The Pay Freeze and Retirements

Longtime readers of this blog know that I'm something of a skeptic when it comes to the long-anticipated wave of baby boomer retirements in the federal workforce.

Even before the recession, the tsunami of retirements didn't materialize as quickly as many had thought. And there's nothing like a massive economic downturn to convince people to stay in their jobs for awhile longer. But if you want to kick-start a series of retirements in the federal sector, the quickest way to do so is a pay freeze--especially one that lasts a full two years. If President Obama gets his way--and it seems unlikely he'll get much opposition from Capitol Hill--that's exactly what will happen.

If Obama does get what he wants, suddenly those hundreds of thousands of people who are already eligible to retire or about to become so will be faced with the prospect that their high-three average salary won't be going up until 2013. That, as federal compensation expert Howard Risher told GovExec's Emily Long a couple of weeks ago, will provide a powerful incentive for them to move on.

I wonder if the Obama administration has calculated how much the potential increase in retirement benefits will offset the $60 billion in anticipated savings over the next two years that the pay freeze will generate.