Over the last two weeks, I’ve explained what phased retirement is, its purpose, who is eligible to participate (and who isn’t), what you need to do if you want to participate in phased retirement, and how it works. This time I’ll fill you in on how phased retirement impacts your FEHB and FEGLI benefits, leave accrual, the special retirement supplement (FERS employees only), and disability retirement. Then I’ll close this series with what your options are for ending phased retirement and what happens if you die before entering full retirement.

FEHB and FEGLI

As a participant in phased retirement, you’ll be considered as a full-time worker for both the health benefits and life insurance programs. To gain a better understanding of the health care program, go to www.opm.gov/healthcare-insurance/healthcare. For life insurance, go to www.opm.gov/healthcare-insurance/life-insurance. After you’ve digested that information, have a chat with your manager of benefits officer.

Leave accrual

While you are in phased retirement status, you’ll accrue annual and sick leave in the same way that other part-time employees do. Since all participants in the program will have at least 20 years of service, you’ll be accruing 1 hour of annual leave for every 10 hours in a pay status and 1 hour of sick leave for each 20 hours in a pay status.

You’ll be working 50 percent of the time. Since that translates into 40 hours work per pay period, you’d earn 4 hours of annual leave and 2 hours of sick leave. For more information about annual leave, read the fact sheet at www.opm.gov/policy-data-oversight/pay-leave/leave-administration/fact-sheets/annual-leave. For sick leave, go to www.opm.gov/policy-data-oversight/pay-leave/leave-administration/fact-sheets/sick-leave-general-information.

FERS employee eligibility for the special retirement supplement

While you won’t be eligible to receive the special retirement supplement during your period of phased retirement employment, if you meet the eligibility requirements, it will be paid to you when you fully retire and begin receiving a combined annuity.

Disability retirement while in phased retirement

While employees who have already retired on disability can’t participate in phased retirement, it’s also true that employees who are participating in the phased retirement program are barred by law from filing for disability retirement. So keep that in mind when considering whether to participate in the phased retirement program.

Ending phased retirement

Depending on what you and your agency have agreed to, your period of phased retirement can be time-limited or open-ended. However, in either case you’ll have the option of requesting that you be returned to regular employment or of submitting an application for full retirement.

What happens if you die before entering full retirement

If you die while working under phased retirement, you’ll be deemed to have been a deceased employee for purposes of determining survivor benefits. In other words, those benefits would be the same as if you’d stayed on the employment rolls and never entered the phased retirement program.

Well, there you have it. Phased retirement is now a reality. Whether many employees will view this as a good thing and approach their management to participate remains to be seen. What also remains to be seen is if agencies will view this as a good idea, or just one more bright idea that takes more time and effort to implement and monitor than it’s worth. Only time will tell.