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Report shows jump in use of incentive payments

OPM says agency spending on three different kinds of bonuses increased 37 percent between 2007 and 2008.

A new report shows that the amount federal agencies paid in relocation incentives -- to compensate employees asked to move from one area to another -- nearly doubled from 2007 to 2008.

The Office of Personnel Management report shows than the rise in relocation bonuses, often to law enforcement officers and supervisors, made up a sizable portion of the 37 percent overall increase in the amount paid out for what are known as "3Rs" incentives for relocation, retention and recruitment.

Such increases have led OPM to ask agencies to review their use of the incentives. The total number of bonuses handed out increased by 7,027 between 2007 and 2008, to 39,511. The dollar amount spent on them went up by more than $77 million, to nearly $285 million. Citing recent labor market conditions, OPM Director John Berry asked agencies to make sure incentives were justified.

All three categories of incentives saw increases from 2007 to 2008. On a percentage basis, relocation incentives went up the most - nearly 86 percent, or about $20 million. Retention bonuses remained the most popular type of incentive, with a $28.9 million increase from 2007 to 2008.

According to the report, the Defense Department awarded the most incentives, handing out more than 19,000 bonuses totaling more than $135 million. The Veterans Affairs Department was second, with more than 9,000 incentives totaling almost $54 million. Other departments near the top of the list included Justice, Health and Human Services, and Commerce.

According to the report, 34 percent of all retention incentives were paid to employees in the health care field, including nurses, medical officers and pharmacists. For recruitment incentives, the most common occupation was patent examiner, which represented 11 percent of all such incentives.

Relocation incentives went to a mix of criminal investigators, contract officers, administrators and engineers.

Two of the agencies that manage federal benefits handed out some of the largest incentives. According to the report, OPM itself handed out five incentives averaging $23,600, including one relocation incentive of $70,000. The Federal Retirement Thrift Investment Board gave out two awards, totaling $54,500 -- including a $38,650 retention incentive to its executive director. Both made the top five list for largest average incentive payments.