Phased Retirement: How You Can Participate
In 2014, OPM created an opportunity for full-time federal employees to work a part-time schedule while receiving federal retirement benefits known as Phased Retirement. This allows managers and administrative staff to lighten their heavy workloads, all while training others to one day take their places.
- Must be eligible for immediate federal retirement
- For CSRS employees, one must have at least 30 years of service and be at least age 55, or have 20 years of service at age 60.
- For FERS employees, one must have at least 30 years of service and be at minimum retirement age or have 20 years of service at age 60.
- Unlike regular FERS retirement eligibility, employees age 62 with 5 years of service are not eligible for phased retirement.
- Must have been full time for the past 3 years
- Cannot be a Special Provisions employee (LEO, ATC, FF)
- Has to be voluntary and approved by both the federal employee and the federal agency
How It Works
Phased retirement employees can work part-time while receiving a partial federal annuity. In other words, the federal employee can remain employed and earn roughly half of the current salary and receive half of the federal annuity at the same time. One of the advantages of phased retirement is that it allows federal employees to draw some benefit while building a bigger federal annuity at full retirement.
During phased retirement, employees can still receive step increases, and annuities will include cost-of-living adjustments (COLAs). FEGLI and FEHB will also continue as if for full-time employment. A phased retirement employee can return to full-time employment if the agency agrees. If so, the phased retirement time is counted as part-time federal employment. Once federal employees return to full-time status, they cannot return to phased retirement and must fully retire. If a phased retirement employee decides to retire, the phased retirement years of service will be treated as part-time employment. (We’ll explain more on that later.)
Deposit or Redeposit
If a deposit or redeposit is owed and the employee desires to buy that time back, it must be done before phased retirement status becomes effective. Employees will not be provided another opportunity to pay deposits or redeposits once phased retirement begins.
Accrue Annual and Sick Leave
During phased retirement status, federal employees continue to accrue annual and sick leave just as other part-time employees do. However, sick leave is not used to calculate the phased retirement annuity. Instead, the balance of unused sick leave will be added to the final full retirement calculation. This allows compensation for working during the transition time, and the federal annuity will be greater than if the federal employee had fully retired instead of first choosing phased retirement.
If a federal employee in phased retirement status passes away before separating for full retirement benefits, the federal employee will be considered to have been a deceased employee and the death benefits will be similar to those provided for survivors of deceased employees.
Full Federal Retirement
At the time of full federal retirement, the federal annuity is recalculated to take into consideration part-time federal service and adjusted for survivor benefits.
If you are interested in participating in phased retirement, the first step is to speak with your supervisor to help determine if phased retirement is the route for you.