The federal agency that oversees the financial condition of U.S. banks says it will offer voluntary early retirement to about 20% of its 5,800 employees
WASHINGTON —
The federal agency that oversees the financial condition of U.S. banks says it will offer voluntary early retirement to about 20% of its 5,800 employees.
Agency officials say the early retirements could create a more highly skilled workforce with the goal of attracting employees with a new set of skills.
The Federal Deposit Insurance Corp. announced the move Thursday, saying it isn’t designed to reduce its budget or the total size of the workforce.
About 42% of the current workforce is eligible for retirement within five years, the FDIC says. A wave of potential retirements could sap the agency’s institutional knowledge, especially during a crisis, the FDIC’s inspector general said in a recent report.
In addition, the FDIC plans to close a handful of field offices, and to relocate and consolidate others. No staff involved in examining banks will be affected, the agency says.
“This program will enhance our agility, preparedness and technological transformation,” FDIC Chair Jelena McWilliams said in a statement. It’s part of the agency’s strategy to “further reduce layers of management and acquire new skill sets,” she said.
Sen. Sherrod Brown of Ohio, the senior Democrat on the Senate Banking Committee, questioned the approach of phasing out veteran employees and said it could hurt the FDIC’s ability to deal with another financial crisis.
“If the FDIC chair were interested in increasing the agency’s capability to respond to a crisis, she would be focused on hiring and training a new generation of workers, not encouraging experienced and senior staff to rush to the exit,” Brown said. “Let’s be clear –- no matter how Chair McWilliams tries to spin it, reducing FDIC’s workforce will make us less prepared for a financial downturn.”
During the 2008-09 financial crisis and the following years, the FDIC closed hundreds of failed U.S. banks and transferred their loans and deposits to other, healthy banks. Bank failures reached a peak of 157 in 2010.
With the new plan, the FDIC is looking build up its staff engaged in inspecting banks, and in specialized information technology, computer science and data management. Officials declined to estimate what portion of the employees being offered early retirement is expected to take it. They include executive managers as well as administrative staff at FDIC headquarters in Washington and in the field.
The union representing FDIC employees said it’s concerned about employees having enough time to adequately assess their options and make informed decisions. Employees who accept the offer must leave by June 6. Under terms of the offer, most of the employees who choose to leave or retire will receive six months of salary.
The union, the National Treasury Employees Union, said it will negotiate with the agency on the office closures and consolidations to prevent involuntary relocations of employees to another FDIC office and allow them to continue to inspect banks in their areas.
“We also intend to closely examine the FDIC’s justification for these decisions, and our union will raise concerns if we feel the moves are unwarranted or harmful to FDIC’s ability to accomplish its mission,” NTEU President Tony Reardon said in a statement.
In addition to monitoring the banks’ condition, the FDIC was established during the Great Depression to insure deposits of banks that fail. It guarantees deposits up to $250,000 per account.