GovernmentExecutive.com

Last week's column on what happens if you seek to return to federal work after retirement sure generated a lot of reaction. So I decided it would be worth exploring the subject again, and looking specifically at how the rules have changed at the Defense Department.

First, here are some of the comments I received on the column:

• "I can't stop laughing! There sure are a lot of confused people out there who haven't figured life out. Many employees cannot retire due to family/medical needs, fine. But why on earth would someone retire, then come back to federal civil service knowing that their retirement monies would be reduced or stopped? Dumb, dumb and dumber."
• "The concept in this article is laughable, idiotic and makes no economic sense for a sane, half-witted retired fed employee."
• "The only way it would work is if the federal agency hiring would give the annuitant an offset waiver, [under which] the employee could return at their old grade up to a GS-12 without a hit against retirement earnings."
• "This article reinforces my belief that the only older annuitants that the government could possibly recruit are not the ones desired. If anyone is ignorant enough to sign back on board after securing their retirement under conditions that threaten that same retirement, these are not the folks we want leading the way."

These people aren't the only ones who think the rules on re-employed annuitants could use some changing. Earlier this month, Office of Personnel Management Director Linda M. Springer told a House appropriations subcommittee that the agency is "working to develop a proposal, as a means of combating the forthcoming retirement wave ... that would allow federal agencies to rehire recently retired federal employees who can assist with short-term projects, fill critical skill gaps and train the next generation of federal employees without having a reduction in the annuity payments they have already earned."

So there you have it. Sometimes the old rules become outdated and need to change. At one time, it was in the government's best interest to discourage re-employment, but in times of need, the opposite can be true. As I noted last week, there already are changes taking place: Under certain circumstances, agencies can use provisions of the 1990 Federal Employees Pay Comparability Act to hire federal retirees without offsetting their salaries.

Following the terrorist attacks on Sept. 11, 2001, OPM delegated the authority to waive the salary offset. This delegation remains in effect until the president terminates his declaration of a national emergency resulting from the attacks.

The downside of this authority is that re-employed annuitants hired under it aren't entitled to future retirement benefits based on this additional service. Under the original rules for re-employment, it's possible to accumulate future retirement benefits if the re-employment lasts at least one year.

Defense Differences

One reader reminded me after last week's column that "the rules on re-employed annuitants in DoD are almost totally different as a result of a law passed five or so years ago."

Indeed, the 2004 National Defense Authorization Act provided the Pentagon with specific re-employment authorities, including the ability to waive salary offsets. David S.C. Chu, undersecretary of Defense for personnel and readiness, outlined the reforms in a March 2004 memo.

The policy applies to annuitants rehired after Nov. 24, 2003. The jobs can only be offered at the GS-15 level (or the equivalent) and below. And annuitants hired under the authority can only be brought on under the following circumstances:

• For positions that are hard to fill, have a severe shortage of candidates, are critical to an agency's mission or are necessary to complete a specific project.
• For people who have unique or specialized skills.
• To bring on mentors for less experienced employees or provide continuity during organizational transitions. (But such positions can only last for a year's worth of full-time employment.)

By the way, the new National Security Personnel System that many employees are shifting to does not affect rules governing retirement, health and life insurance, leave, attendance and other similar benefits. If you were to return to work under NSPS, you would be treated as any other re-employed annuitant.

This is a good time for federal retirees at least to consider re-employment. Besides putting your skills to use, another major advantage is the option to test your retirement income. Some re-employed retirees live on their retirement benefit and bank their re-employment income. At the end of the re-employment period, this banked income can be used to pay off a mortgage balance or other debt to make full retirement more comfortable.

Tammy Flanagan is the senior benefits director for the National Institute of Transition Planning Inc., which conducts federal retirement planning workshops and seminars. She has spent 25 years helping federal employees take charge of their retirement by understanding their benefits.

COMMENTS

• Missouri has this practice now but only allows a max of 1,000 hours yearly without any benefits except for pay. A lot of people Missouri State retirees are using this to their own and the state’s benefit. Most work only two days a week. Check with Missouri State. Such a plan would be helpful for the federal governmnet and its retirees Bill Stroessner Posted April 4, 2007 7:48 AM
• Check the calendar, it's time to update the ridiculous regulations that reduce a federal retiree's pension by the amount they earn when going back to the federal workplace. Their pension reflects past earnings and contributions to this country, and should have no relevance to future salary. Also, additional work should generate pension benefits. Anything else is legal theft. It's bad enough that federal retirees can't collect Social Security benefits, yet another regulation that needs to be changed. But if these retirees really possess needed job skills, and want to jump back into harness, give them a break financially. GovExec.com reader Posted April 2, 2007 8:16 AM
• Great article! At least the author actually looked at our posts, and gave some of us credit for our experiences. But the situation remains the same. Too many retirement articles here talk endlessly about money, money, and more money. Work longer, save your sick leave, retire on this date. Blah, blah, blah. Take an objective look at your personal health, relationships, and probable lifespan. Then decide to stay or go. But as a happily retired federal employee, I know one thing absolutely, you can't reverse the carwash of life, and you shouldn't try. One study indicated that if a man today reaches the age of 65, he has a whopping 25% chance of living to age 80! And by that time, odds are that he won't be signing up for any Ironman contests. People talk endlessly about the "Golden Years". Well, they exist: age 20 to 35. Give the younger people the harness, make room at the treadmill and leave! GovExec.com reader Posted April 1, 2007 4:46 PM