If you are interested in participating in the phased retirement program, you need to know how it would impact your FEHB and FEGLI benefits, leave accrual and, if you are under FERS, the special retirement supplement.
FEHB and FEGLI
If you participate in phased retirement, you’ll be treated the same as a full-time worker for both health benefits and life insurance.
While a phased retirement participant, you’ll accrue annual and sick leave just the same as any other part-time employee. Because no participant in the program will have less than 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 half time. In other words, 40 hours work per pay period, during which you’d earn 4 hours of annual leave and 2 hours of sick leave.
FERS employee eligibility for the special retirement supplement
If under FERS, you wouldn’t receive the special retirement supplement during your period of phased retirement. Assuming that you meet the age and service requirements, it will be paid to you when you fully retire and begin receiving a combined annuity.
Ending phased retirement
Your period of phased retirement can be time-limited or open-ended. It all depends on what you and your agency have agreed to. However, in either case you can ask to be returned to regular employment or you can apply for full retirement. To return to full-time work would require agency approval, which would be rare; you can retire fully at any time during a phased retirement period without agency consent.
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.
Phased retirement is a reality. Whether the concept will ever take hold remains to be seen.