Phased Retirement?

The proposed phased retirement sounds good: work fewer days per week and get paid from two sources instead of one.  However, I have a few reservations.

  1. Employees nearing retirement eligibility typically have concerns about money.  Have I saved enough?  Will my “nest egg” retain its buying power, despite inflation, over a long period of time?  Am I certain I know what I am doing?  
  2. Phased retirement, by definition, involves a reduction in income.  This is just my opinion, but I believe employees nearing retirement are the last ones who would be interested in a reduction in pay.  More overtime?  Yes.  Cut my income?  Not so much – I’m trying to save for retirement!

    As long as the employee remains in phased retirement status – even if it is only one day per week – he cannot be replaced.  He is still on board, doing just 20% (or so) of what he used to do.  How much will managers like this?

  3. The Congressional Budget Office (CBO) has estimated passage of the phased retirement bill would result in decreased spending of $427 million and increased revenue of $24 million, over the period 2013-2022.  That’s nice, but where did these numbers come from?  Any estimate, in order to have credibility, must be based, somehow, on real numbers, not just guesses.
    • How many employees eligible for retirement would opt for this?
    • What salary levels would they be?
    • How many, at each salary level, would want 4 days per week?  How many for 3?  Anybody say 2?  Or maybe even 1 day per week?
    • How long would they stay in this “neither fish nor fowl” status?
    • What percent of high-three would be involved?  Variability?
    • What, exactly, would happen to their full retirement annuity?  Would it increase?  Would it be debited by the part-time annuity?  Please explain.
  4. Then there’s always our friends at the Office of Personnel Management (OPM).  They have been struggling – unsuccessfully – for years to manage their retirement calculation workload.  With all its administrative requirements and complications, phased retirements would just make matters worse.

Is there an actuary out there?  I would like to hear what a disinterested actuary has to say about putting money into the retirement fund for part-time work, while simultaneously taking money out of the fund, for part-time retirement, both for the same employee.  It looks to me like the retirement fund is being treated as a piggy bank.

I don’t know.  CBO is supposed to be non-partisan, but I believe they are trying very hard to promote a program that is highly questionable.

My website is here:

© 2016 Robert F. Benson. All rights reserved. This article may not be reproduced without express written consent from Robert F. Benson.


About the Author

Robert Benson served 35 years in various Federal agencies, as both a management analyst and IT specialist. He is a graduate of Northwestern University.

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  1. jhenjoh says:

    Another question. How does WEP fit in for those CSRS who are collecting Social Security? Are they retired with WEP in effect? Are they not “really” retired and continue to collect full benefits? It is prorated?

  2. Cherimarie Poulos says:

    Phased Retirement is a great idea for employees such as myself that could retire anytime but chose to stay on a few more years to build the retirement annunity. I have been working for the government for over 31 years. I am in the old system CSRS retirement and plan to fully retire in the next 3 years. However, if I am able to do the Phased Retirement plan, then I may stay up to 5 years on a part time basis. This would be beneficial to both myself and the government. As a long time employee within the Veterans Healthcare System, my knowledge basis on how the things works within the facility is very solid. I would be happy to pass some of this information to the next generation as a mentor to those that follow in my footsteps. If you have worked for the government for a long time as I have, then you probably know that it is not a proactive system, meaning that, they usually do not have a succession plan in place for those in high level positions that plan to retire soon. Normally what is done, is to wait until the position is vacant to hire the new employee or even transfer another employee to that position. This creates a large learning curve for the new employee, they do not have access to the former employee to ask questions etc. Therefore, the new employee has to start from scratch, figuring out how things work and why. I know this because I was that new employee at one time and I just had to figure it out on my own by trial and error. It would have been nice to have a mentor to bounce things off of, it may have made my transition a little smoother.

    I also believe that by implementing the Phased Retirement plan ASAP, the chance of a massive brain drain from the baby boomers retiring at the same time is a lot less. I am a baby boomers and I do see my fellow employees retiring left and right. The loss of highly skilled, experienced nurses would come at a cost to quality healthcare. It would be wise to have an incentive for those contemplating retirement, to stay on a few more years in a part-time position. Thank you for your consideration in this matter.

  3. T A says:

    Many of us are glad to see “the majority” of older feds retire. Why? Not because they are older, as there are a great deal of effective seasoned employees in the workforce. However, many are just breathing air and on the military’s equivalent of the ROAD program (Retired on Active Duty), especially in the DC region where so many have this “you owe me my job” mentality. Contrary to the behavior of many civil service employees that have years of being on the roles, longevity does not mean that you do a little bit less each successive year.
    I don’t care much for this program because it perpetuates the idea that you can’t pry the dead weight out of government. With this program, you have to live with inefficiency for even more years to come. As with any program, this one is ripe for favoritism and lack of effective measurable performance metrics. Hey, maybe we can have them work part-time with 100% telework. Then we wonder why taxpayers despise us.

  4. says:

    Here’s something I don’t think I’ve seen mentioned elsewhere.

    There is lots of rhetoric about the corporate knowledge, or even “wisdom,” that older employees take with them when they retire.  Well, how about those older, or middle-aged, employees that simply resign rather than retire, for one reason or another?  Don’t THEY have corporate knowledge, or wisdom? Of course they do!  Yet nobody is making a fuss over them, are they?  Be honest – employees that are eligible for retirement are not really special in this area.

    Take it one step further.  Is it not possible there are older employees who cling to the old ways even when the old ways are no longer as effective as formerly?  Don’t you agree management might actually be pleased to see such employees go away?

    Whatever.  I think that phased retirement is a crock.

  5. Erahey says:

    This is a great idea!!!  You can retain knowledge, experience, efficiency and the relationships that have been built and welded over great lengths of time. 

  6. FiftiesFed says:

    The idea that employees could stay on part time into their 70s and continue to encumber the position is absurd, like so much political rhetoric out of DC.  Here’s a bold thought that would save money and likely improve the workforce:  Mandatory retirement at 30 years and minimum retirement age,  62 and 20, or 65 and any years.   Institutional knowledge, while real, is somewhat overrated.  The next generation will gain it just like we did.  Add in mandatory changes of duty station for managers.  We would have a stronger federal workforce. 
    A 5Os Fed.

    • grannybunny says:

      Mandatory retirement is a bad idea for the agency, not to mention the employees pushed out as a result.  Why arbitrarily force out your senior employees, simply because they have reached a certain age?  You have invested substantial resources in training and retaining them, only to throw it away?  Older employees are the most dependable ones most organizations have.  It’s crazy to run them off and roll the dice with someone new who will require a large expenditure of time, money and energy to bring up to speed, and may — or may not — even work out.  Furthermore, mandatory retirement is probably illegal — under the Age Discrimination in Employment Act — for most jobs not requiring physical prowess.

  7. Melodyleist says:

    You are no CS, who are you kidding lazycs.  We work, if you are a CS you should be fired as you spend way too much time complainin

  8. HRguru says:

    I would say that if the position doesn’t need to be an FTE, 40 hours per week, why do we have it? Or at least, I am certain some managers will ask that question.  

  9. lazycs says:

    My biggest concern is as a Cs we are only working 20 hours a week now. Will be required to work 20 hours as a part timer?? That’s n deal putting in the same hours for 1/2 the $$$