Congress approved the phased retirement program nearly 5 years ago. Close to 300 federal employees have now applied for phased retirement and almost 80 others have opted in and completed the mentoring requirements and retired from their agencies.
Per OPM’s latest count (June 27, 2017), 252 federal employees have applied for it. That’s well about the 90 employees who applied as of August 2016. Of those 252, 117 are CSRS participants and 135 are in the FERS system.
As much as 31 percent of the federal workforce will soon be eligible for retirement by September 2017.
NASA and the EPA have seen the most continued interest in the program. Further, the Departments of Agriculture, Commerce, and Interior, along with the Smithsonian Institution have all seen a stronger interest within the last year. The Veterans Department and Internal Revenue Service have also started using the program within the last year.
Those retirement-eligible federal employees who sign up for the program agree to work part time in their position while collecting half their salaries and half their accumulated retirement annuity. Once approved, they must commit part of their working time to mentoring other employees who plan to take over their job responsibilities once they leave.
The Congressional Budget Office originally projected a participation rate of 1,000 employees at any given time, would enter the program per year. This is according to CBO’s 2012 score of the Federal Employee Phased Retirement Act.
Even though the interest is rising among federal employees, the uptake is still disappointing for some federal employee groups who worked on the legislation with Congress.
The National Active and Retired Federal Employee Association said it still hears from members who ask when their agency will offer the program. “Some agencies still do not offer phased retirement, which is disappointing, particularly at a time when agencies have been asked to provide workforce reduction plans,” Jessica Klement, NARFE legislative director, said. “Highly-skilled and knowledgeable employees will be retiring in likely record number in the coming years. To ensure continuity of operations and be responsible stewards of taxpayers’ dollars, phased retirement offers those employees a unique opportunity to pass on their expertise.”
The CBO estimated agencies would save $427 million in direct spending and increase revenue by $24 million by 2022. “Implementing [the Federal Employee Phased Retirement Act] would decrease employer contributions to retirement accounts, thus reducing discretionary spending for those activities; such reductions in spending would be subject to future appropriation actions consistent with the bill,” CBO said.
However, one group isn’t surprised at the slow uptake: Senior Executives Association. “While SEA supported the passage of phased retirement legislation and many of our members anticipated using it, more recent interest among our members has diminished significantly,” SEA Executive Director Jason Briefel said.
One agency told SEA the current program provides little flexibility. This is because the ratio of work and retirement must be 50/50. Phased retirees can’t work overtime to support increases in workload, nor can they easily cut back hours if workloads or priorities shift. Further, an agency can’t end a phased retirees’ position before the employee agreement ends—even if the organizations’ needs change.
Individual agencies are responsible for issuing and implementing their own specific guidelines on phased retirement. However, many agencies are slow to reveal them and some agencies, like the Social Security Administration, have opted not to offer the program altogether.