Life After Government: The Big Picture

The federal workforce is aging. Baby boomers who came into the government en masse in the 1960s and '70s are nearing the end of their service, and the government is scrambling to fill their spots.

The retirement rate across government has been steadily rising over the past five years. In fiscal 2001, 43,119 civil servants retired; by fiscal 2004, 55,769 had done so, according to data from the Office of Personnel Management's Central Personnel Data File. For fiscal 2005, with only half of the year tabulated, already more than 30,000 employees have decided to end their federal careers. If retirements continue for the year at this rate, more than 61,000 employees will call it quits this year.

Officials at OPM are forecasting that the retirement rate will continue to increase, peaking around fiscal 2008 or 2009.

As yet, however, the long-feared "human capital crisis" resulting from the exodus has yet to materialize on a broad scale. Agencies, it seems, are filling the slots of those departing with new hires pretty readily.

"We have been able to show that over the last three years as the number of retirements have picked up, we've been able to recruit across the broad spectrum," said Nancy Kichak, OPM's chief actuary and head of retirement policy. "We're hiring young folks; we're hiring [middle-aged people]."

Kenneth Glass, director of retirement benefits at the National Active and Retired Federal Employees Association, agrees.

"They've been talking about brain drain since 1970 and they probably talked about it before that, too," said Glass. "There's always somebody down there who is capable, and when somebody retires, here's the pupil" to learn their job.

While the growing retirement rate may not cripple agencies, it does change the face of the federal government. According to OPM statistics, the average age of an employee in 1994 was 43.6; by 2004, it was 46.4.

As that age continues to increase-as it's expected to do for at least the next few years-there's cause for concern. Under standard civil service rules, employees can retire as early as age 50 if they get a special early-out offer from their agency. For most workers, though, the first real opportunity comes at age 55. OPM's data shows that in fiscal 2004, the average age of voluntarily retiring employees was 60.4.

OPM officials also say retirement rates typically have been strongly tied to the country's economic situation. When things are better, more employees retire; in worse economic times, they hang on. So whether a mass exodus develops in the next few years depends on the overall performance of the economy as much as the average age of federal workers.

Suzanne Fuller, a managing director at Global Lead, a Baltimore management consulting firm that contracts with various agencies on human resources issues, said that agencies are focusing their efforts on employees with critical skills.

For "those that they really feel will continue to add value because of their institutional knowledge, [agencies] are trying to do things to retain them," Fuller said.

Some agencies are easing the pain of retirements by using the last months that employees work to train newcomers, she said. Others are bringing former employees back directly after retirement in consulting arrangements.

"It's win-win," Fuller said. "If you think about how [agencies] manage what is perceived to be a mass exodus, [this] is one of the strategies that many of them are using so they don't lose that institutional knowledge."

On the other side of the equation, thousands of employees already need to start considering what their retirement will look like, in terms of finances and lifestyle. OPM officials say employees should visit benefits specialists in their agency five years before they think they will retire because some benefits, such as health care, require at least five years of enrollment to be carried over into retirement. Employees also need to regularly check with their agencies to ensure that their paperwork is in order, such as designations of beneficiaries, documentation of salaries from all agencies where they have worked and credit for military service.

Every day for the remainder of this week, the Life After Government series will address issues for future retirees, such as what time of year to retire, what to do with your Thrift Savings Plan account, whether to hire a financial planner, and transitioning into the private sector.

For more information on retirement planning, including news updates, comprehensive Web links and a roundup on retirement-related legislation, see GovExec.com's new Life After Government section.

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