From the NTEU Bulletin
Your Future: Phased Retirement: Is This An Option For You? Last year, President Obama signed into law a Phased Retirement Program for the federal workforce whereby federal employees could have the option of working half time and collecting half of their retirement benefit. The Office of Personnel Management has recently issued draft regulations for implementing this new phased retirement program for the federal government.
The phased retirement program will permit an employee who is retirement eligible, and has worked full time for the federal government for the previous three years, to apply for this option. For employees in the Civil Service Retirement System (CSRS), that generally means being at least age 55 with 30 years of service or age 60 with 20 years of service. Employees under the Federal Employees Retirement System (FERS) must meet their minimum retirement age—between 55 and 57 depending upon their birth year with 30 years of service, or 60 years old with 20 years of federal service. Agency management will have the final say on whether or not an employee is eligible to participate in the phased retirement program.
Employees entering phased retirement would work 20 hours per week and receive 50 percent of their salary as well as 50 percent of their retirement benefit based on their years of service to that point. The additional time worked during phased retirement will be added to the employee’s retirement benefit when that employee fully retires. Most employees subject to mandatory retirement will not be eligible to participate, including law enforcement officers and firefighters. NTEU, however, successfully amended the phased retirement law to permit grandfathered Customs and Border Protection Officers who are not subject to mandatory retirement to be eligible to participate in the program.
An employee’s sick leave will not be used in computing the initial retirement benefit. Rather, when the employee fully retires, his or her sick leave balance will be added to the final retirement benefit calculation. FERS retirees eligible for the FERS supplement will also not receive that benefit until they are fully retired.
With very few exceptions, employees working under phased retirement will be required to spend 20 percent of their work time mentoring others. Agencies will determine what constitutes mentoring.
Individuals under phased retirement will continue to be treated as employees for purposes of participation in the federal health and life insurance programs with their agencies continuing to pay the full government contribution toward those benefits. Phased retirement employees will also be considered employees for purposes of making contributions to their Thrift Savings Plan accounts.
NTEU is currently reviewing the draft regulations. It is hoped that this new phased retirement program will be available to employees by early in 2014.