Phased Retirement

Cary Stone

Agenda

• Definition / Purpose

• Who can apply

• Who cannot apply

• Entering Phased Retirement

• Questions for Agency

• BALs

• Directive Type Memorandum

• Agreement

• Estimates

• Retirement

• Forms

• BATs

Definition

• HR tool to retain employees who would have fully retired but are willing to continue working for agreed length of time on a part time basis while mentoring

• Paid for part time service worked (currently half – 50%) in addition to partial (currently half – approx. 50%) annuity they would be receiving had they fully retired

• NOT an ENTITLEMENT

Purpose

• Assist agencies with knowledge management and short term continuity of operations and mentoring

• Prepare next generation of experts, manage workforce, promote best practices and share knowledge

Who Can Apply

• Covered under CSRS or FERS

• CSRS• 55 years of age with 30 years of

service

• 60 years of age with 20 years of service

• FERS• MRA with 30 years of service

• 60 years of age with 20 years of service

• Employed for past 3 years under FULL TIME work schedule

• Willing and able to meet mentoring requirement (20% of part time schedule must be spent mentoring)

Who Can NOT Apply

• Employees who qualify for retirement under LEO / FF / ATC, Nuclear Materials Couriers, Capitol Police, Supreme Court Police and *Customs and Border Protection Officers

* Hired on/after 7/06/2008

• FERS MRA+10 retirees

• Disability retirees

• 62 with 5

Entering Phased Retirement

• Approval authority delegated to Agency

• Voluntary participation – requires consent of employee and the employing agency, must receive/have written approval

• Agency must provide written guidance on criteria used to approve / disapprove phased retirement applications

Questions for Agency

• Is a part time work schedule appropriate for the position?

• Is the employee willing and able to meet the mentoring requirement?

• How will the change to a part time work schedule impact the ability to meet work goals / objectives?

• Number of hours a phased retiree may work cannot exceed half time (40 hours a pay period)

BALs

• 14-106 Data Element Values for New Phased Retirement Program

• 14-108 Phased Retirement Employee FAQs

• 14-109 Phased Retirement Instructions for Personnel and Payroll Offices

• 14-110 Instructions for Personnel and Payroll Offices

• 14-111 Instruction Pamphlets for Completing Application for Phased and Full Retirement

• 14-112 SF 3116 Phased Employment / Phased Retirement Status Elections

• 14-208 Phased Retirement and FEGLI Program Guidelines

• 14-209 Phased Retirement and FEHB Program Guidelines

BAL 14-106

• Nature of Action Codes• NOA 615 – Phased Employment / Phased Retirement (entering phased

retirement)

• NOA 616 – Opt out of Phased Employment / Retirement (returning to full employment)

• NOA 307 – Full Retirement Status – Voluntary

• NOA 308 – Full Retirement Status- In Lieu of Involuntary Separation (ILIS)

• New Work Schedule Code: R (distinguishes between regular PT and Phased Retirement PT)

BAL 14-106

• Annuitant Indicator Codes• W – former CSRS Phased Retiree

• M – former FERS Phased Retiree

• X – former CSRS Phased Retiree who is also a retired military officer

• N – former FERS Phased Retiree who is also a retired military officer

• Y – former CSRS Phased Retiree who is also retired military enlisted

• P – former FERS Phased Retiree who is also retired military enlisted

BAL 14-108

• What is Phased Retirement? (see Definition)

• Who is eligible to participate? (see Who Can Apply)

• Are there employees who are excluded? (see Who Can Not Apply)

• How does Phased Retirement work? (GRB examples provided)

• How does the part time work schedule impact FEHB and FEGLI?• Employee is considered to be working full time – costs are the same as a full time

employee

• Are FERS employees eligible for the annuity supplement while in Phased Retirement? • NO

BAL 14-108

• Can employee retire or file for Disability while in Phased Retirement?• NO

• What happens if employee dies before entering full retirement?• Will be deemed to be a full time employee for purposes of

determining survivor benefits – Death In Service

BAL 14-109

• Employees in Phased Retirement work on a part time basis (40 hours a pay period) and draw a partial retirement benefit (approximately half)

• May continue to contribute to TSP

• Will earn LA and LS at the rate of a regular part time employee (4 hours of LA and 2 hours of LS per pay period)

• Military Deposit must be paid in full PRIOR to entering Phased Retirement

• Deposit / Redeposit must be paid PRIOR to OPM completing the Phased Retirement application

BAL 14-109

• Phased Retirement Annuity Computation

• CSRS• 1.5% x H3 x 5 years + 1.75% x H3 x 5 years + 2% x H3 x

remaining years & months = % x 50%

• FERS• 1% x H3 x years & months = % x 50% -or-

• 1.1% x H3 x years & months = % x 50% (if 62 years old w/ at least 20 years of service)

BAL 14-110

• Completing Election Form

• Completing Retirement Application

• Effective Date of Election

• Processing Personnel Action

• Submitting Records to OPM

• Withdrawing Election

• Electing full Retirement Status

• Opting Out

BAL 14-111

• Four new instruction pamphlets:• SF 2825 – Info and Instructions for Completing an Application for

Phased Retirement under CSRS

• SF 2826 – Info and Instructions for Completing an Application for Full Retirement Status (from Phased Retirement) under CSRS

• SF 3117 – Info and Instructions for Completing an Application for Phased Retirement under FERS

• SF 3118 – Info and Instructions for Completing an Application for Full Retirement Status (from Phased Retirement) under FERS

BAL 14-112

• SF 3116 is divided into 3 parts• Part 1A: Election of Phased Employment / Phased Retirement

• Part 2A: Election to End Phased Employment / Phased Retirement and Return to Regular Employment Status

• Part 3A: New Agency Consent to Continue Phased Employment / Phased Retirement

• Part 3B: Election to End Phased Employment / Phased Retirement Status Upon Move to Another Agency

BAL 14-208

• Phased Retirement FEGLI Guidelines• FEGLI coverage for CSRS and FERS employees – deemed to be

full time (amount of coverage, withholdings and employer contributions)

• During Phased Retirement, premiums withheld from employee’s salary

• Entering Phased Retirement – not considered a QLE to make a change

• Entering Full Retirement – Phased Retirement is creditable towards 5 years to be eligible to continue into retirement

BAL 14-209

• Phased Retirement FEHB Guidelines• FEHB coverage for CSRS and FERS employees – deemed to be

full time (withholdings and employer contributions)

• During Phased Retirement, premiums withheld from employee’s salary – maintains premium conversion benefits

• Entering Phased Retirement – not considered QLE to make a change

• Entering Full Retirement – Phased Retirement is creditable towards 5 years to be eligible to continue into retirement

Directive Type Memorandum (DTM)

• Still a work in progress, should be available early / late Spring 2015

• Will send out final copy once approved and signed

Agreement

• Also still a work in progress

• Goal is to have the same written agreement for all DoD Agencies

• Will have space reserved for specific remarks

• Signed / approved by employee, Supervisor and Approving Official

Estimates

• Who can request?

• Will there need to be an agreement/potential agreement in place prior to requesting?

• Will they have access in EBIS to run their own calculations?

• Will GRB be ready to calculate the new Phased Retirement estimates (3 will be required)• Entering Phased Retirement

• Entering full retirement from phased retirement

• Estimate if didn’t enter phased retirement and just continued working as a full time employee

Retirement

• Must have written agreement in place prior to submitting Application

• Can only enter Phased Retirement once

• Can be extended with a new agreement in place

• To go back to full time employment; employee, supervisor and approving official must agree

• At the end of the time limited agreement, Phased Retiree will enter full retirement

Pat FERS (entering Phased Retirement)

• Phased Retirement effective date: 12/31/2014

• High – 3: $66,858

• Current Salary: $69,440

• Creditable Service: 24 years 9 months

• Unreduced FERS Annuity: 24.75% x $66,858 = $16,547.36 ($1,378.95 monthly)

• Phased Retirement factor (50%): $16,547.36 x 50% = $8,273.68 ($689 monthly) *NO FERS Annuity Supplement is payable during PR

• $8,237.68 + [$69,440 (.50)] = $42,993.68

Pat FERS (entering Full Retirement)

• Full Retirement effective date: 12/31/2016

• High – 3: (deemed to have worked FT during PR) $72,210

• Creditable Service: 26 years 9 months

• Phased Retirement Annuity (updated by COLAs) applied during Phased Retirement Status:• 12/1/2015: No COLA applied – under age 62

• 12/1/2016: $8,273.68 plus 2.3% = $8,463.97

• Final portion of Full Retirement Annuity (no reductions and including unused LS credit):

• $72,210 x 29.425% = $21,247.79 x 50% (working %) = $10,623.90

• Full Retirement Annuity (no reductions):• $8,463.97+ $10,623.90 = $19,087.87 ($1,590.66 monthly)

Pat FERS (Regular Retirement)

• Had Pat continued working full time (not entering PR) and retired fully on 12/31/2016: • High – 3: $72,210

• 26 years 9 months of service (29.425%)

• $72,210 x 29.425% = $21,247.79 ($1,770.65 monthly) – (without reductions)

*Difference of $179.99 monthly ($1,770.65-$1,590.66)

Terry CSRS (entering Phased Retirement)

• Phased Retirement effective date: 12/31/2014

• High – 3: $66,858

• Current Salary: $69,440

• Creditable Service: 36 years 9 months

• Unreduced CSRS Annuity: 69.75% X $66,858 = $46,633.45 ($3,886.12 monthly)

• Phased Retirement factor (50%): $46,633.46 x 50% = $23,316.73 ($1,943.06 monthly)

• $23,316.73 + [$69,440 (.50)] = $58,036.73 annually

Terry CSRS (entering Full Retirement)

• Full Retirement effective date: 12/31/2016

• High – 3: (deemed to have worked FT during PR) $72,210

• Creditable Service: 37 years 9 months

• Phased Retirement Annuity (updated by COLAs) applied during Phased Retirement Status:• 12/1/2015: $23,316.73 plus 2.1% = $23,806.38

• 12/1/2016: $23,806.38 plus 2.3% = $24,353.93

• Final portion of Full Retirement Annuity (no reductions and including unused LS credit):

• $72,210 x 71.75% = $51,810.68 x 50% (working %) = $25,905.34

• Full Retirement Annuity (no reductions):• $24,353.93 + $25,905.34 = $50,259.27 ($4,188.27 monthly)

Terry CSRS (Regular Retirement)

• Had Terry continued working (not entering PR) and retired fully on 12/31/2016• High – 3: $72,210

• 37 years 9 months of service (71.75%)

• $72,210 x 71.75% = $51,810.68 ($4,317.56 monthly) – (without reductions)

*Difference of $129.29 monthly ($4,317.56-$4,188.27)

Forms

• SF 2825 – Info and Instructions for completing an Application for Phased Retirement under CSRS

• SF 2826 – Info and Instructions for completing an Application for Full Retirement Status (from Phased Retirement) under CSRS

• SF 3117 – Info and Instructions for completing an Application for Phased Retirement under FERS

• SF 3118 – Info and Instructions for completing an Application for Full Retirement Status (from Phased Retirement) under FERS

BATS Tracking

• Working with Dana on BATS• Track those entering Phased Retirement

• Track those returning from Phased Retirement to regular employment

• Track those leaving Phased Retirement for full retirement

• Track estimates requested for potential Phased Retirement

Wrap-up

• Review, Review, Review

• Stay on top of all the Phased Retirement BALs

• Watch all past and upcoming Phased Retirement Webinars from OPM

• Watch for updates on the ABC-C site as we get closer

Questions?