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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

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

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  1. VOLUNTARY EARLY RETIREMENT (VER) AND OTHER WORKFORCE RESHAPING LEGAL ISSUES JULY 30-31, 2003

  2. 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

  3. 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

  4. 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)

  5. 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

  6. 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.

  7. LEGAL ISSUES RELATED TO VER (cont’d) 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.

  8. LEGAL ISSUES RELATING TO VER (cont’d) OPM APPROVAL OF VER OFFER • An agency must obtain approval from OPM prior to offering CSRS/FERS VER.

  9. LEGAL ISSUES RELATING TO VER (cont’d) 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

  10. LEGAL ISSUES RELATING TO VER (cont’d) OPM APPROVAL OF VER OFFER (cont’d) • 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

  11. LEGAL ISSUES RELATING TO VER (cont’d) OPM APPROVAL OF VER OFFER (cont’d) • 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.

  12. LEGAL ISSUES RELATING TO VER (cont’d) OPM APPROVAL OF VER OFFER (cont’d) • OPM generally grants an agency approval to offer and process VERs for a specified time.

  13. LEGAL ISSUES RELATING TO VER (cont’d) 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

  14. LEGAL ISSUES RELATING TO VER (cont’d) 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.

  15. LEGAL ISSUES RELATED TO VER (cont’d) 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.

  16. LEGAL ISSUES RELATED TO VER (cont’d) SCOPE OF VER OFFER (cont’d) • 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

  17. LEGAL ISSUES RELATED TO VER (cont’d) SCOPE OF VER OFFER (cont’d) • 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.

  18. LEGAL ISSUES RELATED TO VER (cont’d) SCOPE OF VER OFFER (cont’d) • 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.

  19. LEGAL ISSUES RELATING TO VER (cont’d) SCOPE OF VER OFFER (cont’d) • 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.

  20. LEGAL ISSUES RELATING TO VER (cont’d) SCOPE OF VER OFFER (cont’d) • 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.

  21. LEGAL ISSUES RELATED TO VER (cont’d) SCOPE OF VER OFFER (cont’d) • 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.

  22. LEGAL ISSUES RELATED TO VER (cont’d) SCOPE OF VER OFFER (cont’d) • 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

  23. LEGAL ISSUES RELATING TO VER (cont’d) 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

  24. LEGAL ISSUES RELATING TO VER (cont’d) SCOPE OF VER OFFER (cont’d) • 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.

  25. LEGAL ISSUES RELATING TO VER (cont’d) CRITERIA FOR CSRS/FERS VER ELIGIBILITY • The employee must be serving in a position covered by the VER offer.

  26. LEGAL ISSUES RELATED TO VER (cont’d) 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.

  27. LEGAL ISSUES RELATED TO VER (cont’d) CRITERIA FOR CSRS/FERS VER ELIGIBILITY (cont’d) • 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.

  28. LEGAL ISSUES RELATED TO VER (cont’d) CRITERIA FOR CSRS/FERS VER ELIGIBILITY (cont’d) • Accumulated sick leave and accumulated annual leave may not be used to meet the 20- or 25-year creditable service requirement.

  29. LEGAL ISSUES RELATED TO VER (cont’d) 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.

  30. LEGAL ISSUES RELATING TO VER (cont’d) CRITERIA FOR CSRS/FERS VER ELIGIBILITY (cont’d) • 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.

  31. LEGAL ISSUES RELATED TO VER (cont’d) CRITERIA FOR CSRS/FERS VER ELIGIBILITY (cont’d) • 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.

  32. LEGAL ISSUES RELATED TO VER (cont’d) 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.

  33. LEGAL ISSUES RELATING TO VER (cont’d) CRITERIA FOR CSRS/FERS VER ELIGIBILITY (cont’d) • 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.

  34. 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.

  35. 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

  36. LEGAL ISSUES RELATING TO OTHER WORKFORCE RESHAPING TOPICS (cont’d) AVOIDANCE OF RIF ACTIONS FOR VETERAN’S PREFERENCE ELIGIBLE BARGAINING UNIT EMPLOYEES (cont’d) • 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.

  37. LEGAL ISSUES RELATING TO OTHER WORKFORCE RESHAPING TOPICS (cont’d) AVOIDANCE OF RIF ACTIONS FOR VETERAN’S PREFERENCE ELIGIBLE BARGAINING UNIT EMPLOYEES (cont’d) • 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.

  38. LEGAL ISSUES RELATING TO OTHER WORKFORCE RESHAPING TOPICS (cont’d) AVOIDANCE OF RIF ACTIONS FOR VETERAN’S PREFERENCE ELIGIBLE BARGAINING UNIT EMPLOYEES (cont’d) • 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.

  39. LEGAL ISSUES RELATING TO OTHER WORKFORCE RESHAPING TOPICS (cont’d) AVOIDANCE OF RIF ACTIONS FOR VETERAN’S PREFERENCE ELIGIBLE BARGAINING UNIT EMPLOYEES (cont’d) • Assignment of excess bargaining unit employees must be in accordance with the applicable provisions of the appropriate collective bargaining agreement and memoranda of understanding.

  40. LEGAL ISSUES RELATING TO OTHER WORKFORCE RESHAPING TOPICS (cont’d) AVOIDANCE OF RIF ACTIONS FOR VETERAN’S PREFERENCE ELIGIBLE BARGAINING UNIT EMPLOYEES (cont’d) • Merit System Protection Board and Federal Circuit cases deciding when a “demotion” for RIF purposes has taken place

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