Last week I explained what phased retirement is, its purpose, who is eligible to participate and who isn’t. This time I’ll explain what you need to do if you want to participate in phased retirement, and how it works.
If you want to participate and are eligible to do so (see last week’s article), you’ll need to talk to your manager to find out if he or she has any interest in having you return as a phased retirement participant after you retire. While you may be interested in participating, your manager may not. However, if your manager is interested, you need to know what’s involved and how it would affect you.
Just be aware that retirement is a major life decision. Among other things, you need to know what your retirement annuity will be and what the impact of working part time will have on that annuity when you retire for good. To have a clear understanding of that, you’ll need to have your personnel office run estimates showing the differences between your continuing to work full time, retiring on an immediate annuity, and electing to work as a phased retiree. While that may sound easy, you need to understand that it may be some time before your agency personnel office is prepared to provide you with the estimates you need. Just be patient. This is a new ball game for everyone.
If you and your manager agree that phased retirement is a win-win deal, you’ll have to fill out a phased retirement election form and have it approved by your agency, which has the final decision. If it approves the application, it will be sent to OPM for processing.
How does phased retirement work? Rather than paraphrase the information OPM has provided, I’ll give it to you straight from the source:
An employee electing phased retirement continues to work as an employee of the Federal Government but under a part-time schedule. At the same time, the employee receives [an] annuity benefit equal to a fraction of the annuity that would have been paid had the employee fully retired. Currently, this means employees will be receiving half of their pay and approximately half of their annuity because currently the only working percentage allowable by regulation is 50%.
Next week 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.