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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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