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

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

• JULY 30-31, 2003

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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

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OVERVIEW (contd)

• LEGAL ISSUES RELATING TO OTHER WORKFORCE
  RESHAPING TOPICS
• Avoidance of Reduction in Force (RIF) Actions for
  Veterans Preference Eligible Bargaining Unit
  Employees

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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)

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LEGAL ISSUES RELATING TO VER (contd)

• LEGAL AUTHORITIES GOVERNING VER (contd)
• 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

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LEGAL ISSUES RELATED TO VER (contd)

• 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.

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LEGAL ISSUES RELATED TO VER (contd)

• OTHER OPM RESOURCES (contd)
• 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.

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LEGAL ISSUES RELATING TO VER (contd)

• OPM APPROVAL OF VER OFFER
• An agency must obtain approval from OPM prior to
  offering CSRS/FERS VER.

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LEGAL ISSUES RELATING TO VER (contd)

• OPM APPROVAL OF VER OFFER (contd)
• 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

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LEGAL ISSUES RELATING TO VER (contd)

• OPM APPROVAL OF VER OFFER (contd)
• 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

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LEGAL ISSUES RELATING TO VER (contd)

• OPM APPROVAL OF VER OFFER (contd)
• employees have been identified as being in
  positions which are becoming surplus or excess to
  the agencys future ability to carry out its
  mission effectively.

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LEGAL ISSUES RELATING TO VER (contd)

• OPM APPROVAL OF VER OFFER (contd)
• OPM generally grants an agency approval to offer
  and process VERs for a specified time.

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LEGAL ISSUES RELATING TO VER (contd)

• SCOPE OF VER OFFER
• Within the parameters of OPMs 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

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LEGAL ISSUES RELATING TO VER (contd)

• SCOPE OF VER OFFER (contd)
• specific periods OR
• skills, knowledge, or other factors related to a
  position OR
• any appropriate combination of the above factors.
  

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LEGAL ISSUES RELATED TO VER (contd)

• SCOPE OF VER OFFER (contd)
• Within the parameters of OPMs 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.

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LEGAL ISSUES RELATED TO VER (contd)

• SCOPE OF VER OFFER (contd)
• 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

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LEGAL ISSUES RELATED TO VER (contd)

• SCOPE OF VER OFFER (contd)
• 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.

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LEGAL ISSUES RELATED TO VER (contd)

• SCOPE OF VER OFFER (contd)
• 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.

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LEGAL ISSUES RELATING TO VER (contd)

• SCOPE OF VER OFFER (contd)
• 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.

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LEGAL ISSUES RELATING TO VER (contd)

• SCOPE OF VER OFFER (contd)
• 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.

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LEGAL ISSUES RELATED TO VER (contd)

• SCOPE OF VER OFFER (contd)
• 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.

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LEGAL ISSUES RELATED TO VER (contd)

• SCOPE OF VER OFFER (contd)
• When managements 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

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LEGAL ISSUES RELATING TO VER (contd)

• SCOPE OF VER OFFER (contd)
• 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

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LEGAL ISSUES RELATING TO VER (contd)

• SCOPE OF VER OFFER (contd)
• 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 OPMs VER approval.

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LEGAL ISSUES RELATING TO VER (contd)

• CRITERIA FOR CSRS/FERS VER ELIGIBILITY
• The employee must be serving in a position
  covered by the VER offer.

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LEGAL ISSUES RELATED TO VER (contd)

• CRITERIA FOR CSRS/FERS VER ELIGIBILITY (contd)
• 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.

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LEGAL ISSUES RELATED TO VER (contd)

• CRITERIA FOR CSRS/FERS VER ELIGIBILITY (contd)
• 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.

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LEGAL ISSUES RELATED TO VER (contd)

• CRITERIA FOR CSRS/FERS VER ELIGIBILITY (contd)
• Accumulated sick leave and accumulated annual
  leave may not be used to meet the 20- or 25-year
  creditable service requirement.

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LEGAL ISSUES RELATED TO VER (contd)

• CRITERIA FOR CSRS/FERS VER ELIGIBIILTY (contd)
• 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.

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LEGAL ISSUES RELATING TO VER (contd)

• CRITERIA FOR CSRS/FERS VER ELIGIBILITY (contd)
• 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.
  

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LEGAL ISSUES RELATED TO VER (contd)

• CRITERIA FOR CSRS/FERS VER ELIGIBILITY (contd)
• 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.

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LEGAL ISSUES RELATED TO VER (contd)

• CRITERIA FOR CSRS/FER VER ELIGIBILITY (contd)
• 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.

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LEGAL ISSUES RELATING TO VER (contd)

• CRITERIA FOR CSRS/FERS VER ELIGIBILITY (contd)
• 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.

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LEGAL ISSUES RELATING TO OTHER WORKFORCE
RESHAPING TOPICS

• AVOIDANCE OF RIF ACTIONS FOR VETERANS PREFERENCE
  ELIGIBLE BARGAINING UNIT EMPLOYEES
• When a personnel action qualifying as a RIF
  action is taken against a veterans preference
  eligible Postal Service employee, that employee
  is entitled to application of the federal RIF
  statutes and OPMs RIF regulations.

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LEGAL ISSUES RELATING TO OTHER WORKFORCE
RESHAPING TOPICS (contd)

• AVOIDANCE OF RIF ACTIONS FOR VETERANS PREFERENCE
  ELIGIBLE BARGAINING UNIT EMPLOYEES (contd)
• 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

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LEGAL ISSUES RELATING TO OTHER WORKFORCE
RESHAPING TOPICS (contd)

• AVOIDANCE OF RIF ACTIONS FOR VETERANS PREFERENCE
  ELIGIBLE BARGAINING UNIT EMPLOYEES (contd)
• 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 employees position due to
  erosion of duties when such action will take
  effect after an agency has formally announced a
  RIF in the employees competitive area and when
  the RIF will take effect within 180 days.

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LEGAL ISSUES RELATING TO OTHER WORKFORCE
RESHAPING TOPICS (contd)

• AVOIDANCE OF RIF ACTIONS FOR VETERANS PREFERENCE
  ELIGIBLE BARGAINING UNIT EMPLOYEES (contd)
• 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.

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LEGAL ISSUES RELATING TO OTHER WORKFORCE
RESHAPING TOPICS (contd)

• AVOIDANCE OF RIF ACTIONS FOR VETERANS PREFERENCE
  ELIGIBLE BARGAINING UNIT EMPLOYEES (contd)
• In order to avoid creating a RIF action requiring
  application of the RIF statutes and regulations
  for a veterans preference eligible bargaining
  unit employee, the employee must not be demoted
  during the course of workforce reshaping.

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LEGAL ISSUES RELATING TO OTHER WORKFORCE
RESHAPING TOPICS (contd)

• AVOIDANCE OF RIF ACTIONS FOR VETERANS PREFERENCE
  ELIGIBLE BARGAINING UNIT EMPLOYEES (contd)
• Assignment of excess bargaining unit employees
  must be in accordance with the applicable
  provisions of the appropriate collective
  bargaining agreement and memoranda of
  understanding.

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LEGAL ISSUES RELATING TO OTHER WORKFORCE
RESHAPING TOPICS (contd)

• AVOIDANCE OF RIF ACTIONS FOR VETERANS PREFERENCE
  ELIGIBLE BARGAINING UNIT EMPLOYEES (contd)
• Merit System Protection Board and Federal Circuit
  cases deciding when a demotion for RIF purposes
  has taken place