Not Everyone Is Eligible for Phased Retirement

Most of the retirement-eligible federal workforce can begin applying for phased retirement in the fall, but a few groups won’t be able to take advantage of the new tool, according to the rules.

Those covered under the Civil Service Retirement System and the Federal Employees Retirement System can apply for the new program, which allows eligible feds to work 20 hours per week, receiving half their pay as well as half their retirement annuity. Federal workers employed in the following jobs, however, are excluded from participating in what the government hopes will improve succession planning in agencies: law enforcement officers; firefighters; nuclear materials couriers; air traffic controllers; members of the Capitol Police; members of the Supreme Court Police; and some customs and border protection officers (certain customs and border protection officers hired before July 6, 2008, are eligible for phased retirement, according to the regulation). Non-CSRS and non-FERS employees eligible for retirement -- for example, those enrolled in the Foreign Service retirement system -- also aren’t able to apply for the perk.

The Office of Personnel Management published guidance late last week for agencies and employees on the specifics of phased retirement, including pay, benefits, leave and mentoring. Agencies don’t have to advertise the opportunity, so OPM is encouraging eligible employees to be proactive and talk with their supervisors.

In most cases, partial retirees will be treated the same as part-time employees. One important exception is health care: Phased retirees will continue to receive the full contribution from the government under the Federal Employees Health Benefits Program and their costs won’t change. Those employees who enter phased retirement must devote at least 20 percent of their work time, or about 8 hours a pay period, to mentoring other employees, ideally those who would take over for them when they fully retire.

“Phased retirement encourages the most experienced federal employees to extend their employment for the purpose of facilitating knowledge management and to ensure continuity of operations,” said OPM Director Katherine Archuleta in an Aug. 7 memorandum to agency heads.

OPM’s 18-page Q&A for agencies and employees underscores the broad discretion agencies have in approving and crafting employees’ phased retirement agreements. Here are some important rules pertaining to phased retirement culled from the guidance:

• All phased retirees work half-time, which amounts to 40 hours per biweekly pay period.
• Participants can vary the number of hours they work per week within a pay period, as long as it totals 40 hours. However, “phased retirees must have an established schedule and may not work on an intermittent basis.” 
• Phased retirees can participate in alternative work schedule programs, the same as any another part-time employee.
• Phased retirees can fully retire at any time; conversely, they can return to a full-time work schedule with the agency’s approval.
• Employees who partially retire do not receive a lump-sum annual leave payment until they fully separate from the agency.
• Agencies can waive the mentoring requirement in the event of an emergency or “other unusual circumstances,” including being called to active duty when the “event or circumstance would make it impracticable for a phased retiree to fulfill the mentoring requirement.” 

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