Expert's View

OPM figures show that more people leave the government each year before retirement eligibility than the number who retire. Image: Andrey_Popov/

While to outsiders the United States government may seem like a place where millions of employees enter at the front door when they are hired and exit at the backdoor when they retire, the facts don’t bear that out. There is a substantial amount of turnover going on all the time.

Employees come to work and leave for a variety of reasons. For example, they don’t make it through their one-year probationary period. Or they do make it through but leave later because they don’t like what they are doing (or who they are doing it with). And others get job offers that are more to their liking for financial and/or personal reasons. In other words, the hive is always in motion.


In fact, OPM figures show, more people leave the government each year before retirement eligibility than the number who retire. In fiscal 2020, for example, in the federal workforce outside the Postal Service, about 57,000 retired while 65,000 quit and another 41,000 came to the end of time-limited jobs.

The big question is, what benefits are they employees entitled to? (Note: As a practical matter, these are mainly considerations under the FERS retirement system because almost all employees under CSRS already are eligible for regular voluntary retirement under one of the standard age and service combinations.)

First, they are entitled to be paid through their final date of employment plus any unused annual leave. Second, they are provided with a 31-day extension of health and life insurance coverage at no cost to themselves. Third, they have the option of continuing their health benefits coverage in a plan of their choice for up to 18 months, for which they’d have to pay the full premiums, plus 2 percent. And, finally, they’d be offered the opportunity to convert any Federal Employees’ Group Life Insurance to a private policy at their own expense.

They may also be entitled to an annuity. Whether that’s a possibility depends on two things. First, do they have at least three years of creditable service. If they don’t, they’d only be entitled to a refund of their retirement contributions.

If they do have at least three years, their entitlement to an annuity would depend on whether they leave those contributions in the retirement fund or ask for a refund. If they ask for a refund, that action would end their entitlement to a future annuity. If they left their contributions it in the fund, they could apply for a deferred annuity at a later date. What that date would be depends on whether they were covered by CSRS or FERS.

A former CSRS employee who leaves with at least 5 years of creditable service can apply for a deferred annuity at age 62.

When a former FERS employee with at least 5 years of creditable service can apply for an annuity is a little more complicated. It depends on the combination of age and years of service. Let me explain.


Former FERS employees with at least 5 years of creditable service can apply for an annuity at age 60, age 62 with at least 20 years of service, or at their minimum retirement age with 30. MRAs range between 55 to 57 depending on the year of birth. They can also apply at their MRA with between 10 and 29 years of service; however, their annuity would be reduced by 5 percent for every year (5/12ths of 1 percent per month) they were under age 62.

Since FERS employees are covered by Social Security, when they apply for a Social Security benefit those years will be counted along with those they earned through outside employment. In that respect, nothing is lost by leaving government. However, when these former employees apply for their deferred annuities, they won’t be allowed to re-enroll in either the FEHB or FEGLI programs. That’s something worth thinking about.

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FERS Retirement Guide 2022