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Participation is entirely voluntary, and requires the mutual consent of both the employee and employing agency. In order to participate, an individual must have been employed on a full-time basis for the preceding three years. Under CSRS, the individual must be eligible for immediate retirement with at least 30 years of service at age 55, or with 20 years of service at age 60. Under FERS, the individual must be eligible for immediate retirement with at least 30 years of service at MRA (minimum retirement age 55-57 depending upon year of birth), or with 20 years of service at age 60.
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Phased Retirement is a new human resource management tool made possible by section 100121 of Public Law 112-141, the "Moving Ahead for Progress in the 21st Century Act," or "MAP-21," approved on July 6, 2012.
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No unused sick leave can be used in the computation of the Phased Retirement annuity. However, at full retirement the unused sick leave will be taken into account. While the computational provisions are somewhat complex, the value of the sick leave in that computation will be the same as for an individual retiring from a full-time position.
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Deposits and redeposits (including for military service) must be satisfied (either by payments or annuity reduction, as applicable) prior to entry into Phased Retirement status. Any reduction in annuity or loss of service credit at the time of entry into Phased Retirement will be permanent for the employee. No deposits or redeposits can be made by the employee at a later time, including at the time of full retirement.
However, in the case of a Phased Retiree’s death-in-service, the survivors can make deposits or redeposits on the same basis as if the decedent had not been a Phased Retiree.
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Yes, if the employing agency agrees to the change. The Phased Retirement annuity will then terminate. Upon retirement, the individual’s retirement will be calculated under the laws then in effect, with the period of Phased Retirement treated as part-time service. Once an individual has gone back to full-time employment, they cannot elect to go back into Phased Retirement.
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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. However, “grandfathered” Customs and Border Protection Officers who are not subject to mandatory retirement may participate.
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Initially, individuals will only be able to transition to a half-time schedule. After there is experience with the program, OPM may issue regulations that provide for other work and retirement proportions.
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FEHB and FEGLI will stay with the employing agency. FEGLI benefit coverage amounts will be based upon the full time salary for the position. The FEHB employer contribution will be the same as for full-time employees.
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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 and to facilitate knowledge management. The main purpose of Phased Retirements 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, until less experienced employees are fully equipped to fulfill the same duties and responsibilities as those employees who wish to retire.
An effective Phased Retirement plan has been a long-sought goal. However, under 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 their salary would be for part-time employment.
Phased Retirement will in essence permit an individual to retire from part of their employment, while continuing the remainder and continuing to earn additional retirement benefits proportionately based upon the additional less-than-full-time employment.
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Phased Retirement Annuities will be subject to court orders providing for division, allotment, assignment, execution, levy, attachment, garnishment, or other legal process on the same basis as other annuities.
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To make this workable and avoid intractable administrative problems, no survivor benefits can be based upon a Phased Retirement annuity. If the individual dies prior to full retirement, survivor benefits will be those applicable for an employee who died in service, with provision for minor computational adjustments necessitated by the unique nature of Phased Retirement.
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Periodic medical exams, if required, are paid out of your pocket.
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Employees participating in phased retirement will be paid for the part-time service they continue to provide the government and will receive additional credit for that service toward their full retirement. These employees will also begin receiving annuity payments, consistent with the retirement benefits they were entitled to prior to entering phased retirement status, pro-rated for the portion of the workweek they spend in retirement.
When the Phased Retiree fully retires, the revised annuity calculation will provide pro-rated service credit for additional time worked during phased retirement.
This law incents participants with valuable experience to phase into retirement by providing phased retirees with more income than they would earn working part time, and more income than they would earn by fully 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 during the period of Phased Retirement.
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