Q: I was employed in a LEO position and retired (under FERS) at the mandatory age of 57. I am collecting my annuity and the “bridge.” I have an opportunity to be hired in a non LEO, part time position in the federal government. I understand that the “bridge” will be affected by the earnings amount but will it affect my pension?
A: It may not affect your pension, but it could affect the salary you receive when you return. It depends on the type of position you accept when you return.
There are four ways to return to a federal position:
- By accepting a non-waivered position;
- By accepting a waivered position;
- By returning to work part-time under the provisions of a 2009 civil service law;
- By retiring under the “phased retirement” authority.
There is a legal prohibition against receiving “dual compensation” from the federal government (e.g., receiving both your pension and a full salary from a government job). The prohibition can be waived in certain situations, and has been repealed for certain approved part-time work.
If you are returning to a non-waivered position (i.e., a position that has not received a waiver of the prohibition on receiving dual compensation, or is not approved part-time work), you cannot receive both your pension and the full salary for the job. You will continue to receive your pension, but the salary of the job to which you return will be reduced dollar for dollar by the amount of your pension. If you make retirement contributions during this period of re-employment, you can become entitled to additional annuity payments.
- If you remain as a re-employed annuitant for more than one year, but less than five years, you will, upon your “re-retirement”, become entitled to a supplemental annuity based on that period of re-employment.
- If you remain as a re-employed annuitant for more than five years, your entire annuity will be recomputed when you “re-retire”.
There are special rules for those who retired on discontinued service retirement. When they return to federal employment, their annuity will end.
If you are returning to a waivered position, you will receive the full salary for the job and your full annuity. Your re-employment will be limited to two years, and you will not earn any additional retirement credit for this period of re-employment. The prohibition against dual compensation is generally waived for special purposes. Currently you may find waivered positions in agencies that deal with national security and counter-terrorism. Earlier, you found many waivers being granted for Y2K issues.
Retired federal employees can return to federal employment for limited hours without losing any of their annuity. The restrictions on limited hours work are:
- An agency cannot allow more than 3.5% of their positions to be filled by limited hours workers who are re-employed annuitants.
- An individual cannot work more than:
- 1040 hours per year;
- 520 hours in six months;
- A grand total of 3,120 hours.
