This is also going on at the state level.  I am told in Washington State, the Governor has talked of cutting state workers and teacher salaries in order to deal with the huge deficits.  I expect it will hit most everyone, government or not, who isn’t working in certain industries, that have been making out like bandits, socking away investments and savings, the past decade.  -GFS

 

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Federal Workers Delaying Retirement Because of Economic Crisis

By Steve Vogel
Washington Post Staff Writer
Monday, January 12, 2009; 6:21 PM

After 31 years of federal service, Cynthia Bascetta was set to retire.

In preparation for leaving her job with the Government Accountability Office, she and her family moved last year from Arlington to Fredericksburg, Va., drawn by the lower cost of living and no longer in need of a short commute to work. She informed her managing director of her intent to leave federal service in January.

Well, January has arrived, and Bascetta is still at her desk. After the bottom dropped out of the economy last fall, Bascetta, director of Health Care at GAO, reconsidered her plans to leave a job she still enjoyed. “It just didn’t seem like a very good time to stop working,” she said.

Now Bascetta is taking the commuter train from Fredericksburg to get to her job at the GAO, in downtown Washington.

Bascetta, 56, is not alone. Some of her older colleagues at the GAO have also changed their plans because of the economic crisis and tumbling retirement accounts, she said. “At least two people here who were thinking of retiring can’t, because they’ve lost too much of their children’s college funding,” Bascetta said.

Across the federal government in the last several months, fewer employees have been retiring than previously projected. “We are seeing a decline in the rate of retirement,” said Nancy Kichak, associate director for Strategic Human Resources Policy for the Office of Personnel Management. “We think it’s driven by the economy.”

Retirements of federal workers in the third quarter of fiscal 2008 numbered 12,013, down about six percent from the same quarter a year earlier, according to OPM figures.

In recent years, federal officials have been bracing for a wave of retirements brought on by the aging of the federal workforce — the “retirement tsunami,” as Lynn A. Jennings, executive vice president for the Council for Excellence in Government, puts it.

OPM has projected that close to one-fifth of the federal government’s full-time permanent workforce will retire over the next five years, and that 36 percent of the Senior Executive Service will retire by 2012.

“Our projections are going to be changing,” said Kichak. Revised figures are expected by later this month or early February.

Despite the slowdown in retirements, Kichak said the increasing average age of the federal workforce — 46.2, up from 41.6 two decades ago — means that a substantial portion of the government workforce will be retiring later this decade. “They may delay it a little, but people are just plain not not going to retire,” said Kichak.

OPM has been expecting a peak in retirements between 2008 and 2010, Kichak said, and that has not changed. “We still think we will peak between 2008 and 2010, but the peak will be lower,” she said.

Jennings said hopes of better times for the federal workforce under the Obama administration may be contributing to a decision by some to put off retirement. “Given the economic realities and the excitement over the Obama administration, we may not see the tsunami,” said Jennings.

“The economic turmoil certainly changes that equation, as does the change in administration,” said Max Stier, president and CEO of the non-profit Partnership for Public Service.

Stier added that the aging of the federal cohort points inexorably to the departure of a large number of retiring federal workers. “At some point, we’re going to be seeing people leaving. I don’t think there’s any question we’re seeing a substantial exodus of talent.”

They include people like Mary Levy, who retired Jan. 2 as division director for the General Services Administration’s Consumer Information and Education office after 35 years of government service. Leaving the federal government after so many years was a hard decision. “It’s become part of who I am,” Levy, 60, said of her job. “I’m a wife and a daughter and an aunt, and I’m a federal employee.”

The economic downturn did give her pause. “It certainly made me stop and think,” said Levy. “Fortunately, I’m covered under the old civil service system. If I were under the new system, it would probably be a deterrent.”

Retirees covered by the old system receive a defined benefit based on their years of service. Workers covered by Federal Employees Retirement System (FERS), which was introduced in 1987, receive some of their benefits from a thrift savings plan similar to a 401 k plan, and are therefore more vulnerable to the decline in the stock market.

“They may be less inclined to retire these days,” said Jennings.

“The economic downturn was something that gave me second thoughts,” said Susan Jacobs, who retired Dec. 31 from the Office of Federal Housing Enterprise Oversight, and is covered by FERS. “I wanted to be sure that I was sure.”

How much of an impact the economic crisis will have on federal retirements, and for how long, is unknown. “We’re just like everybody else,” said Kichak. “We don’t know when the economy is going to get better.”

Despite the slowdown in retirements, federal agencies need to continue efforts to combat a feared “brain drain” as experienced employees leave the service, Kichak said. “Those things are things we still need to be working on,” she said.

Don Drach, 59, who retired January 2 as director of international relations for the GAO after 28 years in government service, helped develop a “knowledge transfer program” to retain institutional knowledge and relationships.

“People feel an obligation not just to leave, but to leave it in good shape,” he said.

Though she has delayed retirement, Bascetta has continued to prepare her staff for her departure. “The last six months, I’ve been much more conscious of not just giving comments, but trying to explain my thought process,” she said.

Retirement remains a viable option for her because she is covered by the civil service system. “If I were in the new system, I could not retire,” she said. Bascetta now thinks she will likely retire next January, a year later than intended.

For Bascetta, there is consolation over the fact that she now faces a two-hour door-to-door commute from Fredericksburg via Virginia Railway Express versus her old 20-minute drive from Arlington. “It turns out I love the train,” she said.

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