Voluntary Early Retirements in the Civil Service Too Often Misused

Under the civil service retirement system, employees with 30 years' service can elect to retire at age 55. In certain circumstances, they can voluntarily retire earlier. Early retirements were meant to open up jobs for younger employees who would otherwise be dismissed during agency reductions or reorganizations.

The Office of Personnel Management (OPM) is permitting too many employees to retire earlier than they normally could. Such retirements may be appropriate if they prevent younger employees from being laid off, but usually this is not the case. GAO found that: (1) agencies are not considering and exhausting other management techniques for solving staffing problems before turning to the early retirement program; (2) early retirements are not restrictive enough to insure a high probability of job savings; and (3) under the current program employees can retire early even though none of an agency's employees are facing involuntary separation. In some cases, agencies' estimates of the impact of reductions were poorly documented and proved to far exceed the eventual outcome. Early retirements in these agencies resulted primarily in new hiring, not job savings. GAO found a tendency for agencies to overstate the benefits derived from early retirement authorizations. GAO estimates that early retirements cost at least $109 million in fiscal year 1980. OPM has begun to examine more closely agency requests for early retirement authorizations. However, its basic criteria for approval remain unchanged.

Recommendations

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