Defense Rolls Out Phased Retirement For Civilian Employees

The Defense Department on Tuesday announced it will now allow eligible civilian employees to partially retire while remaining on the job part-time to help better manage its workforce needs.

The decision by the government’s largest department to implement phased retirement – nearly four years after Congress passed a law allowing the practice – could spur other agencies to roll out their own programs to take advantage of the flexibility. As of mid-January, less than 50 people across government had applied for the benefit, according to the Office of Personnel Management. That’s because many agencies either haven’t finalized phased retirement plans yet that meet the needs of their missions as well as collective bargaining agreements, or aren't offering the benefit to eligible employees. It’s also possible some federal employees don’t know what their options are, or just aren’t interested/eligible.

“Participation in the Phased Retirement Program is voluntary and requires the mutual consent of both the employee and an authorized DoD component official,” said the June 21 memorandum from Peter Levine, acting undersecretary of Defense for personnel and readiness. “DoD components may limit the number of employees included in the Phased Retirement Program, as appropriate.”

It’s the latest personnel-related change that the Pentagon has unveiled in recent months, as part of the department’s broader effort to recruit and retain civilian employees and service members.

Agencies have broad discretion in deciding how to implement phased retirement, including deciding which jobs are eligible for it, determining mentoring activities and deciding how long an employee can remain partially retired. When eligible employees can apply for the opportunity will depend on how quickly their individual agencies can figure out a framework for offering the program.

According to the DoD memo, “retirement-eligible employees must have been employed on a full-time basis for at least a consecutive three-year period ending on the effective date of entry into phased retirement status.”

Specifically, phased retirement allows eligible feds to work 20 hours per week, receiving half their pay as well as half their retirement annuity. Those employees who enter phased retirement must devote at least 20 percent of their work time, or about 8 hours a pay period, to mentoring other employees, ideally for those who take over for them when they fully retire. The idea is to keep talented employees with valuable institutional knowledge on the job a little longer so they can train other workers, while they also enjoy a partial retirement.

Richard Thissen, national president of the National Active and Retired Federal Employees Association, praised Defense for implementing phased retirement for civilian workers, nothing that since the tool became law four years ago, “NARFE’s phones have rung off the hook with calls from federal employees wondering when phased retirement will be available at their agencies.” Thissen added that “for many, many other federal employees, however, this news will add to their frustration because the future of phased retirement at many agencies is still uncertain.”

The Commerce Department reportedly announced recently its plans to implement phased retirement. Other agencies currently offering the benefit to employees include the departments of Energy and Housing and Urban Development.