Fed Group Wants More Perks, Broader Eligibility for Partial Retirement

Phased retirement can help agencies deal with reduced budgets, NARFE says.

A federal employee group has asked for more benefits for employees looking to partially retire, a new option allowing feds to work part-time as they ease their way into a full retirement.

Partial, or phased, retirement allows eligible federal employees to work half their typical hours, while receiving half of their normal pay and half of their normal retirement annuity.  The Office of Personnel Management in June issued proposed rules for implementing the change, one year after President Obama signed the new option into law.

The National Active and Retired Federal Employees Association generally approved of OPM’s initial guidance -- saying the plan would help improve the “continuity of government operations” -- but said the agency should guarantee more benefits for partially retired federal workers. While the OPM rule would allow phased retirees to enroll in the Federal Employees Health Benefits Program and the Federal Employees Group Life Insurance Program, it was silent on several other benefits available for full-time workers. The federal dental and vision benefit, the Federal Long Term Care Insurance Program and flexible spending accounts should also be open to partial retirees, NARFE said.

NARFE also called for OPM to ensure phased retirees receive “appropriate” agency matching contributions into their Thrift Savings Plan accounts.

OPM should also broaden the scope of employees eligible to retire part time, NARFE said, and include employees who are at least 62-years-old and have at least five years of service. The draft rules would require employees to have at least 20 years of service to partially retire.

“In this time of austerity budgeting, phased retirement should be extended to as many retirement-eligible employees as possible,” NARFE said. “With many federal agencies in a hiring freeze, phased retirement may be the difference in whether or not a position stays filled, at least part time.”

The group also suggested stricter rules for the mentoring provision of phased retirement. OPM said partial retirees must dedicate at least 20 percent of their working hours to “mentoring activities as defined by an authorized agency official.” NARFE called this provision too vague and requested more detailed guidance to define mentoring. The organization also said OPM should set stricter guidelines to ensure, when possible, partial retirees mentor their ultimate replacement. 

To further provide incentives for feds to partially retire, NARFE said the federal government’s human resources agency should ensure phased retirees younger than 62 are still eligible for their Federal Employees Retirement System supplement.

The window for public comment on the proposed rules closes Monday, and OPM plans to issue final rules in December.

“After the public comment period closes [Monday], OPM will review the comments and make determinations about any changes before issuing the final regulations,” the agency said. 

(Image via Seregam/