Early Retirement in the Federal Sector

Early retirement programs may be necessary to meet management objectives and employee needs, but they should be seen as unusual or special provisions that are outside the basic purposes of a retirement system. Many Federal personnel can retire with immediate benefits even earlier than age 55, the normal civil service retirement age. Some are allowed to retire early under the general presumption that their duties need to be performed by a young and vigorous workforce; these include the military, Foreign Service, law enforcement and firefighter personnel, air traffic controllers, and others. GAO questions whether 20-year retirement is necessary for all military personnel. Career military personnel spend more time in support-type functions than in combat-related activities. The 20-year retirement policy for Foreign Service personnel, for Federal law enforcement officers and firefighters, and air traffic controllers is also questionable. The annual cost for early retirement benefits is 61 percent more than what the cost would be to provide the same employees with regular benefits. Maintaining a trained, alert, and vigorous workforce should be resolved by using available personnel management techniques and special rates of pay. Employees who cannot perform satisfactorily before the regular retirement age could be reassigned to less demanding duties or, as a last resort, retired on disability or workers' compensation. Federal employees may retire on disability at any age if they have completed at least 5 years of service. Benefits may have been paid unnecessarily to many retirees. Legislation should be enacted to encourage retention of potentially productive employees, who are being retired on disability, by requiring agencies to assign such employees to vacant positions in jobs they are capable of performing. A recent Office of Personnel Management administrative change has increased the disability claim rejection rate to around 40 percent. The recent voluntary early retirement now possible under major agency reorganizations has helped very little with the staffing problems it was intended to correct and is expensive.