Retirement Policy

The Senate has signaled its willingness to tweak federal retirement eligibility rules for the employee’s benefit, a potentially positive development as potentially thousands of employees face retirement decisions earlier than expected due to base closings, contracting out or other management actions.

The Senate action came in the form of an amendment to the Transportation-Treasury appropriations bill involving employees affected by a Federal Aviation Administration decision to contract-out certain flight services, affecting several thousand employees. Although the contract already has been let, the House added language to its version of the bill to effectively block the action. However, faced with a threat of a veto over that approach, the Senate instead acted to aid employees who were close to retirement eligibility, but not quite there, as of the time of the contract.

One provision took a now-familiar approach of allowing employees to use accumulated annual leave to extend their time of service if they are close enough to eligibility that the extension would make the difference. But another provision appears to be unique, at least in recent times: designating the affected employees as temporary federal workers and continuing their status as federal employees-paid by the government, but assigned to the contractor or to jobs elsewhere in the agency or in another agency-with benefits, for up to two years in order for them to reach retirement eligibility.

The provision faces a conference, where it could yet be changed-or dropped. However, the Senate’s willingness to craft such a provision could signal a new direction in creating solutions for employees needing help with retirement eligibility issues.