from federal service is at its lowest level since 1973, when OPM began tracking these data. The federal government's recent experience with separation incentives suggests that a large percentage of employees will choose regular or early retirement if incentives are included. The Office of Thrift Supervision (OTS) and the U.S. Postal Service (USPS), in 1991 and 1992, respectively, offered lump sum payments equivalent to six months' salary to persons eligible for either early or regular retirement. In OTS, 38 percent of early retirement and 53 percent of regular retirement eligibles accepted the offer. In USPS, 27 percent of early retirement and 43 percent of regular retirement eligibles accepted. In 1993, Department of Defense (DOD) employees were offered the lesser of $25,000 or the amount the employee would otherwise be entitled to receive as severance pay. About 20 percent of early retirement eligibles and 40 percent of regular retirement eligibles have retired from DOD recently.(2) Cross References to Other NPR Accompanying Reports Improving Financial Management, FM13: Charge Agencies for the Full Cost of Employee Benefits. Transforming Organizational Structures, ORG01: Reduce the Costs and Numbers of Positions Associated with Management Control Structures by Half; and ORG02: Use Multi-year Performance Agreements between the President and Agency Heads to Guide Downsizing Strategies. Endnotes 1. Office of Personnel Management, "Retirement Trends With and Without Incentives: Summary Through July 30, 1993," p. 1. (Unpublished.) 2. Ibid., pp. 1-3.
You can attach your comments to this document. If you enter your email address in the empty box below and click on the submit button, you will receive via email a form that allows you to link your views to the NPR hypertext.
Subscribe Unsubscribe No Action