Is There a $25K to $40K Buyout in Your Future?
At one point or another, many federal workers have dreamed about what they would do if and when their agency offered them a buyout. For some otherwise dedicated but I’ve-had-it civil servants, a buyout is a decades long dream that seems more realistic and desirable with every birthday and work anniversary.
What’s not to like? Makes perfect sense, right? To you, definitely, but to Uncle Sam maybe not so much.
The problem is that in the past buyouts were almost always teamed with the option to take early retirement. But not anymore. Over the past 10 years a number have offered early-outs (VERAs) for voluntary early outs but haven’t included buyouts VSIPs (voluntary separation inventive payments)in the deal.
Consider: A buyout, $25,000 (in most agencies) requires employees to volunteer to retire/leave during a certain period of time. Makes lots of sense. Especially if you are the potential recipient. Especially if offered around the time the potential recipient (you) had planned or were eligible for retirement. Volunteering to leave during the period designated by their agency would qualify the lucky fed for a 1990s era VERA (voluntary early retirement authority) payment which, after taxes and standard deductions, would be worth $18,000 to $19,000. That’s not enough to purchase what it would have in the Clinton era, when buyouts were born and prospered, but it’s still a nice, unexpected chunk of change for somebody otherwise ready to go. Or for someone who had an even better nonfederal position waiting. But what’s $25,000 or $40,000 to an outfit that prints money? Nothing, right?
So what are your odds?
The Agriculture Department and the U.S. Postal Service are offering VERAs to select employees. But so far no buyouts are included. And the track record when early-outs are offered without a buyout is that few people choose to leave early. When it comes to buyout options, where are you and your agency? If you are looking for answers there are two options: A or B.
A is the short answer; B is more complicated, less fulfilling but likely more accurate.
The short answer, if you have a teeny attention span or your hair is on fire, is “No! Forget about it.” They are going to offer you a $25,000 ($40,000 if you are an Army, Navy, Air Force or other Defense civilian) buyout just to leave? Think about that! They may be well aware that they no longer need your services or want them. But pay you to leave when it’s gonna happen, one way or the other, someday — think about it.
You’ve been dreaming of a buyout, in some cases for years. You may have even been among the many who have either bought into rumors of a pending buyout, in your agency and occupational or geographic group. You may even be one of those people and it’s quite a big club, who started rumors of a buyout hoping it would trigger the real thing. Such people, some true believers, exist. Ask anybody in Congress or the media who deals with federal employment issues.
B, the more complex explanation, is that chances of a buyout are slim and none. So far. That could change. But buyouts have been few and far between in recent years, and then very limited when offered.
Talk of buyouts is back for real and for good reason. USPS, which is prepping (or maybe not) for an influx of November ballots-by-mail, is offering early retirement (but no buyouts) for some nonunion and management personnel. Clerks, letter carriers, mail handlers and other craft employees are not included. But they are looking at a much smaller group to offer VERAs. Some people think the under-new-management Postal Service is streamlining to do the best under trying financial pressures, many of which are caused by outside political actions that make it appear inefficient as a quasi-government corporation.
But it’s actually quite good at its job of providing low-cost, quick service to the public. Ask one of the big delivery companies who often depend on the USPS to do the heavy hauling and lifting to take letter-sized items from Key West to Nome, Alaska, for 50 cents! They would laugh in your face.
Some cynics think the USPS is being setup to ensure that warnings of slow, delayed or crooked elections — because of massive mail-balloting — will be self-fulfilling. That we may know what we got for Christmas before we know who we’ve got going into, or back into, the White House. That’s why their buyout activity, while interesting, doesn’t necessarily give any clues to feds in other agencies.
So what are your odds? Where is all this buyout talk coming from?
Nearly Useless Factoid
By Amelia Brust
In 1889, visitors to the Tolchester Beach resort on Maryland’s Eastern Shore flocked to see the big new attraction: An embalmed whale captured off the coast of Cape Cod. It was big enough for people to stand inside its mouth and even, according to a historical advertisement, have lunch inside it.
Source: Maryland Historical Society