Will Retired Federal Employees Still Receive Their Annuity Payments in the Event of a Shutdown?

By on September 21, 2015 in Retirement with 7 Comments

Image of Capitol building in Washington, DC with closed stamp overlaid on top of it

The threat of yet another government shutdown at the end of the month has many current federal workers concerned about their pay and benefits. But what impact would a shutdown have on federal retirees?

Many retired federal employees may be wondering whether or not they will continue to receive their annuity payments if the government shuts down at the end of the month.

The Office of Personnel Management last revised its guidance on shutdown furloughs for federal workers during the last shutdown in 2013. However, much of that information would still apply for any shutdown that might occur this year.

Below are some of the more pressing questions and answers on a government shutdown with respect to federal retirement as last published by OPM.

I’m a Federal retiree. Will I still receive my monthly annuity payment during a government shutdown?

Yes, Federal retirees under the CSRS and FERS retirement systems will still receive their scheduled annuity payments on the first business day of the month.

I recently retired from Federal service. Will my retirement application be delayed by a government shutdown?

If your agency or payroll center submitted your retirement application to OPM, you will begin receiving interim annuity payments while OPM retirement specialists process your application. Because OPM Retirement Services is funded by the Trust Fund it manages, OPM Retirement Services employees will still be working normal operating hours during a government furlough.

If your agency or payroll center has not yet submitted your retirement application or the application is incomplete, you will likely experience some delay as OPM must wait on other agencies to submit all of the information needed to process your retirement. Some of these agencies may not be operating during a government furlough.

If there is a shutdown furlough, how does this impact a separating employee’s lump- sum payment for their unused annual leave?

In the event of a shutdown furlough, any payments incurred by the agency for an employee’s lump-sum payment will be delayed until funds are available.

If a shutdown furlough occurs during the 3 years of service prior to retirement, what effect will time in a furlough status have on an employee’s high-3 average pay?

Generally there will be no effect on the high-3 average pay unless the furlough causes the employee to be in a nonpay status for more than 6 months during the calendar year.

Are the retirement rules concerning the effect of a shutdown furlough the same for employees under the Civil Service Retirement System and the Federal Employees Retirement System?

Yes.

What will happen to employees who would have retired during a shutdown furlough?

For employees who, on or before the requested retirement date, submitted some notice of their desire to retire, agencies should, when the lapse in appropriations ends, make the retirement effective as of the date requested. The retirement request may be informal (such as a letter requesting retirement), and can be either mailed or personally submitted to the agency. Any additional required paper work, such as the formal retirement application form, may be completed when the agency reopens. No time spent by the retiree in such actions after the effective date of the retirement may be considered as duty time, since the individual would no longer be an employee of the agency.

© 2016 Ian Smith. All rights reserved. This article may not be reproduced without express written consent from Ian Smith.

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About the Author

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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