Ineffective Use of Early Retirement Offers, FEHBP for All and More
A weekly round-up of pay and benefits news.
Buyouts and early retirement offers are likely to become more prevalent as federal agencies absorb budget cuts and work to meet the Trump administration’s goal of reducing the federal workforce. But at least one agency needs to brush up on using separation incentives more effectively. A recent Small Business Administration effort to reshape its workforce through early retirement and buyouts was not successful in achieving any of its goals, according to a report last week by the agency’s inspector general.
In fiscal 2014, SBA requested the authority to use early retirements through the Voluntary Early Retirement Authority and Voluntary Separation Incentive Payment program in order to address workforce skill gaps, increase the population of early-career employees and address budgetary constraints.
But according to the agency’s IG, the plan to implement early retirements lacked measurable objectives, included inaccurate information, and failed to act on proposals from a consulting firm to change the SBA’s service model.
As a result, SBA spent $2.1 million for employees to retire early, only to keep those positions largely the same. Of 149 positions vacated through the program, 54 were filled without meaningful changes to the occupants’ responsibilities or job descriptions.
The inspector general recommended that SBA conduct a “lessons learned” report on the performance of the 2014 early retirement program, and develop procedures to ensure any future early retirement programs operate in accordance with VERA and VSIP regulations and Office of Personnel Management guidance.
SBA officials concurred with the report, and agreed to implement the recommendations by September.
On Capitol Hill, one House Republican is asking colleagues in the Senate to consider opening up the health insurance plans available to federal employees to all Americans.
Rep. Darrell Issa, R-Calif., who voted for the American Health Care Act last month, sent a letter urging members of the Senate’s Health Care Working Group to include a provision expanding the Federal Employees Health Benefits Program to more, if not all, Americans. Issa introduced a bill on this issue shortly after the AHCA vote last month, and he has floated the idea in previous sessions of Congress.
The FEHBP is open to more than 8 million current and retired federal employees and allows them to choose from hundreds of health insurance plans. Issa said the program could help residents in states where insurers have fled Affordable Care Act marketplaces.
“Offering all Americans access to these plans would provide a backstop to offer more choices in many markets that currently only offer one option on the state insurance exchanges,” Issa wrote. “The hundreds of plans offered would also expand access to high-quality plan offerings, allow portability from job to job, and take advantage of the large risk pool already created by a large and diverse federal workforce.”
It’s unclear how opening the program to more people would affect costs for current participants, but the Congressional Budget Office recently estimated that a postal reform effort going in the opposite direction (taking U.S. Postal Service employees out of FEHBP) would lower costs for the remaining enrollees.
Meanwhile, the Office of Personnel Management unveiled its May numbers for federal employee retirement processing Monday, and the agency is making headway on its backlog of requests.
The number of retirement claims received dropped again last month, from 6,581 in April to 5,548 claims in May. OPM slightly increased its processing of claims, completing 8,340 requests last month, which brought the total inventory of pending retirement claims to 16,140, down from nearly 19,000 in April.