The Federal Diary
The Federal Diary
Joe Davidson

Federal workers could enjoy a ‘phased retirement’ from the office

With their pay frozen and reduced by furloughs and their credibility at times questioned, you’d think federal employees would dash for the door as soon as they were eligible to retire.

Instead, many have pushed for a way to hang around the workplace a little bit longer, to ease into retirement while transferring their skills and knowledge to the next generation.

Joe Davidson

Joe Davidson writes the Federal Diary, a column about the federal workplace that celebrated its 80th birthday in November 2012. Davidson previously was an assistant city editor at The Washington Post and a Washington and foreign correspondent with The Wall Street Journal, where he covered federal agencies and political campaigns.

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Uncle Sam soon will make that easier to do.

On Wednesday, the Office of Personnel Management (OPM) will publish proposed regulations allowing feds to take “phased retirement.”

“Phased retirement will provide an alternative to the current all-or-nothing approach to retirement,” said Ken Zawodny, the OPM associate director for retirement services. “With approval from their agency management, outgoing retirees would work part time, while mentoring younger workers. This approach helps transitions occur smoothly, transferring valuable institutional knowledge from workers at the end of their careers.”

That’s a good plan, according to Joseph A. Beaudoin, president of the National Active and Retired Federal Employees Association (NARFE), who looks forward “to the swift implementation” of new regulations. “Many of these federal workers have 30-40 years of service and knowledge doing important jobs like regulating nuclear power plants and caring for America’s veterans. Our nation cannot afford to lose its most experienced employees to sudden or early retirements. The phased retirement program is a smart way to ensure the next generation of the federal workforce is prepared to build on the achievements of today’s dedicated federal employees.”

Mentoring isn’t just a goal of the program — it’s required. The part-time employees will be expected to spend 20 percent of their time mentoring. That requirement, the regs make clear, will be hard to shake: “OPM expects waivers of the mentoring requirement to be very rare.”

President Obama signed the law authorizing this program 11 months ago, but the rules are just now ready for public consumption. The public has 60 days to comment on the new regs before they are finalized.

It took this long to publish the rules, Zawodny said, because it “was an incredibly complicated process, given the implications for agencies and employees. OPM put together a cross-disciplinary team to make sure that, once drafted, the regulations would implement the intention of Congress while, at the same time, making sure that they were detailed enough to allow implementation, once finalized. That process necessarily was time-consuming and deliberate.”

Once implemented, here’s the way the program will work:

Phased retirement will allow a worker to partially retire, “while continuing employment on a part-time basis and continuing to earn additional retirement benefits proportionately based upon the additional part-time employment,” says the proposed regs that are scheduled for publication in the Federal Register.

The employee will be considered a part-time employee, according to the regs, and “will work half-time and will receive one half of what his or her annuity would have been had the individual retired completely from Federal service.”

The Congressional Budget Office estimated the program would save the government money because of lower employer contributions to worker retirement. Spending will drop by $427 million and revenue will increase by $24­ million over the 2013-2022 period, according to the CBO estimate.

“Phased retirement will encourage the most experienced Federal employees to extend their contributions to the Nation, and will operate as a tool to ensure continuity of operations,” the regulations document continues. “The main purpose of phased retirement is to enhance mentoring and training of the employees who will be filling the positions of more experienced employees who are preparing for full retirement. It is intended to encourage experienced employees to remain, in at least a part-time capacity, while less experienced employees are preparing to assume the duties of the employees who are planning to retire.”

The regulations, written in relatively plain English that once seemed like a foreign language to Federal Register announcements, point to the problem the new rules seek to solve:

“[U]nder prior law, the problem was that an individual who was retirement eligible but wished to continue employment on a part-time basis generally had little economic incentive to do so because an employee’s potential retirement benefits would often be equal to or greater than his or her salary would be for part-time employment.”

With the new program, employees would “receive more income than he or she would earn by simply changing to a part-time work schedule or by simply retiring. . . . Once these individuals fully retire, they will be entitled to a greater annuity than if they had fully retired at the time of transition to phased retirement, but less than if they had continued employment on a full-time basis.”

Participation is voluntary for workers meeting retirement requirements, a combination of years of service, including working full time for the previous three years, and age. Agency approval for participation is not automatic. The regs make clear that “an employee does not have an entitlement to phased retirement.”

Some are excluded.

“The law provides that employees subject to mandatory retirement (including Law Enforcement Officers, Firefighters, Nuclear Materials Couriers, Air Traffic Controllers, Customs and Border Protection Officers, or members of the Capitol Police or Supreme Court Police) may not participate,” according to the regulations.

The OPM’s proposed regulations are “a good first step,” said Jessica Klement, NARFE’s legislative director. “Our members have been asking time and time again when this will be implemented.”

Twitter: @JoeDavidsonWP

Previous columns by Joe Davidson are available at wapo.st/JoeDavidson.

 
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