Retirement Planning Retirement PlanningRetirement Planning
Advice on how to prepare for life after government.

Back to Work, Again


Last week's column on what happens if you seek to return to federal work after retirement sure generated a lot of reaction. So I decided it would be worth exploring the subject again, and looking specifically at how the rules have changed at the Defense Department.

First, here are some of the comments I received on the column:

  • "I can't stop laughing! There sure are a lot of confused people out there who haven't figured life out. Many employees cannot retire due to family/medical needs, fine. But why on earth would someone retire, then come back to federal civil service knowing that their retirement monies would be reduced or stopped? Dumb, dumb and dumber."
  • "The concept in this article is laughable, idiotic and makes no economic sense for a sane, half-witted retired fed employee."
  • "The only way it would work is if the federal agency hiring would give the annuitant an offset waiver, [under which] the employee could return at their old grade up to a GS-12 without a hit against retirement earnings."
  • "This article reinforces my belief that the only older annuitants that the government could possibly recruit are not the ones desired. If anyone is ignorant enough to sign back on board after securing their retirement under conditions that threaten that same retirement, these are not the folks we want leading the way."

These people aren't the only ones who think the rules on re-employed annuitants could use some changing. Earlier this month, Office of Personnel Management Director Linda M. Springer told a House appropriations subcommittee that the agency is "working to develop a proposal, as a means of combating the forthcoming retirement wave … that would allow federal agencies to rehire recently retired federal employees who can assist with short-term projects, fill critical skill gaps and train the next generation of federal employees without having a reduction in the annuity payments they have already earned."

So there you have it. Sometimes the old rules become outdated and need to change. At one time, it was in the government's best interest to discourage re-employment, but in times of need, the opposite can be true. As I noted last week, there already are changes taking place: Under certain circumstances, agencies can use provisions of the 1990 Federal Employees Pay Comparability Act to hire federal retirees without offsetting their salaries.

Following the terrorist attacks on Sept. 11, 2001, OPM delegated the authority to waive the salary offset. This delegation remains in effect until the president terminates his declaration of a national emergency resulting from the attacks.

The downside of this authority is that re-employed annuitants hired under it aren't entitled to future retirement benefits based on this additional service. Under the original rules for re-employment, it's possible to accumulate future retirement benefits if the re-employment lasts at least one year.

Defense Differences

One reader reminded me after last week's column that "the rules on re-employed annuitants in DoD are almost totally different as a result of a law passed five or so years ago."

Indeed, the 2004 National Defense Authorization Act provided the Pentagon with specific re-employment authorities, including the ability to waive salary offsets. David S.C. Chu, undersecretary of Defense for personnel and readiness, outlined the reforms in a March 2004 memo.

The policy applies to annuitants rehired after Nov. 24, 2003. The jobs can only be offered at the GS-15 level (or the equivalent) and below. And annuitants hired under the authority can only be brought on under the following circumstances:

  • For positions that are hard to fill, have a severe shortage of candidates, are critical to an agency's mission or are necessary to complete a specific project.
  • For people who have unique or specialized skills.
  • To bring on mentors for less experienced employees or provide continuity during organizational transitions. (But such positions can only last for a year's worth of full-time employment.)

By the way, the new National Security Personnel System that many employees are shifting to does not affect rules governing retirement, health and life insurance, leave, attendance and other similar benefits. If you were to return to work under NSPS, you would be treated as any other re-employed annuitant.

This is a good time for federal retirees at least to consider re-employment. Besides putting your skills to use, another major advantage is the option to test your retirement income. Some re-employed retirees live on their retirement benefit and bank their re-employment income. At the end of the re-employment period, this banked income can be used to pay off a mortgage balance or other debt to make full retirement more comfortable.

Tammy Flanagan is the senior benefits director for the National Institute of Transition Planning Inc., which conducts federal retirement planning workshops and seminars. She has spent 25 years helping federal employees take charge of their retirement by understanding their benefits.


Tammy Flanagan has spent 30 years helping federal employees take charge of their retirement by understanding their benefits. She runs her own consulting business at and provides individual counseling as well as online training for the National Active and Retired Federal Employees Association, Plan Your Federal Retirement as well as the Federal Long Term Care insurance Program. She also serves as the senior benefits director for the National Institute of Transition Planning Inc., which conducts federal retirement planning workshops and seminars.

For more retirement planning help, tune in to "For Your Benefit," presented by the National Institute of Transition Planning Inc. live on Federal News Radio on Mondays at 10 a.m. ET on WFED AM 1500 in the Washington-metro area. Archived shows are available on

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