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By: FEDweek StaffEach year, some federal retirees return to government employment, for personal, career or financial reasons. If you are thinking of becoming one of them – or if you are considering your options to do so if you signed up for OPM’s deferred resignation program, are separated via buyout or RIF, here are some things to think about.
If you are a CSRS retiree, your annuity will stop if you fall into one of the followings four categories.
1. You are a disability retiree whom OPM has found recovered or restored to earning capacity prior to reemployment;
2. You are a disability retiree who wasn’t disabled for your National Guard technician position but was awarded a disability annuity because you were medically disqualified for continued membership in the National Guard;
3. You are a retiree who was involuntarily separated from your job (unless it was required by law based on age and length of service or for cause) and your new job if permanent in nature (e.g., career, career-conditional or excepted); or
4. You are a retiree who received a Presidential appointment subject to retirement deductions.
If you are a FERS retiree, only the first two categories apply.
If your annuity stops, you’ll have the same status as any other federal employee in an equivalent position and with a similar service history. When you leave government again, your annuity will be reinstated unless you are entitled to either an immediate or deferred annuity based on the new separation.
Most retirees whose annuity stop on reemployment are involuntarily separated CSRS employees whose careers have been cut short by a RIF, reorganization or transfer of function. If you were allowed to retire early under the lowered age and service requirements, when you return to work, you’ll be treated as if you are simply completing an interrupted career.
On the other hand, if you met the age and service requirements for an immediate retirement, when you return to work your annuity will continue without interruption. However, with rare exception, the salary you receive will be reduced by the amount of your annuity. If you work part time, the reduction will be proportional.
One of the best reasons for returning to work after retirement is to increase your retirement benefits. As a reemployed annuitant, you can earn either a supplemental or a redetermined annuity. If you work as a reemployed annuitant on a full-time, continuous basis for at least one year, you’ll be entitled to a supplemental annuity. If you work part time, you’ll have to work longer. If you work for at least five years (or the part-time equivalent), you’ll be eligible to elect a redetermined annuity, which replaces the one you are currently receiving.
Potential increases in your annuity aren’t a gift. They must be paid for either with retirement contributions, which are mandatory for reemployed annuitants covered by FERS but optional for those covered by CSRS. The amount of the retirement deduction or deposit is a percentage of your basic pay before it is reduced by your annuity.
FYI: There are exceptions where the rules above don’t apply. The most important exception is the one that allows some reemployed annuitants to receive both their annuity and the full salary of their new positions. That exception mainly relates to positions for which there is 1) exceptional difficulty in recruiting or retaining a qualified employee, 2) a direct threat to life or property, or 3) a circumstance that warrants emergency employment.
If you are a retiree who is being considered for reemployment, be sure to ask if one of the exceptions applies to you. If it does, you need to be aware that no matter how long you work, by law you won’t be entitled to either a supplemental or a redetermined annuity. And you won’t be able to make a deposit to get credit for that time. For annuity purposes, it will be just as if you’d never gone back to work.
Note: If you received a buyout and return to work before the end of five years, with rare exception, the law requires that you repay the entire amount no later than the date on which you report for duty. If you didn’t receive a buyout (or are one of those rare individuals who was granted a waiver), your annuity will either continue to be paid or it will stop. Which of these two things happens will depend on your status as a retiree.
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Order Formally Launches ‘Schedule Policy/Career,’ Adds Category of Appointees
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A Pre-RIF Checklist for Every Federal Employee, From a Federal Employment Attorney
Work Longer or Take the FERS Supplement Now: Which is Better?
See also
Alternative Federal Retirement Options; With Chart
Primer: Early out, buyout, reduction in force (RIF)
Retention Standing, ‘Bump and Retreat’ and More: Report Outlines RIF Process
