Voluntary Early Retirements Under the Civil Service Retirement System

Legislation was enacted in 1973 allowing the Civil Service Commission, now the Office of Personnel Management (OPM), to authorize agencies undergoing major reductions in force (RIF) to allow employees who were not affected by the RIF to retire early. The basic purpose of the law was to reduce involuntary separations and thereby save the jobs of younger workers who might otherwise be dismissed in the RIF and who would not be eligible for immediate retirement benefits. Other objectives were to spread the separations over the affected organizations and to diminish the effect of the RIF on local economies. However, as the program has evolved and been administered, it has often been used to solve personnel problems that good, sound management actions could have solved in other ways. Substantial changes occurred when legislation, which became effective in 1979, permitted early retirements in organizations where no employee was being involuntarily separated. Currently, an early retirement authorization may be granted even though it is known beforehand that such authorization would not result in a single job savings. GAO believes early retirement authorizations should be granted only when it can be clearly shown that they will significantly alleviate staffing problems, and as a last resort when all other management attempts to correct the situation have been exhausted. The early retirement program needs overhaul. As a minimum, the law should require agencies to demonstrate that early retirements will correct these difficulties before authorizations are approved and disallow early retirements if they do not save other employees jobs. The current law and implementing regulations which allow early retirements to be authorized even though no employees are being separated must be changed.