Retirement wave may be smaller than expected

Federal retirement rates won't be much higher in coming years than in the recent past, according to a new General Accounting Office study.

An estimated 1.8 percent of federal employees will retire each year from 1999 to 2006, up from 1.3 percent per year from 1991 to 1998.

For more than a year, GAO officials have been warning agencies of a pending retirement wave. About 493,000 people, or 31 percent of the federal workforce, will be eligible to retire by 2006. But GAO's new study, requested by Rep. Joe Scarborough, R-Fla., estimates that only half of those people, or 15 percent of the workforce, will actually retire between 1999 and 2006. The retirement rate from 1991 to 1998 was 11 percent.

"The overall annual retirement rate that we estimate-about 2 percent per year-does not appear overwhelming, but it represents a major workforce planning challenge," said GAO's report, "Federal Employee Retirements" (GAO-01-509). "The challenges facing the federal government from retirements over the next five years make it imperative that agency officials act promptly to ensure their workforces will be adequate in the future to efficiently, economically and effectively deliver products and services to the public."

The study shows that employees eligible to retire are waiting longer and longer to actually leave government service. While 40 percent of the federal employees who became eligible to retire in 1988 retired immediately, only 21 percent of employees who became eligible in 1997 retired that year. "There is a consistent downward trend in the likelihood of employees retiring within the first few years of eligibility," GAO said.

GAO also noted that the number of people who will actually retire by 2006 is similar to the number of positions that were eliminated during the federal downsizing effort of 1994-1998. Poor workforce planning during downsizing has made it more difficult for agencies to perform their missions, GAO said. Good workforce plans can help agencies figure out how many people with what kinds of skills they will need to perform their work in the future. The plans can also help agencies figure out how to retrain their employees or recruit new employees to make up for employees lost to retirement and attrition, GAO said.

The new GAO study shows that some agencies will lose employees to retirement at a rate lower than the 1991 to 1998 governmentwide rate. Only 7 percent of NASA employees and 9 percent of employees at the Education and Energy departments, the General Services Administration and the Office of Personnel Management will retire by 2006, GAO found.

Other agencies will lose one out of five employees or even one out of four employees to retirement. About 29 percent of Agency for International Development employees, 24 percent of National Science Foundation workers and 23 percent of State Department employees will retire by 2006, GAO said.

Retirement rates vary drastically by occupation as well. While 8 percent of federal electrical engineers will retire by 2006, 30 percent of program managers will retire, GAO projected.

Last week, OPM announced a new Web site with retirement statistics and projections to help executives with their workforce plans, www.opm.gov/feddata/retire.