When you approach a new swimming pool for the first time, do you dive headlong into it or do you dip a toe in first?
If you are a toe-dipper who likes to test the waters before going all the way in, odds are you are anxiously awaiting a new government phased- retirement program. When implemented, it will permit some employees to work a couple of days a week both testing the retirement waters, finishing up work and mentoring their replacements.
The problem for many feds is this: When is the phased-in-retirement program going to be phased in? The comment period on how to implement the year- and-a-half old law ended Aug. 5. Some people expected it would be in place by early 2014. But as a growing number of feds have pointed out, early 2014 starts next month. Here’s what one lady-in-waiting said about it:
“I’ve been eligible to retire for over a near now and have been holding off waiting for the Phased Retirement to be unveiled. I know the Federal Register notice and comment period took almost a year and I’ve just been told the OPM may be ready to send out by Spring 2014. (It has obviously been reprioritized).
“Just wondering, besides benefits for gay couples, which I agree is a priority, what else is holding OPM back? We are being told that agencies are losing employees, there are hiring freezes so no backfilling and retirement eligibility in some agencies is 20 percent. I’m also a manager and would love to scale back hours while mentoring on accounting systems that would make life so much easier for them down the road — a win-win! I’m a GS 14 and have 39 years under CSRS and a healthy TSP, so this is not financially driven. Is OPM not cognizant of the potential brain drain some are already seeing … I’m trying to hold on but like other federal workers, frustration many win out. I feel the government is shooting itself in the foot when there is a viable plan ready to put in motion…” —Frustrated Federal Worker
So when is it coming? Good question.
Here’s a few items to keep in mind courtesy of Robert Braunstein, a benefits specialist with the National Institute of Transition Planning:
Under phased retirement, feds will be expected to spend 20 percent of their time mentoring other employees.
The program is not an entitlement, meaning workers must get approval from their agency.
To be qualified for phased retirement an employee must:
Be in full-time status for the immediate preceding three years of their employement.
Be eligible for immediate retirement that is not age reduced.
Not be subject to mandatory age retirement.
Braunstein also had this to say:
“Employees who enter phased retirement will be considered active part-time employees, not reemployed annuitants. In general, their part-time schedules will be limited to half-time, i.e. 20 hours per week, with rare exception. They will receive income from a combination of their part-time employee salary (at 50 percent) and partial payments from their retirement annuity (also 50 percent). Accumulated unused sick leave is not used to determine the partial annuity benefit as it is available for use and continues to accumulate in phased retirement. Phased retirees accrue future retirement annuity amounts proportional to the time they work. For calculation purposes, the additional work during the phased retirement period will be prorated as if they had worked half-time. During phased retirement, annual Federal employee pay adjustments, when applicable, will apply to the salary portion of their pay, and retiree Cost of Living Adjustments (COLAs) will apply their annuity portion.
“Health insurance (FEHB) and life insurance (FEGLI) stay with the employing agency during a phased retirement. The FEHB employer contribution is the same as that for full-time employees and phased retirees continue to pay premiums on a pretax basis (a benefit that typically goes away for most fully retired employees). FEGLI coverage is similarly based full-time salary rates for phased retirees instead of their part-time salary (which would be the case if the employee were in true part-time status).
“When a phased retiree fully retires, their final annuity will be calculated to include their original phased retirement annuity (with any COLAs that may have accrued) plus one-half of the annuity that would have been payable at full retirement as if they had not entered phased retirement. This half would include any employee pay raises that occurred during the phased period and would add remaining unused sick leave balances.
“Also worth noting, phased retirees could have a one-time opportunity to return to full-time status if their employing agency agrees. Should this occur, the employee would not be able to return to phased retirement status.”
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