As we approach the deadline on making a decision, from what I’ve learned in my research and discussions with other professionals, there are three categories of people who have different considerations when deciding whether to take the buyout offer:
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Those already eligible to retire/ where planning on retiring 2025: This group may have the least to worry about, as they are already eligible to voluntary retire. Being qualified for retirement would allow them to immediately start their pension AND keep FEHB in force. There may be little, if any, concern regarding the “paid admin leave” benefit being challenged and not paid from now to September 30th.
Those who would become eligible to retire before Sept 30th, 2025: This group is close, but they still need to reach a certain age or accrue a few more months of time to qualify for an immediate retirement. The concern would be what happens if they accept the buyout to stay to continue accrue the time in service but then they are fired before September 30th. The deferred resignation contract currently circulating makes it clear by accepting the buyout offer employees are protected from any other reduction in force. Additionally, in my conversation with an Labor attorney, they mentioned the consensus of her field is that this deal is not intending to “pull a gotcha”, by encouraging people to accept the buyout offer and then “pull the rug” before Sept. 30th. That made ME feel better as I was concerned people not yet eligible would get let go early and lose their FEHB coverage.
This group also has two additional considerations: MRA+10 eligibility and VERA eligibility. With VERA, there is more information in the attached white paper, but simply a VERA offer allows someone age 50 and at least 20 years of service OR any age with 25 years of service to retire without penalty and keep all benefits including FEHB coverage.
MRA + 10 is a voluntary retirement that allows someone who has reached MRA (Minimum retirement age) but does not have 30 years of service to retire, starting pension immediately while keeping FEHB coverage. The drawback of MRA+10 is a 5% reduction in pension for every year under 62. So, for example, if someone retires at 57 under MRA+10 rules they would face a permanent 25% reduction in their pension. BUT they could continue their FEHB coverage.
The ideal situation is that the Agency gets duck in a row and offers the newly approved VERA offerings available for employees to accept. Based on updated guidance released this week you could pair the VERA offering with the buyout offer.
Those who are not eligible for VERA retirement before Sept 30th, 2025: This group would be accepting the offer on clear resignation terms. This means that when September 30th rolls around, they will be out of job and would not be eligible to start their pension or continue FEHB beyond that date.
So what to do? Well that is individual and if you download the attached white paper it will help you make more educated decisions. From what I learned the caution would be, do not count on 8months of pay without zero responsibilities, do not expect to be able to undo your decision, but the other terms of the buyout are less likely to be challenged.
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