FEDERAL EMPLOYEES

Is it Time to Change the Plan?

If you’re old enough, like me, you remember a time when being a government employee wasn’t such an attractive gig, unless you wanted a career that the private sector didn’t offer, such as being a spy. Back then, pay was much lower, but for that tradeoff, you got a nice, but small pension, and a pretty safe job. As the ‘80’s rolled around with vast increases in layoffs, that sounded like a good bargain for those who cared more about security than money.

However, now, many federal employees are paid far more than their private sector equivalents. An interesting note is that the biggest winners here tended to be those with high school or less or some college per the CBO. However, we’ve all learned about some keynote salaries, such as Anthony Fauci at $416,608, which doesn’t include the huge kickbacks he got from Big Pharma for drugs he had no hand in inventing.

In 2024, Biden gave federal employees a huge raise—9.1%--a number few of us have ever seen in our careers. You also have to consider benefits, which are extremely generous; these end up being 43% higher than equivalent private sector employees. Retirement is often easier for many because of a guaranteed settlement not reflecting market gains or losses. Can you spell pension? Many of us in the private sector can’t. My first long-term job offered a pension, but they bought us out fairly early on, converting us to a 401K. Given how long people live now, that seems fair.

But the big hitter is the job security, often regardless of performance, need for the work being done or value. And with a recent bill, those with great pensions are now getting Social Security on top of the pension, which feels like double-dipping to me.

What Can Be Changed?

It’s unlikely that wages can be reduced, but perhaps the raises might be subject to congressional or Presidential approval. After all, if the private sector isn’t giving big raises, why should government employees get them? Right now, the agency directors govern this, but with reduced funding going to them, they may rethink their generosity. In the case of union membership, generally all employees get the same raise, but this might be a way to get top workers to vote the union out, as they are more likely to get a better raise based on performance than if everyone gets the same. Getting unions out of the government is just a good idea.

As many of us experienced a transition from pensions (guaranteed) to 401Ks, why shouldn’t government workers be pushed into this system? The push came as people began to live a lot longer and pensions made no sense. The private sector has largely eliminated them, where they can (unions balks at this), so the government employees should be in the same boat. They live just a long. Everyone should be responsible for funding part of their own retirements through savings. Especially in government work, too many “game” the system with last minute promotions and other strategies to raise their pensions. Enough!

Finally, getting rid of people. The government has four main ways to shrink employment numbers: (derived from a government website)

Voluntary Early Retirement Authority (VERA)

The Voluntary Early Retirement Authority (VERA)—also known as an “Early Out”—allows agencies that are undergoing substantial workforce changes to temporarily lower the age and service requirements to allow more employees to voluntarily retire.

Discontinued Service Retirement (DSR)

The Discontinued Service Retirement (DSR) is one of the downsizing tools agencies can use to shrink the workforce. It allows agencies to involuntarily retire an employee who meets certain age and service requirements.

Voluntary Separation Incentive Payments (VSIP)

The Voluntary Separation Incentive Payment (VSIP) is one of the downsizing tools that agencies can use when needing to shrink its workforce. It allows agencies to pay cash to encourage an employee to leave federal service.

Severance Pay

This is equivalent to a RIF in the private sector, where companies have to pay some kind of pay as they terminate people with or without cause.

The payment of a severance package is one of the downsizing tools that agencies can use when needing to shrink its workforce. It allows agencies to involuntarily remove an employee (for reasons other than misconduct or performance) who does not otherwise qualify for an immediate pension.

These methods are being used in the DOGE program and are legal. As with most employers in the real world, you have some rights and can protest. What is surprising to me is that people under probation (which is normally a 90-day period), seem to be exempt from the common rules which allow termination without cause and no protection. It seems reasonable. Temps and those recently hired have to prove themselves. If they do not, they should go.

One wonders how the judges are basing their decisions to force rehiring, given that this is the way the work world is supposed to work. I have to wonder whether they would have taken these positions had Biden been behind getting rid of people. It seems too much like a protest of Trump and Musk, not a valid legal argument.

Nevertheless, what is happening in government is something most of us have experienced. And yes, some good people will end up losing a job. Most of us have experienced a layoff and instead of being devastated, good workers simply move on, and in many cases, find a better position.

There is no question that the federal workforce is way too large. Those people I know who have worked in government jobs say that it can be frustrating how many of their coworkers work slowly, if at all. We can do better; we can be better.