Buyout a one-time offer, employees are warned

WASHINGTON — WASHINGTON -- Federal employees are being advised to carefully consider the buyout package that will be offered under the Clinton administration proposal to reduce the size of the federal work force.

"If you don't take it then you're out of luck," Mike Orenstein, spokesman for the Office of Personnel Management, said this week. "Many employees are under the impression that if enough people don't take it, then the government will sweeten the pot."


But those workers are mistaken, Mr. Orenstein explained. "It is a one-time offer that will not be put back on the table."

The administration, acting on a National Performance Review recommendation that calls for a 12 percent reduction in the federal work force, announced the buyout plan late last week.


Cash payments for early retirees would begin the buyout process, according to a White House briefing document.

Under the administration proposal, each government agency has much leeway in deciding when to begin the three-month "window" when employees can take lump-sum severance packages as they leave federal service. The agencies also can decide who among their ranks can take the early retirement option.

Congress must approve any early-out plan, which the administration has included in its Federal Workforce Restructuring Act of 1993. The Office of Management and Budget would review each agency's tailored scheme for offering the "separation incentives," as the White House has dubbed them.

Employees can calculate how much they would be offered under the plan by following this formula:

* For each of an employee's first 10 years of service, the worker could earn one week's pay at the most recent pay scale.

* For each year of service beyond the first 10 years, the employee could earn two weeks' pay at the most recent pay scale.

* For each employee over 40 years old, the total sum of the severance package would increase by 10 percent.

The cap for any severance package would not exceed $25,000, even if all those tabulations add up to thousands more in expected compensation.


The government would issue the employee taking the buyout a check for a lump sum, and employees would be taxed on the boost in income during the year the payment is received. The payment cannot be issued incrementally over several years.

National Performance Review staffers have sought to keep some continuity in the quality of service by having some employees who take the buyout stay on for a while. Under the plan, an agency can decide to delay any employee's departure for up to two years.

Federal employee unions mostly praised the buyout plan, which is modeled after those being offered in the private sector.

"President Clinton made good on his word," said Robert Tobias, who heads the National Treasury Employees Union.

The buyout plan eases the pain of staff reductions, said Mr. Tobias, who also lauded the White House's offer of retraining assistance to departing workers.

He said retraining assistance "will allow employees to acquire skills unrelated to their current jobs, which will better prepare them for the changing job market."


The buyout proposal calls for all three-month "windows" to be closed by Sept. 30, 1994. But Mr. Tobias expressed hope that the "windows" could be extended into fiscal year 1995, so as not to strain agencies that must come up with both full-year salaries and early retirement payments in the same budget cycle.