Federal retirements fall short while hiring booms

About 20 percent fewer federal employees retired in fiscal 2002 than government officials had predicted, the second year in a row that retirements have fallen short of projections.

Office of Personnel Management statistics show that 41,905 full-time permanent employees retired last year, a 2.7 percent retirement rate. Two years ago, OPM projected that 54,174 federal workers would retire in 2002. Actual retirements fell short by 23 percent.

The lower retirement figures suggest that an expected bulge in retirements that threatens to sweep away much of the government's institutional knowledge in this decade has been defused-or at least delayed.

Retirements are down from the last half of the 1990s. An average of 48,600 federal workers retired each year from 1996 to 2000, compared with an average of 41,723 the past two years. In 2001, 41,543 workers retired, about 18 percent below projections. But a larger and larger percentage of workers each year is becoming eligible for retirement or closing in on eligibility. In 1996, 32.3 percent of federal workers had 20 or more years of service under their belts. Now the percentage is 38.5.

While retirements were down last year, the government hired more employees last year than it has in at least the past six years and perhaps more than a decade. Federal agencies hired 135,978 new full-time, permanent workers in 2002, up from 94,161 in 2001. The growth was fueled mostly by the Transportation Department and the Transportation Security Administration, which had hired 43,832 employees by the end of fiscal 2002. Most of these new employees are security screeners at the nation's airports.

"The federal government is in the hiring business," said Max Stier, president of the Partnership for Public Service, a Washington-based advocacy group. "The government has an enormous talent need that is going to exist for some years to come."

Stier said that despite the lower-than-estimated retirements, federal executives and managers need to pay attention to the workforce. "If you have fewer people exercising their retirement right today, there will be more people in the future that have that right," he said. "They are going to leave."

Several factors could be contributing to the dip in retirements. One is the economy-with stock market and Thrift Savings Plan investments reeling and private sector job opportunities down, retirement-age workers may be sticking around until the economy bounces back. Another factor could be that people are living longer and therefore working longer before they retire. A General Accounting Office review in 2001 found that federal workers are waiting longer and longer to retire. Only 21 percent of workers who became eligible to retire in 1997 actually retired that year, compared with 40 percent in 1988.

Employees may also be holding onto their jobs with the hopes that their agencies will eventually offer buyouts of up to $25,000 to encourage them to leave the federal government. Congress recently gave agencies the authority to offer buyouts, though agency officials must justify buyout plans to OPM before offering retirement incentives to employees.

Stier said federal workers also have had a renewed sense of purpose since the Sept. 11 attacks and that the low retirement numbers show that federal workers are committed to their agencies' missions. "Most people who are in government today are here because they want to be here," Stier said.

Other end-of-year statistics include:

• The top 10 jobs for new hires in fiscal 2002 were TSA security screener (35,292); criminal investigator, mainly at TSA (5,105); clerk (4,671); data transcriber (3,677); tax examiner (3,214); contact representative (3,105); secretary (3,046); administrative assistant (2,564); nurse (2,158); and Border Patrol agent (1,967). Besides the TSA jobs, the top jobs for new hires tend to have high turnover every year.
• The Defense Department continued to shed civilian workers in 2002, a trend that has not stopped since the end of the Cold War. Defense's civilian workforce dropped from 612,314 in 2001 to 608,050 in 2002. Ten years ago, the department had almost 1 million civilian employees.
• More workers were fired for discipline or performance reasons in 2002 (6,609 employees) than in 2001 (5,500 employees).
• About 33,000 federal workers, or 2.1 percent of the workforce, quit in 2002. That's the lowest quit rate in at least five years.
• Layoffs fell last year, down from 1,150 in 2001 to 994 in 2002.
• January, as usual, was the most popular month for retirements, with 7,270 retirements taking place. The most popular month for early retirements was September, with 1,333. OPM grants agencies early retirement authority each fiscal year upon request, and the authority runs out at the end of the fiscal year on Sept. 30. The least popular month for retirements was October (1,957).