Federal Employee Retirement, Politics and Being Fired

View this article online at https://www.fedsmith.com/2018/03/20/federal-employee-retirement-politics-being-fired/ and visit FedSmith.com to sign up for free news updates
By on March 20, 2018 in Pay & Benefits with 0 Comments
Andrew McCabe giving a speech

Former FBI Deputy Director Andrew McCabe

Andrew McCabe was the Deputy Director of the Federal Bureau of Investigation (FBI) from February 1, 2016 – January 29, 2018. He apparently relinquished his post at the FBI in January, but reportedly used his accumulated leave to remain on the rolls as a federal employee until he could qualify for retirement when he turned 50.

McCabe turned 50 on March 18, 2018. He was fired on March 16, 2018 by Attorney General Jeff Sessions. In a statement, Sessions stated in a press release that the FBI’s Office of Professional Responsibility and Office of Inspector General (OIG) had found McCabe made an unauthorized disclosure to the news media and “lacked candor — including under oath — on multiple occasions.”

The FBI’s Office of Professional Responsibility reportedly recommended that McCabe be fired. This was done after an internal report by the Justice Department’s OIG accused McCabe of misleading investigators. These investigators were seeking information on how FBI and Justice Department officials handled a wide variety of issues possibly connected in some way to the 2016 presidential campaign.

Readers can decide for themselves whether the removal was justified or not.

Of more interest to many readers is the question: “What about his federal pension?”

Retiring at 50?

Most federal employees cannot retire at 50 and receive a federal annuity. Most probably do not want to retire at that early age unless other, more lucrative opportunities are beckoning. But, unlike the majority of federal employees, those who occupy a federal position in the law enforcement field have that option.

Law enforcement officers (LEOs) are treated differently under the federal retirement system than others under the FERS system. They are able to retire earlier than most other federal employees. They are eligible to retire at 50 after completing 20 years of service or, at any age, after completing 25 years of service. LEOs are subject to mandatory retirement by age 57 because of the stringent physical requirements of their jobs.

LEO’s also receive a Special Retirement Supplement until they are 62 that approximates the Social Security benefit earned in Federal service. After reaching the Minimum Retirement Age (MRA), if the retiree has earnings from wages or self-employment exceeding the Social Security annual exempt amount, the supplement is reduced or terminated.

Retirees other than LEOs are not eligible for an Annuity Supplement until reaching the minimum retirement age.

Questionable News on Federal Retirement System Hits the Internet

As the news surfaced that McCabe might be fired shortly before turning 50, the horror stories started to appear about McCabe losing his right to a federal pension.

For example, an article in Vox read: “…McCabe has been fired 26 hours before his formal retirement — a move that could cost him his federal pension.”

Another article in the Washington Free Beacon stated: “If he (McCabe) is fired by the attorney general, as recommended by the FBI’s Office of Professional Responsibility, before his official retirement date of March 18, 2018, he will lose his pension and all retirement benefits.”

The Business Insider wrote: “Former Deputy FBI Director Andrew McCabe might be able to save the pension he lost after Attorney General Jeff Sessions fired him” as “four Democratic members of the House of Representatives have offered McCabe jobs in a last-ditch effort to save his retirement benefits.”

Law & Crime published this headline: “Andrew McCabe Just Lost A $2 Million Pension and There’s Not Much He Can Do About It”

In the numerous articles that appeared with this approach to the topic, it sometimes becomes clear within the article that he did not lose his entire federal pension. Others just left the subject dangling and created the impression that his 21 years of federal service were gone, leaving him without any retirement benefits due to the efforts of a campaign by the Trump administration to deny a federal employee his earned retirement.

Financial Impact from Not Retiring at 50

Not being able to retire at 50 will likely have a significant financial impact on McCabe’s federal retirement income.

His pension income has been estimated by various news sources to have been in the range of $55,000 – $60,000 upon retirement at 50. Instead of retiring at 50, he would delay retirement until 57 or as late as 62. That could put the value of his uncollected pension in the range of $500,000 or so.

Under FERS, he may also receive the standard multiplier of 1% of the highest three years of average salary instead of the 1.7%, the higher or “enhanced” rate for law enforcement officials.

As this is an unusual situation, it is not clear if McCabe will be able to carry his federal health insurance into retirement. Losing the benefit of health insurance available to most federal retirees, who are usually older than 50, would also be a significant benefit to lose.

On the plus side, with the fame or larger recognition he has received in recent months and years, and his current net worth, he will not be destitute. He is an attorney with degrees from Duke University and Washington University at St. Louis with a net worth estimated to be about $11 million and an annual income of about $900,000 (according to several websites). Obviously, most of that income is not from his federal salary.

FERS and Being Fired from Federal Service

No doubt, being fired from a federal job can be traumatic. The general impression among many Americans is that it is virtually impossible to fire a federal employee.

Regardless of the social stigma that comes with being fired, a social stigma or traumatic event does not mean you will lose your right to a federal pension.

A federal employee who has a vested interest in the Federal Employment Retirement System (FERS) does not usually lose the right to a pension as a result of being fired.

A federal employee becomes vested after five years of federal service. There are exceptions that could result in losing a federal pension, but no one has suggested Andrew McCabe has engaged in treason, sabotage, insurrection against the United States, improper sharing or intentional loss of certain highly classified documents.

That could change, of course, if the internal investigation within the Department of Justice reveals unexpected information. But, even if he should be convicted of criminal activity that does not involve these items, McCabe will still be entitled to receive a federal pension.

He will not, however, be entitled to retire at 50, which was apparently his initial intent. He would have to wait until somewhere between 57 and 62 years of ago to begin collecting his retirement.

Several Democrats in Congress have discussed giving him a job in order to allow him to retire at 50. Perhaps that would work but he would not be retiring from the FBI in a law enforcement job. That distinction would likely be critical in determining whether he would still receive the LEO pension starting at 50. It seems unlikely this approach would work for McCabe or any other federal employee.

Summary

No doubt, being fired from a federal job with the surrounding publicity would make anyone upset, angry, or generate other strong emotions. Politics has been called a blood sport for a reason. Career federal employees are not exempt, particularly at senior levels and for employees who become involved in politics. His experience in this arena will continue to accumulate as events play out in coming weeks and months.

© 2019 Ralph R. Smith. All rights reserved. This article may not be reproduced without express written consent from Ralph R. Smith.

Tags:

About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters on federal human resources. Follow Ralph on Twitter: @RalphSmith47

Top