Phased Retirement: Answers to Some Common Questions

By on August 10, 2014 in Retirement with 2 Comments

The Office of Personnel Management announced the long awaited final regulations for the phased retirement program for federal employees late last week. As part of that announcement, OPM has also released a document with answers to some common questions employees are likely to have about this program.

Some of the questions and their answers are highlighted below, and the full document is included below as well.

For more information on phased retirement, be sure to check out our article Phased Retirement for Feds: Easing Into Retirement.

What is phased retirement?
Phased retirement is a human resources tool for Federal agencies to retain employees who would have fully retired, but who are willing to continue in Federal service for a period of time on a part-time schedule while engaging in mentoring. Employees participating in phased retirement will be paid for the part-time service they continue to provide the government and will receive additional credit for that service toward their full retirement. These employees will also begin receiving partial annuity payments, prorated based on the portion of the workweek that they are not scheduled to work.

Can phased retirement apply to any Federal employee?
No. Only individuals covered under the Civil Service Retirement System (CSRS) and the Federal Employees Retirement System (FERS) are eligible for participation in phased retirement, consistent with the provisions of the implementing statute and regulations. Employees who qualify for retirement under the retirement provisions for law enforcement officers, firefighters, nuclear materials couriers, air traffic controllers, members of the Capitol Police, members of the Supreme Court Police, and customs and border protection officers (except for certain employees hired as customs and border protection officers prior to July 6, 2008) are excluded from participation in phased retirement. Also, Federal employees who qualify for retirement under non-CSRS or non-FERS retirement systems (e.g., the Foreign Service retirement system) are ineligible for participation in phased retirement under these provisions.

Who is eligible for phased retirement?
In general, the employee must have been employed on a full-time basis for not less than the 3-year period ending on the effective date of entry into phased retirement status. The employee must also be a retirement-eligible employee, meaning an employee, who if separated from service, would meet specific eligibility criteria for retirement.

For CSRS employees, participation is limited to persons:

  • Eligible for an immediate retirement with at least 30 years of service, and
  • Who are at least age 55 or who have at least 20 years of service and who are at least age 60.

For FERS employees, participation is limited to those persons:

  • Eligible for an immediate retirement with at least 30 years of service, and
  • Who have attained their minimum retirement age (between ages 55 and 57 depending on year of birth) or who have at least 20 years of service and who are at least age 60.

How many hours can a phased retiree work?
The number of hours a phased retiree can work must be equal to one-half the number of hours the phased retiree would have been scheduled to work had he or she remained in a full-time work schedule.

When an employee elects phased retirement, is he or she moved into a different position, or will the individual continue to encumber the same position?
The individual remains in the same position and simply changes his or her tour of duty.

May a phased retiree hold two half-time jobs?
No, a phased retiree may not be appointed to more than one position at the same time.

How are phased retirees different from re-employed annuitants?
Individuals in phased retirement remain employees while working a 50% schedule and receiving a phased retirement annuity. Re-employed annuitants are retirees who have entered full retirement and have been rehired by an agency. In contrast, an individual in phased retirement has not separated from employment and is treated the same as other part-time employees in most cases.

Are employees currently participating in phased retirement eligible for Voluntary Separation Incentive Payments (VSIP)?
Yes. An employee leaving phased retirement to separate and enter full retirement may be eligible for a VSIP consistent with the agency’s VSIP authority and any eligibility criteria in 5 U.S.C. chapter 35, subchapter II, and 5 CFR part 576.

Under what conditions can a phased retiree return to regular employment status?
A phased retiree may, with the permission of an authorizing agency official, return to regular employment status provided that:

  • the employee submits a written and signed request, using an OPM-approved form, to an authorizing agency official, and
  • the authorizing agency official signs the request

The employing agency must notify OPM that the phased retiree’s status has ended by sending a copy of the signed approval (within 15 days of approval) to: phasedret@opm.gov

Phased Retirement: Frequently Asked Questions

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Ian Smith is one of the co-founders of FedSmith.com. He enjoys writing about current topics that affect the federal workforce. Ian also has a background in web development and does the technical work for the FedSmith.com web site and its sibling sites.

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