Army Materiel Command

In a December 1992 report (GAO/NSIAD-93-28BR), GAO discussed the responses of employees at the Army Materiel Command to 10 hypothetical early retirement incentives and the increased rate at which the employees might have left under each of the incentives. This report estimates the changes in government costs that would have resulted from implementing each of the initiatives. It also estimates the effect that each of the incentives would have had on offsetting voluntary separations at the Army Materiel Command had it pursued its initial 10-percent force reduction goal.

GAO found that: (1) the cost savings from additional retirements would have ranged from $100,000 to $250,000 per retiree if AMC did not replace the retiree; (2) factors affecting the costs of retirement incentives included installment payments, salary, annuity, and cash bonuses; (3) AMC could have reduced the number of involuntary separations it made to meet its 10-percent reduction in force if it had used some retirement incentives; and (4) savings from inducing employees eligible for normal retirement to retire could have been smaller than for early retirees because of the greater likelihood that some employees would have retired within a few years anyway.