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Department of Health and Human Services

Retirement Incentive Other that Dollar Buyout

The coming budget year will likely include a mandate requiring agencies to reduce there budgets which ultimately means a reduction in the number of FTE’s. Personnel that maybe on the fringe of retirement (those that maybe just under the age or service time requirements to retire) should be given incentives to volunteer there by saving the jobs of younger personnel. But simply giving a $25 thousand dollar buyout to encourage personnel to retire is not much of an incentive especially when it is reduced by taxes. A better alternative which a number of civilian companies are finding more effective is to offer a time incentive which can be added to either the age or employees service time to help make up the difference in requirements to retire. This would be cheaper for the agency as they would not take an immediate monetary hit to their budgets for this incentive as it would be spread out over the life of the employee’s annuity. It also would allow the agency to reduce it’s budget for salaries with the reduction in the number of higher salaries being paid as younger personnel would now be allow to progress in their careers.

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Idea No. 3349