Retirement Myths: Is Congress Considering Offering a Buyout to Federal Employees?

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By on September 9, 2013 in Current Events, Retirement with 35 Comments

This article is part of a series dealing with common misconceptions about federal benefits and retirement.  These articles are written by John Grobe and Ehren Clovis.

Myth-conception:  Congress is about to pass a law that will offer generous VERA (early-out) and VSIP (buy-out) terms.  This is designed to A) drastically reduce the number of CSRS employees; or B) to reduce the federal workforce by some specified target (e.g., 10%, 20%, etc.).  

Reality:  There is not now, nor has there been in the past, any serious attempt to sweeten the pot on either VERAs or VSIPs.

We all want to believe that something good will happen to us; and often it does, just not when it comes to our federal employment.  You have to look back a few years to find the last “good deed” done for federal employees by Congress.  That deed was allowing FERS employees to credit unused sick leave towards their length of service in the computation of their FERS pension.  Since that time we have had salaries frozen and been subject to numerous threats to other benefits.

The saying, “if it sounds too good to be true, it is” applies here.  There have been rumors that promised a $75,000 buy-out for federal employees – not so.  There have been rumors that said all who took the early-out would receive credit for an additional five years of service in their retirement computation – also not so.

Even if the rumor sounds official, it isn’t.  Ten or so years ago there was a rumor that promised both of the items listed in the above paragraph.  The rumor went so far as to list the names of the bill’s sponsors.  A quick check of the Members of Congress at that time showed no Representatives with those names. 

We can take Ronald Reagan’s statement of “trust, but verify” and cut it in half.  “Verify” should be the first thing you do when something sounds too good to be true.  If a bill that offered generous VERA and VSIP terms were introduced in Congress, it would be major news, as Congress usually considers legislation that is against the interest (not in the interest) of the federal employee.  If we see mainstream news sources reporting the introduction, then we can let out hopes rise.  We shouldn’t, however, let them rise too much, as it is a long journey from a bill to a law..

Agencies can request to have John Grobe, or another of Federal Career Experts' qualified instructors, deliver a retirement or transition seminar to their employees. FCE instructors are not financial advisers and will not sell or recommend financial products to class participants. Agency Benefits Officers can contact John Grobe at [email protected] to discuss schedules and costs.

© 2017 John Grobe. All rights reserved. This article may not be reproduced without express written consent from John Grobe.

About the Author

John Grobe is President of Federal Career Experts, a consulting firm that specializes in federal retirement and career transition issues. He is also affiliated with TSP Safety Net. John retired from federal service after 25 years of progressively more responsible human resources positions. He is the author of Understanding the Federal Retirement Systems and Career Transition: A Guide for Federal Employees, both published by the Federal Management Institute. Federal Career Experts provides pre-retirement seminars for a wide variety of federal agencies.

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