Last week, the Office of Personnel Management OPM) issued the final rule for implementation of the phased retirement program for eligible federal employees.
Congress approved the phased retirement program (Sec. 100121 H.R. 4348) in July of 2012. Last year, OPM issued a draft rule for comments.
“Phased Retirement offers an innovative alternative to traditional retirement for the 21st century workforce,” OPM Director Katherine Archuleta said in announcing the final rule. Archuleta said the program also gives federal managers a new tool to “provide unique mentoring opportunities for employees while increasing access to the decades of institutional knowledge and experience that retirees can provide.”
Under the program, federal employees approaching retirement are able continue working part time, while beginning retirement.
The final rule includes information on employee eligibility, benefits received during phased retirement, and how OPM will calculate the annuity during and after retirement, and how employees can fully retire after a phased retirement period.
To be eligible for the program employees must have been in full employment status for the previous three years and be eligible for immediate retirement under either the Federal Employees Retirement System (FERS) or the Civil Service Retirement System (CSRS). Employees subject to mandatory retirement, such as law-enforcement officers, firefighters, air traffic controllers, and most Border Protection officers are not eligible for phased retirement. An employee in phased retirement status is considered a part-time employee, not a reemployed annuitant.
The eligible employee receives income from a combination of part-time salary (50%) and partial annuity payments (50%). The phased retiree also accrues future retirement benefits proportional to the time they work. Phased retirees are expected to spend 20 percent of their time mentoring other employees.
The final rule goes into effect in 90 days. Agencies can begin to submit phased retirement applications to OPM on November 6, 2014.