Phased Retirement for Federal Employees? Not Yet.

Retirement eligible federal workers who don’t want to hang up their hats just yet and still want to work part-time will have to wait longer before they can sign up for the government’s new phased retirement program.

It has been nearly two years since Congress approved the law in July 2012, and the U.S. Office of Personnel Management (OPM) has not yet released the final regulations governing the implementation and execution of phased retirements.

When phased retirement becomes available, it will allow retirement eligible federal employees to work part-time, collect a partial pension to compensate for a full-time salary and still accrue retirement benefits during their part-time work. Their pensions would be recalculated and pension payment adjusted accordingly after they completely retire.

The Obama Administration pitched the law as a way to stem a seemingly runaway brain drain among federal agencies, as a greater number of older workers sought retirement, leaving younger, less experienced workers in their place.

According to OPM figures, 138,039 federal workers retired in 2013, as of Sept. 30. This is up from 111,641 in 2012; 82,837 in 2011; and 76,864 in 2010.

One aspect of the law will require phased retirees to “mentor” other workers, some of whom may be taking the full-time position of the retired employee, for at least 20 percent of their time on the job. This is meant to help stem rapid brain drain, and allows the more experienced employees to, in a sense, pass the baton to their new colleagues. The law does not force workers to retire.

“Participation is entirely voluntary, and requires the mutual consent of both the employee and employing agency,” according to the OPM.

The OPM website offers detailed information about who is eligible for the program, but no one can take part until the final rules governing it are developed. When that may occur has not been publicly released. It is also possible aspects of the phased retirement program could change.

“The program will become effective at the time set in the regulations to be issued. Implementation of the program is an important goal of OPM, and this will be accomplished as soon as possible,” according to a statement on the OPM’s website.

Last summer, the OPM received comments from federal workers and several agencies regarding a set of draft rules, which were published in the Federal Register on June 5, 2013.

While many federal workers were very pleased with the prospect of phased retirement, several agencies were a little reluctant to embrace it until a few issues are addressed.

Phased retirement is not available to everyone. Some members of law enforcement, air traffic controllers and other workers subject to mandatory retirement will not qualify. In addition, agencies will have to approve the request, which has raised concern among federal workers about whether an appeal option will be available in case they are turned down. There are also issues with implementing the program within the already complex federal retirement and health care systems, which are structured upon a thicket of dense rules and regulations.

Additional resources for federal workers and retirees ›