Retirement wave falls short of OPM projections

New data released by the Office of Personnel Management indicates that federal employees are retiring in greater numbers, though still not as rapidly as OPM projected three years ago using retirement trends from 1999 to 2001.

Last year, 54,285 full-time, permanent employees retired, just short of the 56,151 that OPM projected. The rate also was lower than OPM projected: 3.4 percent versus 3.8 percent. That was because OPM underestimated the size of the full-time permanent workforce at 1.49 million. In reality, the figure was 1.61 million.

Still, the number of retirements was the largest in at least the last five years and marks continuing escalation. In 2003, 50,643 full-time permanent employees retired, up from 41,905 in 2002, and 41,543 in 2001. In none of those years, though, has the number of retirements reached the number projected by OPM, an indication that employees are working longer after reaching retirement eligibility than they have in the past.

That could be a good sign as agencies scramble to replace aging managers. Due to a hiring drought in the 1990s, many agencies were not able to maintain a pipeline of future leaders. Between 1988 and 2003, the age of the average federal employee grew from 42 to nearly 46. From 1990 to 2003, the age of the average senior executive increased from 50.7 to 53.1. With budget cuts likely in the coming years, and the retirement wave gaining strength, agencies will have their hands full replacing retiring employees. The percentage with 20 or more years of experience continues to hover around 38 percent.

In addition to the retirements, the federal government lost 48,441 other employees, including 35,863 who quit; 1,276 who lost their jobs due to reductions in force; 6,768 who were terminated for poor performance or misconduct; 2,826 who died, and the remainder in a miscellaneous category.

The government also hired 84,548 new full-time, permanent employees in 2004, the lowest number since 2000, when 78,076 were hired. New hires have declined since 2002, when 135,978 new full-time permanent employees were hired. Last year marked the third year in the last five in which new hires have not kept pace with separations. Still, the number of full-time permanent federal employees has grown slightly because of a hiring boom in 2002, when the government hired nearly 44,000 airport screeners to staff the new Transportation Security Administration.

In 2004, no cabinet department hired as many new full-time permanent employees as left. Ironically, both the Defense and Homeland Security departments had large gaps between hires and departures--11,157 at Defense and 3,428 at DHS. At Treasury, new hires trailed separations by 4,825. Still, Defense-the largest Cabinet agency by far with nearly 600,000 full-time, permanent employees--hired the most new workers in 2004: 34,380. DHS also was among the top hiring departments, with 6,947. It trailed the Veterans Affairs Department, however, which hired 12,833 people in 2004.

The number of employees who lost jobs because of misconduct or poor performance dropped 17 percent, from 8,196 in 2003 to 6,768 last year. Both the Defense and Homeland Security departments, in designing new personnel systems, have sought to make it easier to fire poor performers, so that number may rise again in coming years.