Retirement Policy

The Merit Systems Protection Board has said that the new phased retirement arrangement, once it actually becomes available, "could be a useful tool to retain valuable, highly-experienced employees for a limited time and to help less-experienced employees prepare for new roles and responsibilities."


Under the authority, enacted in mid-2012 but still not available pending implementing rules, agencies could offer retirement-eligible federal employees the option of switching to half-time work, collecting half of the annuity they earned to that point and half of the salary of the position. They would be treated as active employees for most benefit purposes and would gain credit toward a larger annuity when they fully retired.

"Phased retirement, if properly used, should contribute to efficient and effective use of the federal workforce," MSPB said in a recent report. "For example, phased retirement could reduce disruption of mission-critical functions that can result from employee retirements, especially when such retirements coincide with—or are driven by—organizational downsizing and restructuring."

However, MSPB noted that "it is not anticipated that large numbers of employees would be interested in this arrangement." Further, phased retirement "is not a substitute for workforce planning and succession management, areas in which the federal government’s planning and execution have often been lacking."