No Forking Way I Resign Today

Life has been chaotic over the last few weeks if you work for the Federal government. The Trump administration promised to downsize the government and that’s one promise they are fulfilling. President Trump handed the task to Elon Musk. Predictably, Musk is bringing Silicon Valley Tech culture to the public sector. Musk established the Department of Government Efficiency (DOGE) and filled it with 20-something tech bros. They’ve been giddily purging the federal workforce since.

I see this post will need a glossary.

• DOGE – Department of Government Efficiency.
• OPM – Office of Personal Management
• Pension – A regular payment made to a retired person.
• DRP – Deferred resignation program
• VERA – Voluntary Early Retirement Authority
• COLA – Cost of living adjustment
• MRA – Minimum retirement age. This is 57 years old for people born in 1970 and after.

Twitter downsizing playbook

On January 28^th, the OPM sent an email titled “A Fork in the Road” to over 2 million civilian federal employees. The email offered the Deferred Resignation Program (DRP) to the recipients. Employees could resign by February 6th, and get paid until the end of September when the date of their resignation would be effective. It’s an incentive for workers to quit their jobs, akin to a severance program in the private sector. Truthfully, 8 months of pay is quite generous for a buyout program.

Elon Musk modeled this after his Twitter (now X) takeover. He got rid of 80% of the workers and X still functions. They had many technical glitches and lost a ton of users, but you can post whatever you want on the platform today. X’s revenue fell by 50%, but the operating expenses are only a quarter of what it used to be. For now, X lost 80% of its value since Musk took over. Anyway, Musk is using the same playbook on the federal government.

The Federal workforce only had a few days to figure out what to do. They can resign or stay and hope for the best. One problem is they don’t trust DOGE, which has vilified public employees and threatened them with termination. The government doesn’t operate the same way as a private company in order to maintain stability. In addition, DOGE may not have the authority to fulfill those promises of 8 months of pay. Congress hasn’t approved funding for federal agencies past March 14. Where will the funding for DRP come from? While the Fork in the Road email says those who resign will have an effective date of the end of September, the effective date could be much sooner. Unions warned workers there is no guarantee the president can or will stick to it. Some Twitter employees were terminated after they accepted the resignation deal.

There will be plenty of lawsuits to challenge the DRP and subsequent reduction. A federal judge already extended the DRP deadline to February 11^th.  

The first DRP email wasn’t well received. The DRP is great if you’re planning to leave already or are ready to retire. However, there weren’t enough details. OPM sent several emails to clarify the program since then. One of the most relevant notes is about VERA which some government agencies asked to use. This is a rare retirement authority used when a government agency needs to undergo a major reorganization (for example, to reduce personnel). Employees who qualify for early retirement will be approved for immediate annuity if they resign by the DRP deadline. OPM also stated VERA will not be offered after the deadline.

Retirement

The greatest benefits for retired federal employees are a pension, continued health benefits, and life insurance. (They still have to pay health and life insurance premiums.) Public sector employees are paid less than their private sector counterparts. The pension is supposed to balance the scale. There are several ways to qualify for an annuity. The information below is from OPM’s website.

Immediate Retirement

If you meet one of the following sets of age and service requirements, you are entitled to an immediate retirement benefit:

The DRP is great if you will qualify for regular retirement by the end of the year. OPM said you can “resign and retire” and they’ll approve the retirement benefit.

Early Retirement aka VERA

The early retirement benefit is available in certain involuntary separation cases and in cases of voluntary separations during a major reorganization or reduction in force.  To be eligible, you must meet the following requirements:

OPM also said they’ll approve VERA. Usually, each department has to request VERA ahead of time. Once OPM approves VERA, the department can offer it to qualified employees. This time, the surprise DRP email and tight deadline made it impossible to get prior approval.

VERA is a nice deal if DOGE delivers.

Deferred Retirement

This refers to delayed payment of benefits until criteria are met, as follows:

If you leave Federal service before you meet the age and service requirements for an immediate retirement benefit, you may be eligible for deferred retirement benefits. To be eligible, you must have completed at least 5 years of creditable civilian service. You may receive benefits when you reach one of the following ages:

If you retire at the MRA with at least 10, but less than 30 years of service, your benefit will be reduced by 5 percent a year for each year you are under 62, unless you have 20 years of service and your benefit starts when you reach age 60 or later.

What should my federal employee friend do?

DRP makes a lot of sense if you’re already planning to leave your job or if you’re close to retirement. The White House said that 40,000 federal workers accepted the DRP so far. That’s about 2% of the federal workforce. It is way short of the targeted 5% to 10% reduction.

A friend from college works for the federal government and she is unsure of what to do. She is 50 years old with 22 years of service. She’ll get VERA if she accepts the DRP. However, she distrusts DOGE and she loves her job. She doesn’t want to retire.

If I was in her position, I’d take the offer in a heartbeat. But that’s me. I don’t like big organizations like the government or any corporation. I’d rather go it alone. However, early retirement isn’t a good fit for everyone. Life is better for people who love their job to continue with their mission.

VERA

VERA is a great deal because my friend can keep her health insurance and starts receiving her pension this year. The pension will be about 25% of her current take-home pay. That’s a big reduction in income, but she has enough savings to FIRE so she’ll be okay financially.

The only concern is she won’t get any COLA until she turns 62. That’s 12 years of inflation eroding away at the pension. However, if she doesn’t take the DRP, she’ll have to work for 8 more years to qualify for immediate retirement. That’s MRA + 30 years of service. According to the online calculator, the pension payment won’t be much higher than if she takes the DRP now.

From a financial point of view, she should take the DRP and run. She can find a job in the private sector or return to the public sector in 4 years. I went through a few of these workforce reduction processes when I worked in tech. The workplace is not the same after a few rounds of layoffs. Friends are gone and the remaining workers are disgruntled. Everyone had to work harder and the pay was frozen. The quality of life can be terrible in a hostile work environment. DOGE will continue to purge the federal workforce and force more people out. Federal workers will continue to receive disparaging emails from Musk’s team every week. Why deal with that BS if you don’t have to?

Anyway, she wants to wait until VERA is offered by her department without it being tied to the resignation email. She will reconsider it then. In the past, the resignation process was different from retirement. Mixing the two is confusing. They could offer a “normal” VERA and get many more participants. Instead, they are rushing people into a life-altering decision with nothing but a “trust me, bro.” What if she resigns and the department doesn’t approve the VERA? She’ll have no recourse.

Most federal employees work hard to improve our country and the world. They chose to work in the public sector because they believe in public service and good government. They are not in it for the big bucks. It’s a travesty how they are treated by Musk and the White House. This workforce reduction could have been handled better. But, that’s the tech bro culture. If you don’t like it, you’re a dinosaur.

Alright, that’s it for today. Do you know any Feds? What do you think my friend should do?

Excerpt from the first DRP email.

Q: Am I allowed to get a second job during the deferred resignation period?
A: Absolutely!! We encourage you to find a job in the private sector as soon as you would like to do so. The way to greater American prosperity is encouraging people to move from lower productivity jobs in the public sector to higher productivity jobs in the private sector.

Image credit: Reddit/govfire

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Joe started Retire by 40 in 2010 to figure out how to retire early. After 16 years of investing and saving, he achieved financial independence and retired at 38.

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