A reader asked what would happen to our government benefits and seniority if we found ourselves out of federal employment due to a downsizing or an outsourcing decision. Well, as with so many other items dealing with our federal employment, the answer is “it depends”.
Health Insurance
If you are eligible for retirement (including early retirement) you may retire and you can continue your health benefits under the same conditions as if you were an employee as long as you had been enrolled in the FEHB for the last five years. As a retiree, you continue to participate in the annual open seasons.
If you hadn’t been enrolled for the last five years, or you were not eligible for retirement, you could carry over your health insurance for 18 months under the provisions of COBRA. COBRA, the Consolidated Omnibus Budget Reconciliation Act, requires that you pay 100 percent of your cost and the employer’s cost, plus a 2 percent administrative charge. This sounds like a lot, but often it is less expensive than purchasing an individual health insurance policy. Often employees who can’t carry their health insurance over when they leave look for group insurance through professional or fraternal organizations to which they belong.
Life Insurance
If you are eligible for retirement (including early retirement) you may retire and you can continue your life insurance under the same conditions as if you were an employee as long as you had been enrolled in the same options in the life insurance program for the last five years. If you are not eligible for retirement, you will have the opportunity to convert your life insurance to an individual policy.
Early Retirement
Both CSRS and FERS early retirement have the same criteria. You must be age 50 with 20 years of service, or be any age with 25 years service. Under CSRS you are subject to a 1/6 of 1 percent per month (2 percent per year) reduction for each full month you are under age 55. There is no age-based reduction for early retirement under FERS.
FERS MRA+10 Retirement
Under FERS, employees who have reached their minimum retirement age may retire if they have at least 10 years of service. There is a 5/12 of 1 percent (5 percent per year) reduction for each full month you are under age 62.
Deferred Retirement
If you are not eligible for immediate retirement you can leave your contributions in the retirement fund and later become eligible for an annuity when you meet the criteria for immediate retirement (FERS) or reach age 62 (CSRS). You are not eligible to carry your insurance over under deferred retirement.
Leave
You will be paid in a lump sum for any annual leave you have left.
If you are eligible for CSRS retirement, your unused sick leave will be added to your length of service for the purpose of computing your annuity. If you’re a FERS transferee, you will receive either the sick leave balance on the day you transferred from CSRS to FERS, or your balance at retirement, whichever is less, added to your length of service for the CSRS portion of your annuity computation. Sick leave is not creditable toward a FERS benefit.
If you have three years of federal service, your sick leave can be re-credited to your account if you ever return to federal service.
Seniority
What happens to seniority would depend to a large extent on your agency and any applicable collective bargaining agreement.
** John Grobe, President of Federal Career Experts, is the contributing editor of FEDweek’s The Federal Employees Career Transition Handbook and our newest Complete Guide to Writing a Federal Resume and an expert in employment and job search issues. He provides career advising services to individual employees. John can be reached at (708) 771-2445 or johngrob@ripco.com. **
