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By: FEDweek StaffA Merit Systems Protection Board publication suggests that both federal retirees and agencies look more closely into the prospects of annuitants returning to work for the government at least part-time, saying the arrangement can benefit both sides.
It noted that those who retire under FERS below age 62 generally are not eligible for COLAs until they reach that age, making the recent high inflation rates “a particular hardship” for them. “Each year, the purchasing power of their pensions permanently decreases and is not recovered when inflation adjustments finally begin at 62. Furthermore, even once FERS retirees reach age 62, the pension adjustments are a full percentage point less than the inflation rate when inflation is at 3 percent or more,” it said.
Investment losses in TSP and other accounts due to poor market performance have added to a “distressing picture for retirees, particularly the most recent ones as the compounding effects of inflation eating into their principal will cut the deepest for those with the most years of retirement still to come,” it said.
In most cases, federal retirees returning to the government are subject to an offset between their salaries and their annuities, effectively meaning they get the higher of the two but not both. There are exceptions that allow a retiree to receive both but even when such an exception doesn’t apply, it says, there can be added benefits beyond a period of higher income. Those who work the full-time equivalent of one year become eligible for a supplement taking that extra time into account and those who work the equivalent of five more years are credited with both the extra time and a likely higher “high-3” salary rate.
“The agency can also benefit from this arrangement. First, the agency will have an employee with a wealth of experience on day one. Agencies can use this experience not only to deliver on mission requirements, but also to train and mentor new and developing talent and conduct quality checks for services and products. Secondly, if the annuitant is hired by the same organization they left, then they are a known quantity in terms of performance,” it says.
It added that agencies are allowed to send vacancy announcements directly to retirees in addition to the requirement to post them publicly, which “requires little effort and may reap great rewards for both the agency and its retirees . . . Not every retiree will want to return to the office, but in a tight labor market some retirees might be interested in doing so.”
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