VOLUNTARY EARLY RETIREMENT (VER) AND OTHER WORKFORCE RESHAPING LEGAL ISSUES

VOLUNTARY EARLY RETIREMENT (VER) AND OTHER WORKFORCE

RESHAPING LEGAL ISSUES

JULY 30-31, 2003

OVERVIEW

LEGAL ISSUES RELATING TO VER

Legal Authorities Governing VER

Other Office of Personnel Management (OPM) VER Resources

OPM Approval of VER Offer

Scope of VER Offer

Criteria for Civil Service Retirement System (CSRS)/Federal Employees Retirement System (FERS) VER Eligibility

OVERVIEW (cont’d)

LEGAL ISSUES RELATING TO OTHER WORKFORCE RESHAPING TOPICS

Avoidance of Reduction in Force (RIF) Actions for Veteran’s Preference Eligible Bargaining Unit Employees

LEGAL ISSUES RELATING TO VER

LEGAL AUTHORITIES GOVERNING VER

Statutes

CSRS – Title 5 of the United States Code, Section 8336(d)(2)

FERS – Title 5 of the United States Code, Section 8414(b)(1)(B)

LEGAL ISSUES RELATING TO VER (cont’d)

LEGAL AUTHORITIES GOVERNING VER (cont’d)

Regulations

CSRS – Title 5 of the Code of Federal Regulations, Section 831.114

FERS – Title 5 of the Code of Federal Regulations, Section 842.213

LEGAL ISSUES RELATED TO VER (cont’d)

OTHER OPM VER RESOURCES

Voluntary Early Retirement Authorities: Agency Guide to Implementing Early Retirement Programs (www.opm.gov/employ/vera/vera01.htm)

Note: The current issue of this publication is dated August 2000 and does not include recent revisions in the VER statutes and regulations.


OTHER OPM RESOURCES (cont’d)

CSRS and FERS Handbook for Personnel and Payroll Offices, Chapter 43 (www.opm.gov/asd/htm/hod.htm)

Note: The current issue of this publication is dated April 1998 and does not include recent revisions in the VER statutes and regulations.


OPM APPROVAL OF VER OFFER

An agency must obtain approval from OPM prior to offering CSRS/FERS VER.


OPM APPROVAL OF VER OFFER (cont’d)

OPM may only grant approval for an agency to offer CSRS/FERS VER if OPM has determined, based on information provided by the agency, that the one of the following exists:the agency (or a component) is undergoing

substantial delayering, substantial reorganization, substantial RIFs, substantial transfer of function, or other substantial workforce restructuring or shaping; OR



a significant percentage of employees serving in the agency (or component) are likely to be separated or subject to an immediate reduction in the rate of basic pay (without regard to the statutes providing for grade/pay retention under specified circumstances); OR



employees have been identified as being in positions which are becoming surplus or excess to the agency’s future ability to carry out its mission effectively.



OPM generally grants an agency approval to offer and process VERs for a specified time.


SCOPE OF VER OFFER

Within the parameters of OPM’s VER approval, an agency may further define the scope of the VER offer on the basis of:

1 or more organizational units; OR

1 or more occupational series or levels; OR

1 or more geographic locations; OR


SCOPE OF VER OFFER (cont’d)specific periods; OR

skills, knowledge, or other factors related to a position; OR

any appropriate combination of the above factors.


SCOPE OF VER OFFER (cont’d)

Within the parameters of OPM’s VER approval, an agency may choose to not only offer VER to those employees in positions which are directly impacted by the relevant organizational event, but also to employees in non-impacted positions which reasonably may provide “landing spots” for employees in impacted positions.



Within the OPM-approved VER period, an agency may limit CSRS or FERS VER offers by establishing window periods based on:

opening and closing dates that are announced to employees at the time of the VER offer; AND/OR



the acceptance of a specified number of VER applications, provided that at the time of the VER offer, the agency notified employees that it retained the right to limit the number of VERs on that basis.



Under this authority, an agency may establish an opening and closing date for receipt of VER applications, but also provide that of the VER applications received by the closing date, the agency will only approve a specified number.



Under this authority, an agency may establish an opening and closing date for receipt of VER applications, but also provide that if a specified number of VER applications are received prior to the closing date, the VER offer will terminate.



Under this authority, an agency may provide that a submitted VER application cannot be withdrawn after the established closing date for receipt of VER applications.



Under this authority, an agency may set the date by or on which employees whose VER applications have been approved must separate. If the agency has not set such a separation date, employees must separate by the end of the OPM-approved VER period.



When management’s downsizing or reshaping needs change, the agency subsequently may, within the OPM-approved VER period:

revise (by shortening or lengthening) a previously-established closing date, which must be announced to the same group of employees included in the original announcement; OR


SCOPE OF VER OFFER (cont’d)revise (by increase or decrease) a

previously-established number of VER applications it will accept, which must be announced to the same group of employees included in the original announcement; OR



establish a new window period through new opening and closing dates or a new instance of a specified number of VER applications which will be accepted, which may be announced to a different group of employees as long as they are covered by OPM’s VER approval.


CRITERIA FOR CSRS/FERS VER ELIGIBILITY

The employee must be serving in a position covered by the VER offer.


CRITERIA FOR CSRS/FERS VER ELIGIBILITY (cont’d)

The employee must have completed at least 20 years of creditable service and be at least 50 years of age OR must have completed at least 25 years of creditable service and be any age.



Of the 20 or 25 years of creditable service, at least 5 of those years must be creditable civilian service (career or noncareer). Military service may be used to meet the balance of either creditable service requirement.



Accumulated sick leave and accumulated annual leave may not be used to meet the 20- or 25-year creditable service requirement.


CRITERIA FOR CSRS/FERS VER ELIGIBIILTY (cont’d)Note: The annuities of CSRS and CSRS

Offset employees will be reduced by 2% for each year (or 1/6 of 1% for each full month) they are under the age of 55. This reduction is permanent – the annuity will not be recomputed at the unreduced rate when the employee reaches the age of 55.



Note: For FERS employees with frozen CSRS components, the portion of their annuities based on benefits they accrued and retained under CSRS frozen service is subject to the reduction referred to above for CSRS/CSRS Offset employees.



The employee must have been employed continuously by the agency for which OPM has granted VER approval for at least the 31-day period ending on the date on which the agency requested VER approval from OPM.


CRITERIA FOR CSRS/FER VER ELIGIBILITY (cont’d)

The employee must be serving under an appointment that is not time limited.

The employee must not have been notified that he/she is to be involuntarily separated for misconduct or unacceptable performance.



CSRS employees must be covered by CSRS for at least 1 year within the 2-year period immediately preceding the separation on which the annuity is based, although the 1 year of service does not have to be continuous.

LEGAL ISSUES RELATING TO OTHER WORKFORCE RESHAPING TOPICS

AVOIDANCE OF RIF ACTIONS FOR VETERAN’S PREFERENCE ELIGIBLE BARGAINING UNIT EMPLOYEES

When a personnel action qualifying as a RIF action is taken against a veteran’s preference eligible Postal Service employee, that employee is entitled to application of the federal RIF statutes and OPM’s RIF regulations.

LEGAL ISSUES RELATING TO OTHER WORKFORCE RESHAPING TOPICS (cont’d)

AVOIDANCE OF RIF ACTIONS FOR VETERAN’S PREFERENCE ELIGIBLE BARGAINING UNIT EMPLOYEES (cont’d)

RIF actions occur when:an agency releases a competing employee from

his/her competitive level by:

furlough for more than 30 days; OR

separation; OR

demotion; OR

reassignment requiring displacement,

AND



the release was required because of:

lack of work; OR

shortage of funds; OR

insufficient personnel ceiling; OR

reorganization; OR

the exercise of reemployment rights or restoration rights; OR

reclassification of an employee’s position due to erosion of duties when such action will take effect after an agency has formally announced a RIF in the employee’s competitive area and when the RIF will take effect within 180 days.



For the purposes of RIF, a “demotion” means the change of an employee to a lower grade or to a position with a lower rate of pay.



In order to avoid creating a RIF action requiring application of the RIF statutes and regulations for a veteran’s preference eligible bargaining unit employee, the employee must not be “demoted” during the course of workforce reshaping.



Assignment of excess bargaining unit employees must be in accordance with the applicable provisions of the appropriate collective bargaining agreement and memoranda of understanding.



Merit System Protection Board and Federal Circuit cases deciding when a “demotion” for RIF purposes has taken place

VOLUNTARY EARLY RETIREMENT (VER) AND OTHER WORKFORCE RESHAPING LEGAL ISSUES

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