United States Government Accountability Office

GAO Testimony 

Before the Senate Special Committee on 

Aging

OLDER WORKERS 

Federal Agencies Face 

Challenges, but Have 

Opportunities to Hire and 

Retain Experienced 

Employees 

Statement of Barbara D. Bovbjerg, Director 

Education, Workforce, and Income Security Issues 

and 

Robert N. Goldenkoff, Director 

Strategic Issues 

For Release on Delivery

Expected at 3:00 p.m. EDT

Wednesday, April 30, 2008

 

GAO-08-630T 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

April 2008April 2008

OLDER WORKERS

Federal Agencies Face Challenges, But Have 

Opportunities to Hire and Retain Experienced 

Employees

Federal Agencies Face Challenges, But Have 

Opportunities to Hire and Retain Experienced 

Highlights of GAO-08-630T, a testimony Employees

before the Senate Special Committee on 

Aging 

Highlights of GAO-08-630T, a testimony 

before the Senate Special Committee on 

Aging 

To view the full product, including the scope 

and methodolog and methodology, click y, click on GAO-08-630T. 

For more information, contact Barbara D. 

Bovbjerg at (202) 512-7215 or 

bovbjergb@gao.gov and Robert Goldenkoff at 

(202) 512-6806 or goldenkoffr@gao.gov. 

For more information, contact Barbara D. 

Bovbjerg at (202) 512-7215 or 

bovbjergb@gao.gov and Robert Goldenkoff at 

(202) 512-6806 or goldenkoffr@gao.gov. 

GAO-08-630T. 

The federal workforce, like the

nation’s workforce as a whole, is 

aging. As experienced employees 

retire, they leave behind critical

gaps in leadership and institutional 

knowledge, increasing the 

challenges government agencies

face in maintaining a skilled 

workforce. We and others have

emphasized the need to hire and

retain older workers as one part of

a comprehensive strategy to

address expected labor shortages. 

The Office of Personnel 

Management (OPM), as the

government’s central personnel

management agency, is responsible 

for helping agencies manage their 

human capital. 

The Chairman of the Senate Special 

Committee on Aging asked GAO to

discuss (1) the age and retirement

eligibility trends of the current 

federal workforce, (2) the 

strategies federal agencies are 

using to hire and retain older 

workers, and (3) our observations

on how these strategies position 

federal agencies to engage and 

retain older workers. 

To address these objectives, we

analyzed demographic data from

OPM’s Central Personnel Data File, 

and interviewed officials at OPM 

and selected federal agencies. 

OPM is taking action to address 

past recommendations related to

better assisting agencies in using 

personnel flexibilities. GAO is 

making no new recommendations 

at this time. 

Governmentwide, about one-third of federal career employees on board at the 

end of fiscal year 2007 are eligible to retire between now and 2012. Many of 

these workers are concentrated in certain agencies. For example, nearly half 

of employees on board at the end of fiscal year 2007 at the Departments of 

Housing and Urban Development and Transportation, and at the Agency for 

International Development and the Small Business Administration, will be 

eligible to retire by 2012. The proportion of workers eligible to retire is also 

expected to be high in certain occupations, including those considered 

mission critical, such as air traffic controllers and customs and border 

protection agents, where more than half of the employees will be eligible at 

that time. Retirement eligibility will be especially pronounced among the 

agencies’ executives and supervisors—over 60 percent of career executives

are projected to be eligible by 2012. 

 

Federal agencies have a variety of flexibilities at their disposal to help them 

recruit and retain older workers, including using temporary hires to address 

short-term needs and rehiring retired federal workers. However, we found 

that agencies have not always been aware of the full range of available

flexibilities. One agency we reviewed—the Social Security Administration—is 

particularly at risk of losing a substantial portion of its workforce to 

retirement and has used a variety of strategies to hire and retain older 

workers, including offering recruitment, retention, and relocation bonuses. 

Other agencies, such as the Environmental Protection Agency, have

developed alternative approaches to attract experienced workers to meet 

their mission needs. Moreover, certain governmentwide flexibilities, such as

flexible and part-time schedules, while not focused directly toward older 

workers, are particularly attractive to them. 

Overall, the federal government already has a number of characteristics that 

appeal to all employees and is making progress toward becoming a model 

employer of older, experienced workers. For example, federal employees can 

telecommute, work flexible hours, and receive health and retirement benefits

that older workers find especially attractive. OPM and Congress are taking

steps to minimize some challenges that agencies face, but opportunities for 

improvement remain. For example, OPM has developed online decision 

support tools to provide agencies with guidance on how to use available 

hiring flexibilities and retention strategies. Congress has legislation pending 

that incorporates OPM’s proposals to enhance agencies’ ability to hire and 

retain older workers by giving agencies the authority, without OPM approval, 

to rehire retirees without penalty. Agencies have a shared responsibility to 

pursue the full range of flexibilities and authorities available and to 

communicate this information within their own agencies. Collectively, these 

measures will help make federal agencies more competitive in the labor 

market for all demographic groups. 
Mr. Chairman, Ranking Member, and Members of the Committee: 

Like the nation’s workforce as a whole, the federal workforce is aging and 

ever larger proportions are nearing retirement eligibility. When they retire, 

these older, experienced workers may leave behind critical gaps in 

leadership, skills, and institutional knowledge. At the same time, the rate 

of growth for the pool of younger workers is declining, and by 2025 overall 

labor force growth is expected to be only one-fifth of what it is today and 

much less than the projected growth in the number of retirees. As a result, 

the federal government and other employers may face increased 

competition in hiring skilled workers, and unless they develop effective 

retention strategies, employers will need to look more aggressively for 

workers with the right skills to meet their needs. 

Historically, the federal government has faced challenges hiring and 

retaining talented workers in key fields, and the looming retirement wave 

in federal agencies will only exacerbate these challenges. Older, 

experienced workers represent a large and underutilized national 

resource. Many experts maintain that older workers offer competitive 

advantages to employers because they often possess management and 

organizational skills that can be used in a variety of settings, and they 

bring to the job knowledge, experience, and productive work habits.1

 In 

addition, today’s older workers are better educated and healthier, and are

expected to live longer than previous generations. As the nation’s largest 

employer, the federal government is well positioned to serve as a role 

model for other employers. As with private sector employers, efforts 

directed at recruiting, engaging, and retaining a diverse workforce, 

including older workers, may serve to make the federal government a 

more competitive and productive employer overall. 

Because of this committee’s continuing interest in older workers, we are 

especially pleased to be here today to discuss work that we have 

conducted at your request. In this work, we examined federal government 

efforts to tap the pool of older workers to meet its workforce needs. As 

requested, our testimony today, will discuss (1) the age and retirement 

 1

See, for example, GAO, Highlights of a GAO Forum: Engaging and Retaining Older

Workers, GAO-07-438SP (Washington, D.C.: February 2007); AARP, The Business Case for

Workers Age 50+, (Washington, D.C.:2005); Partnership for Public Service, A Golden 

Opportunity: Recruiting Baby Boomers Into Government, (Washington, D.C.: January

2008); Department of Labor, Report of the Taskforce on the Aging of the American 

Workforce, (Washington, D.C.: February 2008). 

Page 1 GAO-08-630T Older Workers 
eligibility trends of the current federal workforce; (2) the strategies federal 

agencies are using to recruit, hire, and retain older workers; and (3) our 

observations on how these strategies position federal agencies to engage

and retain older workers. 

To describe demographic trends relating to the retirement eligibility and 

aging of the federal workforce, we analyzed information on the 24 Chief 

Financial Officer Act (CFO) agencies from the Office of Personnel 

Management’s (OPM) human resource reporting system, the Central 

Personnel Data File (CPDF).2

 Based on our previous work, we have 

determined that the CPDF is sufficiently reliable for the informational 

purpose of this testimony. In reviewing strategies federal agencies use to 

recruit, hire, and retain older workers, we interviewed officials in selected 

agencies, including the Departments of Agriculture, Housing and Urban 

Development (HUD), Labor, and State, as well as the Internal Revenue

Service (IRS), Environmental Protection Agency (EPA), Nuclear 

Regulatory Commission (NRC), and the Social Security Administration 

(SSA). We chose these agencies because they had relatively large 

proportions of employees who were eligible to retire or because they were 

implementing different approaches to hiring and retaining older workers. 

In addition, we interviewed officials at OPM to obtain their perspective on 

government retirement trends, and how agencies can address them. For 

the purposes of this testimony, we define an older worker as an employee 

aged 55 or over. We conducted our work from November 2007 to April 

2008 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to

obtain sufficient appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence we obtained provides a reasonable basis for our findings 

and conclusions. See appendix I for a detailed discussion of our scope and 

methodology. 

In summary, the large proportion of federal workers who are eligible to

retire now and will be in the near future presents challenges and 

opportunities for federal agencies. While the proportion of older workers 

eligible to retire varies across agencies, four agencies—Small Business 

Administration, the Agency for International Development, HUD, and the 

 

2

Pub.L. No. 101-576 (1990), as amended. The CFO Act agencies are 24 major executive 

agencies that are subject to the CFO Act. In 2007, the CFO Act agencies employed 98

percent of federal employees.

Page 2 GAO-08-630T Older Workers 
Department of Transportation—are well above the governmentwide 

average of 33 percent. Proportions of workers eligible to retire are 

projected to be especially high in certain occupations and in key 

leadership positions—64 percent of career executives are projected to be

eligible by 2012. These trends underscore the importance of strategic 

workforce planning. As the government’s human capital leader, OPM is 

responsible for helping agencies develop their human capital management 

strategies. Federal agencies have a range of flexibilities and authorities 

available that they may use to hire, engage, and retain workers. While only 

one of these flexibilities is largely focused on older workers—one that 

allows agencies to rehire retirees without offsetting the annuity—many, 

such as flexible and part time work schedules, are particularly appealing 

to older workers. One agency we reviewed—the Social Security 

Administration—is particularly at risk of losing a substantial portion of its 

workforce—at a time when it will experience unprecedented growth in 

demand for services. To deal with these losses, SSA has largely focused on

using governmentwide authorities, including paying recruitment and 

retention bonuses for hard-to-fill positions and providing workplace 

flexibilities, such as flexible work schedules and alternative work sites. 

Other federal agencies are developing alternative approaches to hire and 

engage older workers. For example, the State Department maintains 

databases with information on retirees’ skills and experience that it uses 

to identify individuals who may be able to assist when special needs arise, 

such as to provide tsunami relief for Indonesia. Overall, the federal 

government is making progress toward becoming a model employer of 

older, experienced workers. While there remain opportunities for 

improvement, OPM and the Congress are taking action to minimize the 

challenges agencies face in hiring and retaining older, experienced 

workers. 

Page 3 GAO-08-630T Older Workers 
Page 4 GAO-08-630T Older Workers 

The percentage of older workers—those age 55 and older—is growing 

faster than that of any other age group, and they are expected to live and 

work longer than past generations. Labor force participation for this 

cohort has grown from about 31 percent in 1998 to 38 percent in 2007. In 

contrast, labor force participation of workers under age 55 has declined 

slightly. (See fig. 1.) 

Figure 1: Labor Force Participation of Workers under Age 40 to 55 and over 

Many factors influence workers’ retirement and employment decisions, 

including retirement eligibility rules and benefits, an individual’s health 

status and occupation, the availability of health insurance, personal 

preference, and the employment status of a spouse. The availability of 

suitable employment, including part-time work or flexible work 

arrangements, may also affect the retirement and employment choices of 

older workers.3

 3

For more information, see GAO, Redefining Retirement: Options for Older Americans, 

GAO-05-620T (Washington, D.C.: April 2005). 

Background 

0

10

20

30

40

50

60

70

80

90

100

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Percentage

Source: GAO analysis of United States Bureau of Labor Statistics data.

Year

Under 40

40-54

55 and Over
As the government’s human capital leader, OPM is responsible for helping 

agencies develop their human capital management systems and holding 

them accountable for effective human capital management practices. One 

such practice is strategic workforce planning, which addresses two critical 

needs: (1) aligning an organization’s human capital program with its 

current and emerging mission and programmatic goals, and (2) developing

long-term strategies for acquiring, developing, and retaining staff to 

achieve these goals. In developing these strategies, we have reported that

leading organizations go beyond a succession-planning approach that 

focuses on simply replacing individuals. Rather they engage in broad, 

integrated succession planning and management efforts directed to 

strengthening both current and future organizational capacity.

4

 In 

implementing its personnel policies, the federal government is required to

uphold federal merit system principles in recruiting, engaging, and 

retaining employees. Among other provisions, the merit system principles 

require agencies to recruit and select candidates based on fair and open 

competition, as well as treat employees fairly and equitably. Federal 

agencies can recruit skilled or experienced workers, many of whom tend 

to be older, to fill positions requiring demonstrated expertise. 

OPM is also responsible for administering retirement, health benefits, and 

other insurance services to government employees, annuitants, and 

beneficiaries. It develops implementing regulations when Congress makes 

new options available to federal employees and often takes the lead in

advocating for new legislative options. 

We and others have highlighted the need to hire and retain older workers 

to address the challenges associated with an aging workforce. In so doing,

we have called upon the federal government to assume a leadership role in 

developing strategies to recruit and retain older workers. At our 

recommendation, Labor convened a task force composed of senior 

representatives from nine federal agencies5

 and issued its first report in 

February of this year.6

 The report provides information on strategies to 

 4

GAO, Human Capital: Succession Planning and Management Is Critical Driver of 

Organizational Transformation, GAO-04-127T (Washington, D.C.: Oct. 1, 2003). 

5

These agencies were the Departments of Commerce, Education, Health and Human 

Services, Labor, Transportation, and the Treasury; the Equal Employment Opportunity 

Commission, Small Business Administration, and the Social Security Administration. 

6

Department of Labor, Report of the Taskforce on the Aging of the American Workforce, 

(Washington, D.C.: February 2008). 

Page 5 GAO-08-630T Older Workers 
support the employment of older workers, strategies for businesses to use 

that leverage the skills of an aging labor pool, individual opportunities for 

employment of older workers, and legal and regulatory issues associated 

with work and retirement. While the task force’s focus was the private 

sector, some of the strategies it identified are relevant for federal agencies 

as well, for example, providing flexible work arrangements and 

customized employment options that include alternative work schedules 

and part time work. 

As we and other organizations have previously reported, the federal 

workforce is aging, with an increasing number of employees eligible to 

retire.7

 Many of the workers who are eligible to retire in the 24 CFO 

agencies are in executive and supervisory positions, as well as in missioncritical occupations. These trends point to the importance of strategic 

workforce planning to help agencies forecast, with greater precision, who 

might retire, when they might retire, and the impact of their retirement on 

an agency’s mission, and, using this information, develop appropriate 

strategies to address workforce gaps.

The percentage of older workers and workers nearing retirement eligibility 

varies across the federal government, with some agencies employing more 

such workers than others. For example, as shown in figure 2, the 

percentage of career federal employees in the 24 CFO agencies age 55 or 

older ranged from about 9 percent at the Department of Justice to about 

38 percent at the Small Business Administration and Department of 

Housing and Urban Development in fiscal year 2007. 

The Growing Number 

of Retirement Eligible 

Employees in the 

Federal Workforce 

Highlight the 

Importance of 

Strategic Workforce 

Planning 

 7

We define retirement eligibility as being eligible for an unreduced (full) annuity. The

specific rules vary by retirement plan. Under the Civil Service Retirement System (CSRS),

the minimum age and service requirements are age 55 with 30 years of federal service, and 

under the Federal Employees Retirement System (FERS), the minimum age is between 55

and 57 (depending upon year of birth) and 30 years of service. In both CSRS and FERS, 

employees are also eligible to retire at either age 60 with 20 years of service, or age 62 with

5 years of service if they had federal careers shorter than 30 years by the time they were 60

or 62. 

Page 6 GAO-08-630T Older Workers 
Figure 2: Age Distribution of Career Federal Employees at CFO Agencies in Fiscal Year 2007 

Percentage

Agencies

>55

40-54

<

Source: GAO analysis of CPDF data.

0

10

20

30

40

50

60

70

80

90

100

Veterans Affairs

Treasury

Transportation

Labor

NASA

NRC

NSF

OPM

SBA

SSA

State

Justice

Interior

GSA

HHS

DHS

HUD

EPA

Energy

Education

Defense

Commerce

AID

Agriculture

CFO Agencies’

 Average

40

24 25

31

26 24

31 29 26 29 27

15

37

27

9

30

22

28 33 31

38

29 25 21 27 31

Importantly, about than one-third of federal workers will be eligible to 

retire over the next 5 years. Thirty-three percent of federal career 

employees on board as of the end of fiscal year 2007 will be eligible to 

retire during fiscal years 2008 through 2012. In comparison, about 20 

percent of federal career employees on board as of the end of fiscal year 

1997 were projected to be retirement-eligible during fiscal years 1998 

through 2002. 

Many workers projected to become retirement eligible by 2012 are 

concentrated in certain agencies. As figure 3 shows, the agency rates range 

from a low of 20 percent at the Department of Homeland Security (DHS) 

to a high of 46 percent at four agencies—the Agency for International 

Development (AID), the Department of Housing and Urban Development, 

the Small Business Administration (SBA), and the Department of 

Transportation (Transportation). 

Page 7 GAO-08-630T Older Workers 
Figure 3: Percentage of Career Federal Employees Eligible to Retire by Fiscal Year 2012 

Percentage

Government Wide Average = 33%

Source: GAO analysis of CPDF data.

Agencies

0

10

20

30

40

50

35

46

35 33

39 40

34

39

31

20

46

38

29

37

31 35

38

45 46

39

32

46

35 34

60

70

80

90

100

Veteran Affairs

Treasury

Transportation

NASA

NRC

NSF

OPM

SBA

SSA

State

Labor

Justice

Interior

GSA

HHS

DHS

HUD

EPA

Energy

Education

Defence

Commerce

AID

Agriculture

Note: These data on retirement eligibility reflect the workforce as of the end of fiscal year 2007 and do 

not include actual or projected staff hiring or attrition at CFO agencies between 2007 and 2012. Some

workforce turnover is common at federal agencies; however, in some cases more staff are leaving the 

agency than are being hired. 

Estimated retirement eligibility rates will also likely vary at the component 

level—that is, by bureau or unit. Thus, even those agencies that have

relatively low overall percentages of retirement eligible employees may 

have components that have higher percentages of retirement-eligible staff,

which, in turn could affect the accomplishment of mission tasks and 

strategic goals for agency components and for the agency as a whole. 

Certain occupations have particularly high rates of workers eligible to 

retire. As shown in figure 4, 50 percent or more of the workers in 24 of the 

315 occupations with 500 or more staff we reviewed are eligible to retire 

by 2012. Several of these occupations, such as air traffic controllers, 

customs and border protection interdiction agents, and administrative law 

judges are considered mission critical. Federal law requires mandatory 

retirement at specified ages for some occupations, such as air traffic 

controllers who must retire at age 56. 

Page 8 GAO-08-630T Older Workers 
Figure 4: Certain Occupations with High Retirement Eligibility Rates by Fiscal Year 2012 

Percentage

Occupations

0

10

20

30

40

50

60

70

85

68

63 60 58 57 56 56 55 54 54 54 54 53 52 52 52 51 51 51 51 51 51 50

80

90

100

Engineering Equipment 

 Operating

Industrial Engineering

 Technician

Meteorological 

 Technician

Property Disposal

Engineering

 Technician

Packing

Customs and Border 

 Protection Interdiction

Health System 

 Administration

Geology

Facility Operations

 Services

Distribution Facilities and 

Storage Management Series

LIbrarian

Crane Operating

Appraising

Boiler Plant Operator

Hearings and Appeals

Carpenter

General Maintenance and

 

 Operations Work Family

Chaplain 

Air Traffic Control

Construction Control 

Industrial Specialist 

Correctional Institution

 Administration

Administrative 

 Law Judge 

Government Wide Average = 33%

Source: GAO analysis of CPDF data.

Note: Retirement eligibility rates are for occupations with 500 or more employees as of the end of 

fiscal year 2007 that exceeded the governmentwide rate of 33 percent by 50 percent or more. 

Retirement eligibility will be especially pronounced among the agencies’ 

executives and supervisors (see fig. 5). Of the approximately 7,200 career 

executives as of the end of fiscal year 2007, 64 percent are projected to be

retirement eligible by 2012, up from 41 percent in 2008. For supervisors 

who are not career executives, 45 percent will be eligible to retire by 2012. 

Page 9 GAO-08-630T Older Workers 
Page 10 GAO-08-630T Older Workers 

Figure 5: Projected Retirement Eligibility Rates for Career Employees from Fiscal 

Years 2008 to 2012 

Note: The term “executives” as used in this testimony includes political appointees above GS-15, 

those in the Senior Executive Service, those in the Senior Level and Senior Technical and 

Professional pay plans, and equivalent positions. The term “supervisor” as used in this testimony 

includes those whose duties involve assigning, directing, and supervising the work of others on a 

regular basis, as well as management officials who are not executives, but whose duties involve 

formulating agencies’ policies. 

Although most federal employees do not retire immediately upon 

becoming eligible,8

 the increasing number of employees becoming 

retirement eligible in the near future points to the need for agencies to 

examine how these trends will affect them. In so doing, agencies should 

take into account location, occupation, and grade level of potential 

retirees, and develop appropriate succession planning strategies, which 

may include retaining older, experienced workers, to address the likely 

impact. At the same time, it will be important for agencies to consider 

their organization’s strategic goals and the critical skills and competencies 

 8

According to OPM data, as of 2004, for voluntary retirements, retirement-eligible 

employees stay an average of 3.1 years before actually retiring. 

0

10

20

30

40

50

60

70

80

90

100

2008 2009 2010 2011 2012

Percentage

Source: GAO analysis of CPDF data.

Year

Employees

Executives

Supervisors

25

41

48

54

59

64

45

31

40

27

36

24

31

20 17
needed to meet future program outcomes, and to develop strategies to 

address any gaps in the number, skills, and competencies needed to 

achieve those outcomes. 

Federal agencies have a range of flexibilities at their disposal to help them 

engage and retain mission critical staff, including older, experienced 

workers. SSA, an agency that stands to lose a relatively large proportion of 

its experienced workforce in the upcoming retirement wave, is using many 

of the available governmentwide flexibilities to address workforce 

shortages. Some other federal agencies have developed alternative 

approaches that facilitate hiring and retaining older workers to meet their 

workforce needs. Despite the availability of recruitment, retention, and 

other flexibilities, agencies still face human capital challenges. In our past 

work, we found that agencies are not always able to make full use of 

available flexibilities, in part because they did not fully understand them. 

Federal Agencies 

Have a Variety of 

Options Available to 

Hire and Retain Older 

Workers, but Some 

Federal Practices 

Make It Difficult to 

Use These Options 

OPM’s Human Capital 

Policies and Guidance Are 

Aimed at Attracting and 

Retaining a Diverse 

Workforce 

As the government’s human capital leader, OPM sets human capital 

policies for federal agencies. In many cases, OPM serves as the gatekeeper

by approving or disapproving an agency’s request to use some hiring 

authorities or other flexibilities. Other authorities do not require OPM’s 

approval. 9 While only one of the available flexibilities is largely focused on

older workers—dual compensation waivers—many, such as flexible and 

part time work, are particularly appealing to older workers. OPM does not 

specifically target older workers in its policies. Instead, efforts are focused 

on workers who possess the right skills and experience to meet agencies’ 

workforce needs, without regard to age. 

Governmentwide Hiring Authorities. Under existing rules and regulations,

agencies have the authority to use a number of different approaches to 

hire workers, including older workers, without obtaining OPM approval. 

Among other approaches, they include using 

• temporary appointments for short-term needs;10

 9

OPM, Human Resources in the Federal Government Flexibilities and Authorities, 

January 2008. 

10See 5 C.F.R part 316, subpart D. 

Page 11 GAO-08-630T Older Workers 
• temporary assignees from state and local governments, colleges and 

universities, Indian tribal governments, and qualified not-for-profit 

agencies under the Intergovernmental Personnel Act (IPA);11

• commercial recruiting firms and nonprofit employment firms;12

• consultants for temporary or intermittent employment;13

• contractual arrangements: commercial temporary help for brief periods 

of time, and contracts for services, as long as the contracts follow 

federal procurement regulations.14

Agencies can also use additional hiring authorities by obtaining OPM’s 

approval or by notifying OPM on a case-by-case basis of their intent. These 

include the following: 

• Dual compensation waivers15 to rehire federal retirees—OPM may grant 

waivers allowing agencies to fill positions with rehired federal 

annuitants without offsetting the salaries by the amount of the 

annuities. Agencies can request waivers on a case-by-case basis for 

positions that are extremely difficult to fill or for emergencies or other 

unusual circumstances. Agencies can also request from OPM a 

delegation of authority to grant waivers for emergencies or other 

unusual circumstances. These waivers by their nature are largely for 

older workers;16

The Internal Revenue Service

(IRS) uses its dual 

compensation waiver to bring 

back retired Revenue Agents to 

train less experienced agents—

an effective way, officials say, to 

pass down critical knowledge 

without pulling experienced 

employees away from their 

primary focus—auditing tax 

returns. 

• Special authority to hire for positions in contracting— agencies can 

rehire federal annuitants to fill positions in contracting without being 

required to offset the salaries. Agencies are required only to notify and 

submit their hiring plans to OPM;17

 11 This allows federal agencies to bring in temporary assignees for the mutual benefit of the 

federal government and the nonfederal entity. See 5 U.S.C. §§ 3371-3375, 5 C.F.R. part 334. 

12 See 5 C.F.R. part 300, subpart D. 

13 See 5 U.S.C. § 3109, 5 C.F.R. part 304. 

14 See 5 C.F.R. part 300, subpart E. 

15 See 5 U.S.C. § 8344 and § 8468, 5 C.F.R. part 553. 

16 Some agencies have agency-specific dual compensation waivers. 

17 This authority expires December 31, 2011. 

Page 12 GAO-08-630T Older Workers 
• On-the-spot hiring without competition—this may be used in

circumstances where (1) public notice has been given and (2) OPM has 

determined there is a severe shortage of candidates or a critical hiring 

need, such as in certain medical or information security occupations, 

or occupations requiring fluency in Middle Eastern languages;18

• Veterans’ recruitment appointment—agencies may hire certain 

veterans without competition to fill positions up to the GS-11 level or 

for disabled veterans at any level;19

• Enhanced annual leave computation—agencies may credit relevant

private sector experience when computing annual leave amounts.20

Flexible Schedules and Workplaces. Flexible schedules and workplaces are

often extremely important to older workers. For example, some research

indicates older workers want to set their own hours and to be able to take 

time off to care for relatives when needed.

21 In addition, older workers 

nearing retirement may prefer a part-time schedule, for example, as a means

to retire gradually. Federal agencies have work schedule flexibilities that they

can provide to their workers without prior approval from OPM. These include 

As part of a strategy to attract 

experienced workers away from 

highly paid private sector jobs, the 

Nuclear Regulatory Commission 

(NRC) offers its employees

enhanced workplace flexibility,

including the options of working 

from home and of setting 

alternative work schedules. 

Officials report that these options

have sometimes been pivotal in

convincing older workers to come 

to work for NRC. 

• Part-time schedules—allow employees to work on a part-time basis; 

however, part-time work late in a career may result in a lower 

retirement annuity and may affect other benefits.

22

• Flexible work schedules—allow full-time or part-time employees to 

determine their hours of work within established parameters or modify 

the typical work schedule of 8 hours a day, 5 days per week by, for 

example, permitting schedules of 10 hours per day, 4 days per week.23

• Alternative work sites—allow employees to work from home or 

outside the traditional office.24

 18See 5 U.S.C. § 3304(a)(3), 5 C.F.R. part 337, subpart B.

19See 5 C.F.R. part 307. 

20See 5 U.S.C. § 6303(e) and 5 C.F.R. 630.205.

21AARP, Staying Ahead of the Curve: The AARP Working and Retirement Study. 

(Washington, D.C.: September 2003) 

22See 5 U.S.C. § 3402, 5 C.F.R. part 340, subparts A and B.

23See 5 U.S.C. § 6122, 5 C.F.R. part 610, subpart D. 

24See, e.g., § 359 of Pub. L. No 106-346 (October 2000). 

Page 13 GAO-08-630T Older Workers 
Compensation Flexibilities. Agencies also have authority to provide 

additional compensation to employees. These include 

• giving recruitment, relocation, and retention incentives to employees;25

• raising the pay rate of critical positions in an agency (requires OPM 

approval after consultation with OMB);26

• providing certain eligible physicians allowances of up to $30,000 per 

year. This flexibility requires OMB approval;27 and 

• using special rates, premium pay, and other compensation flexibilities 

to recruit and retain specified health care employees, under a 

delegation agreement with OPM.28

A Case Study: How One 

Agency Uses Available 

Flexibilities to Address a 

Looming Retirement Wave 

One of the agencies we reviewed—the Social Security Administration 

(SSA)—is particularly at risk of losing a substantial portion of its 

workforce at a time when it will experience unprecedented growth in 

demand for its services. SSA faces looming shortages particularly in some 

mission critical positions, despite enhancing its human capital planning 

efforts. The agency is experiencing service delays, even at current staffing 

levels. For example, SSA had over 750,000 disability claims awaiting a 

decision at the hearing level at the end of January 2008, leading to an 

average waiting time in fiscal year 2008 of almost 500 days. These backlogs

could increase in the future, given SSA’s demographic profile. Indeed,

according to SSA’s data,29 about 40 percent of its current workforce will be 

eligible to retire by 2012, and by 2017 that proportion will grow to more 

than half. The prospects for hiring new employees to replace retirees over

this timeframe remains unclear. According to SSA officials, while the fiscal 

year 2008 budget provided sufficient funding to allow SSA to replace all of 

the employees that leave—and to add additional employees in some 

areas—budgetary constraints have prevented the agency from hiring 

 25See 5 U.S.C. §§ 5753-5754, 5 C.F.R. part 575, subparts A, B, and C.

26See 5 U.S.C. § 5377 and OPM Bulletin No. 91-09. 

27See 5 U.S.C. § 5948, 5 C.F.R. part 595. 

28See 5 U.S.C. § 5371.

29We used data from SSA’s 2008 Retirement Wave Report. We did not independently verify 

reliability. Data used by SSA are generally consistent with data used by OPM. 

Page 14 GAO-08-630T Older Workers 
enough new workers in the past and future hiring will depend upon the 

resources available. Even when SSA can hire, the agency faces stiff 

competition from the private sector, especially for jobs in the accounting, 

legal, and information technology fields. 

The potential impact of retirements varies across the agency and will 

affect occupations SSA deems critical. By 2012, the proportion of those 

eligible to retire will generally range from 25 percent to 59 percent across 

such occupations. However, the proportion of administrative law judges

eligible to retire is far higher—about 86 percent will be eligible by 2012 

and nearly all by 2017. Moreover, SSA stands to lose a substantial portion

of its leadership staff. Of its 138 Senior Executive Service (SES) members, 

62 percent are now eligible to retire and nearly 80 percent will be eligible 

by 2012. Of the over 6,000 supervisors, nearly 39 percent are currently 

eligible to retire and 57 percent could retire by 2012. 

SSA has increasingly used information technology solutions in an effort to

improve its human capital management. For example, to better understand 

where to place its human capital emphasis, SSA has developed an 

approach that uses historical data to project future retirements. The model 

projects who is likely to retire, and SSA uses these projections to estimate 

gaps in mission-critical positions and to identify regional and headquarters 

components most affected. With these estimates the agency develops 

action plans focused on recruiting and hiring, retention, and staff 

development. SSA has also developed user-friendly automated tools to 

help job applicants complete the applications process. This system keeps 

both applicants and managers advised of where the application is in the 

process. 

SSA has used a variety of strategies to hire and retain older workers, some 

of which include the human capital flexibilities available to all federal

agencies. For example, SSA offers recruitment, relocation, and retention

bonuses to individuals with needed skills and considers an employee’s 

private sector experience when computing annual leave status. The 

agency also offers workplace flexibilities, such as alternative work sites 

and flexible work schedules, seminars on dependent care for elderly 

family members and children, and learning opportunities such as 

midcareer and pre-retirement seminars. In addition, SSA provides the 

options of a phased retirement program—allowing employees to work on 

a part time basis during the years immediately prior to retirement—and a 

trial retirement program—allowing workers to return to work within a 

year of retiring if they repay the annuity they’ve received. However, SSA 

Page 15 GAO-08-630T Older Workers 
officials told us that the programs have been rarely used because of the 

financial penalty workers would face. 

Under a delegation of authority from OPM, SSA has used dual

compensation waivers to hire experienced retirees to fill staffing shortages 

in critical areas when these shortages constituted an emergency. From 

November 2000 through December 2006, SSA used this authority to rehire 

nearly 1,300 federal annuitants who were knowledgeable and proficient at 

processing complex, difficult workloads and who needed little or no 

training to fill mission critical workforce gaps.30 This waiver authority 

expired in 2006 and was not renewed. However, SSA has been granted a 

waiver to reemploy administrative law judges to help reduce the disability 

hearings backlog. In addition, SSA was granted a waiver to rehire federal 

annuitants to provide relief in areas affected by hurricanes Katrina and 

Rita. SSA officials reported that when they have been allowed to use dual 

compensation waivers, their experiences were extremely positive. 

Beyond using existing flexibilities, SSA has developed recruitment efforts 

that reach out to a broader pool of candidates, some of whom are older 

workers. For example, SSA began recruiting retired military and disabled 

veterans in 2002 because of its commitment to helping veterans. SSA is 

also beginning to reach out to older workers in order to achieve its 

diversity goal of attracting a multigenerational workforce. These steps 

have included developing recruiting material featuring images of older and 

younger workers. 

Other Federal Agencies 

Have Developed 

Alternative Approaches to 

Hire and Engage Older 

Workers to Meet Their 

Workforce Needs 

In addition to SSA, we interviewed officials in several other agencies and

learned that some have developed their own approaches to hiring and 

engaging older workers. 

• Identifying and recruiting retirees with critical skills by using 

technology. The Department of State has developed two databases to 

match interested Foreign Service and Civil Service retirees with shortterm or intermittent job assignments that require their skill sets or 

experiences. One database—the Retirement Network, or RNet—

contains a variety of information, including individuals’ job 

 30While using waiver authorities to rehire annuitants, SSA had also received a waiver to 

offer early retirement to some employees. Agency officials told us that the purpose of this 

waiver was to “right size” or free up resources to hire workers in positions where they are

most needed. 

Page 16 GAO-08-630T Older Workers 
experiences, foreign language abilities, special skills, preferred work 

schedule, and favored job locations. To identify individuals with 

specific skill sets, officials match information from RNet with another 

database that organizes and reports all available and upcoming shortterm job assignments. For instance, in 2004, the agency identified 

current and retired employees familiar with Sumatra’s culture and 

language and sent many of them to Indonesia to help with the tsunami 

relief efforts. According to officials, this technology has allowed them 

to identify individuals with specialized skills and specific job 

experience within hours. Before these systems were in place, the 

search for specific individuals would have taken days or weeks, and 

even then, the list of individuals would have been incomplete. Because 

different personnel rules apply to Foreign Service and Civil Service 

positions, the agency typically brings Civil Service retirees on as 

contractors—nonfederal employees without any reduction to earnings 

or annuities—and may hire Foreign Service retirees as federal 

employees who may earn their full salaries and annuities.31

• Hiring older workers through nonfederal approaches. The 

Environmental Protection Agency (EPA) has designed a program that 

places older workers (55 years and over) in administrative and

technical support positions within EPA and other federal and state 

environmental agencies nationwide. Instead of hiring older workers 

directly into the government as federal employees, EPA has 

cooperative agreements with nonprofit organizations to recruit, hire, 

and pay older workers. Under these agreements, workers are 

considered program enrollees, not federal employees. EPA’s Senior 

Environmental Employment (SEE) program started as a pilot project in

the late 1970s, and was authorized by the Environmental Programs 

Assistance Act in 1984.32 According to EPA, many SEE enrollees come 

from long careers in business and government service, offer valuable 

knowledge, and often serve as mentors to younger coworkers. 

Depending on their skills and experience, program enrollees’ wages 

vary, starting at $6.92 per hour and peaking at $17.29 per hour. Using 

the SEE program as a model, the Department of Agriculture’s Natural 

 31According to State Department officials, the Department has received some dual 

compensation waivers for specific Civil Service positions, such as those located in Iraq or 

for work in support of processing passports. These waivers allow Civil Service retirees to 

return to work earning full salaries and full annuity payments. The Department of State can

hire back Foreign Service retirees on an intermittent schedule with full salaries and 

annuities up to certain limits if the Secretary authorizes.

32Pub. L. No. 98-313. 

Page 17 GAO-08-630T Older Workers 
Resources Conservation Service (NRCS) recently developed a pilot 

project called the Agriculture Conservation Enrollees/Seniors (ACES) 

program.33 Officials from both EPA and NRCS told us that their

programs are crucial in helping agencies meet workload demands and 

providing older workers with valuable job opportunities. 

• Partnering with private firms to hire retired workers. In partnership 

with IBM and the Partnership for Public Service, the Department of the 

Treasury is participating in a pilot project that aims to match the talent

and interest of IBM retirees and employees nearing retirement with 

Treasury’s mission-critical staffing needs. Working together, the three 

organizations are designing a program that intends to send specific 

Treasury job opportunities to IBM employees with matching skill sets 

and experience; help create streamlined hiring processes; provide 

career transition support, such as employee benefits counseling and 

networking events; and encourage flexible work arrangements. 

Officials are developing the pilot project within existing 

governmentwide flexibilities that do not require special authority from 

OPM. As one official suggested, designing such a project may reveal the 

extent to which existing federal flexibilities allow new ways of hiring 

older workers. 

• Engaging older workers through mentoring. Three of the agencies we 

spoke with are in the beginning stages of formalizing mentoring 

programs, recognizing that mentoring relationships help pass down 

knowledge to less experienced workers as well as engage older 

workers. According to one official at NRC, fostering mentoring 

relationships is essential for his agency. Not only do these relationships 

help to transfer knowledge to less experienced workers, they also help 

senior-level staff build strong professional relationships with junior 

employees.

Several Challenges Exist to 

Hiring and Retaining Older 

Workers in the Federal 

Government 

Despite the availability of recruitment, retention, and other flexibilities, 

agencies still face human capital challenges. In our past work, we found 

that agencies were not always able to make full use of available 

flexibilities, in part because they did not fully understand the range of 

flexibilities at their disposal and did not always educate managers and 

employees on the availability and use of them. In addition, we found that 

 33 NRCS developed ACES under the authority of section 1242(b)(4) of Title II of the Farm 

Security and Rural Investment Act of 2002. 

Page 18 GAO-08-630T Older Workers 
inadequate funding and weak strategic human capital planning contributed 

to the limited use of these flexibilities. Moreover, OPM did not take full 

advantage of its ability to share information about when, where, and how 

the broad range of flexibilities are being used and should be used to help 

agencies meet their human capital management needs. 

Several federal hiring procedures can also pose challenges and make it 

difficult for the federal government to compete with private sector employers. 

Cumbersome federal hiring procedures can make it difficult for older

workers, as well as all other applicants, to get a federal job. Recently, the 

Partnership for Public Service reported that older workers face a number of

challenges to getting a federal job. Many of the issues they raise affect

applicants of all age groups. For example, for many of the jobs open to the 

public, too little time was allowed between the time the job was announced 

and the deadline for submitting a complete application. For this and other

reasons, a majority of older workers they surveyed thought that applying for a 

federal job is difficult. To address the cumbersome and complicated federal 

hiring process, the report recommended that federal agencies publicize

federal jobs beyond the internet, make federal job announcements and the 

application process more user-friendly, and keep applicants informed of their

application status.34

Furthermore, the dual compensation rule, which requires annuitants’ 

salaries to be offset by the amount of the annuities they receive, can create

a financial disincentive for retirees wishing to return to federal service.

Unless federal agencies receive authority to grant waivers of this rule, 

retired federal workers—unlike private sector or military retirees—would 

be working for reduced rates of pay. Other rules make it difficult to use 

flexibilities. For example, federal employees close to retirement may face 

reductions in the monthly retirement benefit if they choose to work parttime—or use a phased retirement approach—near the end of their careers. 

 34 Partnership for Public Service, A Golden Opportunity: Recruiting Baby Boomers Into

Government, (Washington, D.C.: January 2008). We found the methodology used by the

Partnership to be sufficiently reliable for our use, including the survey methodology used

to determine how many older workers think applying for a federal job is difficult. 

Page 19 GAO-08-630T Older Workers 
Overall, the federal government is making progress toward becoming a 

model employer of older, experienced workers. Research has identified 

characteristics of work environments that older workers value that can

serve as a model for federal agencies as they seek to hire and retain older 

workers. While there remain opportunities for improvement, OPM and 

Congress are taking action to minimize the challenges faced in hiring and 

retaining older, experienced workers. 

Federal Employment 

Has a Number of 

Attributes Attractive 

to Older Workers 

OPM and Congress Are 

Taking Steps to Minimize 

Challenges 

As we discussed earlier, individual agencies have strategies that they can

use to address some challenges to employing older workers, but actions 

from OPM, as the government’s human capital leader, and Congress play 

pivotal roles in changing the landscape of rules regarding federal 

employment. 

OPM has taken steps to provide agencies with guidance on how to use 

available flexibilities and authorities. For example, in the fall of 2005, OPM 

put a hiring flexibilities decision support tool online to assist agencies in 

assessing which flexibilities would best meet their needs. This Hiring 

Flexibilities Resource Center provides in-depth information on a variety of 

flexibilities, including Direct Hire and Excepted Service. In January 2008, 

OPM updated its handbook on federal flexibilities and authorities, also 

online, which provides more information on both recruiting and retention 

strategies agencies can use to promote the positive aspects of the federal 

government. Responding to past findings about the length of time it takes 

to hire new employees, OPM has established a strategic goal to improve 

recruitment and retention, including faster hiring, hiring more veterans, 

rehiring annuitants, and faster application processing. 

OPM has also encouraged federal agencies to consider a broad spectrum 

of employees as they seek to meet workforce needs. According to OPM, 

federal human capital managers are facing increasing competition in 

attracting and retaining talent. To meet this challenge, OPM has developed

a new approach, called the Career Patterns initiative, for bringing the next

generation of employees into federal positions. In its Career Patterns 

guidance to agencies, OPM identifies, among other things, scenarios that

describe the particular characteristics of 10 types of individuals, including 

students, new professionals, experienced professionals, and retirees who 

could help broaden the pool of potential employees for federal jobs. 

OPM has also recently proposed legislation to Congress that would 

enhance agencies’ ability to hire and retain older workers. One proposal 

would give agencies the authority to grant dual compensation waivers 

Page 20 GAO-08-630T Older Workers 
without having to obtain OPM approval. The proposal calls for a yearly 

and lifetime limitation on how many hours an individual can be 

reemployed. A second proposal would increase the ability of employees to

work on a part time basis during their pre-retirement years by changing 

the way the CSRS annuities based on part time services are computed. 

Congress has taken action to address the retirement risks in selected

occupations. For example, in 2006, Congress enacted legislation allowing 

federal agencies to hire federal retirees to fill acquisition-related positions 

without requiring annuity offset.35 The authority to use this provision 

expires on December 31, 2011. Agencies are required to consult with OPM 

and OMB in developing their plans for reemploying annuitants in 

acquisition-related positions and to submit their plans to OPM. OPM 

officials indicated that they have reviewed and approved 9 agencies’ plans 

for consistency with the statutory criteria for reemploying annuitants in 

those positions. In addition, bills incorporating OPM’s proposals related to 

dual compensation waivers and part time employment are currently 

pending in Congress.36

Federal Employment 

Already Has a Number of 

Characteristics Appealing 

to Older Workers and 

Other Employees 

Although the availability of flexibilities generally varies by agency, 

agencies already have the authority to offer a number of the flexibilities 

and practices older workers find appealing in an employer. For example, 

AARP—one of the largest interest groups for individuals age 50 and 

older—developed criteria to evaluate an organization’s performance in 

recruiting, engaging, and retaining this cohort and has, since 2001, used

these criteria to identify the best employers for workers over 50.37 Features

of these criteria, as described by AARP, overlap with many of the 

flexibilities that federal employment offers. Their availability and usage in

the federal government are shown in table 1. 

 35General Services Administration Modernization Act, Pub. L. No. 109-313 (Oct. 6, 2006). 

36See S.2003 and HR.3579 relating to dual compensation waiver authority and HR.2780 

relating to part time work for retirement annuity computation. 

37AARP, formerly named the American Association of Retired Persons, is now known as 

AARP. 

Page 21 GAO-08-630T Older Workers 
Table 1: AARP’s Criteria for Selecting the Best Employers for Older Workers and

Their Usage in Government

AARP Criteria for selecting the best 

employers for older workers 

Availability and usage by federal 

agencies 

Recruiting 

Advertise in publications that target diverse 

age groups; 

Develop recruiting material that appeals to 

workers of all ages

Available; usage varies by agency 

Training opportunities 

Provide opportunities for training, continuous

education/learning, and career development 

Available; usage varies by agency 

Alternative work arrangements 

Provide for flexible hours, telecommuting, 

and phased retirement 

Available; usage varies by agency 

Benefits, including health and retirement 

Provide for health benefits, including the 

percentage of the premium that workers are 

required to pay and whether they are offered 

to part-time employees; long-term care 

insurance; defined benefit or defined 

contribution retirement plans

Available governmentwide 

Source: AARP and GAO analysis

One area where the government is particularly strong is the availability of

health benefits. Federal agencies offer health benefits and pay a sizable

portion of the cost. Health insurance may be an especially attractive 

recruitment and retention tool to older workers since employees generally

need only 5 years of federal service with health insurance while employed 

to carry that benefit into retirement. The federal government also offers 

retirement benefits and life insurance, and provides the opportunity for 

employees to purchase long-term care insurance.

In other areas, agencies generally have the authority to offer a particular 

practice, but their actual usage varies by agency depending on the 

agency’s needs, the nature of the work and other factors. For example, 

with respect to alternative work arrangements, the federal government 

offers a number of programs that help employees balance their personal 

and professional responsibilities, including telecommuting, part time 

employment, and flexible schedules.

Page 22 GAO-08-630T Older Workers 
A looming retirement wave could result in a possible “brain drain” for 

federal agencies unless they employ effective succession planning 

strategies—strategies that include hiring younger workers as well as 

retaining older workers who possess needed talents and skills and who 

can share these talents and skills with the next generation. Importantly, 

the government already has a number of tools in its human capital tool kit

that provide agencies with flexibility they need to recruit and retain older 

workers. Moreover, federal employment offers a range of benefits and 

employment flexibilities, such as the availability of part-time employment 

that can make these jobs particularly attractive to older workers, as well 

as all demographic groups. 

Still, while the federal government is making progress toward becoming a 

model employer of older workers, opportunities for improvement remain. 

First, our demographic analysis shows that while the federal workforce is 

aging, and an increasing number of employees will become eligible for 

retirement in the coming years, these trends will have varying degrees of 

impact within particular agencies. As a result, it will be important for 

agencies to fully understand and forecast the implications of these trends 

so they can implement timely and appropriate succession strategies. 

Second, as certain federal agencies have developed alternative approaches 

to hire and engage older workers, it will be important for agencies to share 

lessons learned from these practices governmentwide. And third, despite 

the availability of employment flexibilities and practices that allow 

employees to balance their professional and personal responsibilities, 

individual agencies do not always take advantage of them. 

Consequently, it is incumbent upon OPM to continue to work with federal 

agencies to help ensure they have (1) the flexibilities they need to attract

and retain a diverse workforce that includes older workers; (2) the 

awareness of these flexibilities, as well as guidance and technical 

assistance needed to implement them; and (3) mechanisms to share best 

practices and lessons learned in attracting and retaining older workers. 

Becoming a model employer is a shared responsibility and it will be 

important for agencies to, among other actions, take advantage of 

available flexibilities and guidance on their use and communicate this 

information throughout the agency. Collectively, these measures will help 

make federal agencies more competitive in the labor market for all 

demographic groups. 

Concluding 

Observations 

Mr. Chairman, Ranking Member, and Members of the Committee, this 

concludes our prepared statement. We would be pleased to respond to any 

questions that you may have. 

Page 23 GAO-08-630T Older Workers 
For questions regarding this testimony, please call Barbara D. Bovbjerg, 

Director, Education, Workforce, and Income Security at 202-512-7215 or 

Robert N. Goldenkoff, Director, Strategic Issues at 202-512-6806. Other 

individuals making key contributions to this statement include Dianne J.

M. Blank and Belva M. Martin, Assistant Directors; Nicholas Alexander;

Jessica Botsford; Clifton G. Douglas, Jr.; Karin Fangman; Cheri L. 

Harrington; Isabella Johnson; Mary Y. Martin; Rachael C. Valliere; 

Kathleen D. White; and Greg Wilmoth. 

Contact and Staff 

Acknowledgments 

Page 24 GAO-08-630T Older Workers 
Page 25 GAO-08-630T Older Workers 

Appendix I: Scope and Methodology 

Our objectives were to describe (1) the age and retirement eligibility 

trends of the current federal workforce; (2) the strategies federal agencies 

are using to recruit, hire, and retain older workers; and (3) our 

observations on how these strategies position federal agencies to engage

and retain older workers. 

To describe demographic trends relating to the retirement eligibility and 

aging of the federal workforce, we analyzed information on the 24 CFO 

agencies from OPM’s human resource reporting system, the Central 

Personnel Data File (CPDF). We analyzed data on the age, retirement 

eligibility, occupations, projected retirement rates, and other 

characteristics of the career federal workforce. We used the following 

variables: agency, occupation, date of birth, service computation date, pay 

plan/grade, and supervisory status. All these variables were 97 percent or 

more reliable. Using the CPDF information, we analyzed the age 

distribution of career federal employees at CFO agencies by age groupings 

(under 40, 40-54, and 55 and over). We also analyzed the percentage of 

career federal employees on board at the end of fiscal year 2007, who 

would be eligible to retire from fiscal years 2008 to 2012, and the 

percentage of workers eligible to retire in occupations where the 

retirement rates exceeded the governmentwide average. As a proxy for 

those occupations that may be at risk due to high retirement eligibility 

rates, we selected occupations with 500 or more employees as of the end 

of fiscal year 2007 that exceeded the governmentwide rate of 33 percent by

50 percent or more. For this report, we defined older workers as those 55 

and older. 

To address this objective, we reviewed strategies available to federal 

agencies to hire and retain older workers through governmentwide hiring 

authorities and other flexible arrangements, we interviewed officials at 

OPM and other selected federal agencies, including Labor, and we 

reviewed previous GAO work relating to older workers and federal human 

capital strategies. We also reviewed relevant laws, literature on hiring and 

retaining older workers, and documents on federal human capital 

flexibilities. As a case study, we selected the Social Security 

Administration (SSA), to describe the strategies that one federal agency 

has taken to hire and retain older workers. We selected SSA because it is 

at high risk of losing a large proportion of mission-critical employees and

because it risks losing these employees at the same time the need for its 

services will peak. 

Demographic Trends 

Strategies Available to 

Federal Agencies to 

Hire and Retain Older 

Workers
We interviewed human capital officers at selected agencies to collect such 

information as: 

• the extent to which agency officials think they will be affected by 

retirements over the next decade; 

• the information agencies have used and presently use to guide the 

identification of the probable effects of retirement and how agencies 

determine appropriate courses of action; 

• strategies that have been taken or will be taken regarding recruiting, 

hiring, and retaining older workers; and 

• characteristics and scope of these strategies, including human capital

authorities or special legislation regarding flexibilities that are available 

to them. 

To identify and describe alternative strategies, we performed a literature 

search and conducted interviews with government and private sector 

experts. The strategies that we describe were developed by the 

Departments of Agriculture, HUD, and State, the Internal Revenue Service 

(IRS), Environmental Protection Agency (EPA), and Nuclear Regulatory 

Commission (NRC). We selected these strategies because they were 

developed internally to met specific agency needs but could be used 

elsewhere in the government. 

To address this objective, we reviewed previous GAO work and conducted

interviews with federal officials at OPM and selected agencies and experts 

at AARP and other organizations that serve older individuals to determine 

how the federal government is progressing toward becoming a model 

employer. We chose the AARP criteria for selecting the best employers for 

workers over age 50 to compare to characteristics of federal employment 

because of its exclusive focus on older workers. 

We conducted our work from November 2007 to April 2008 in accordance 

with generally accepted government auditing standards. Those standards 

require that we plan and perform the audit to obtain sufficient appropriate 

evidence to provide a reasonable basis for our findings and conclusions 

based on our audit objectives. We believe that the evidence obtained 

provides a reasonable basis for our findings and conclusions based on our 

audit objectives. 

Page 26 GAO-08-630T Older Workers 

Observations on How 

Strategies Position 

Federal Agencies to 

Engage and Retain 

Older Workers 

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