Will VERA and RIFs Impact Your FERS Benefits? Disability Retirement is a Secure Alternative

If you’re a federal employee who’s been reading the news lately, you may be worried about the Trump administration’s Department of Government Efficiency (DOGE). You’re not alone.

The new Elon Musk-led department has proposed a Voluntary Early Retirement Authority (VERA) and Reductions in Force (RIF) to deal with federal budget issues.

While their goal may be to give agencies more flexibility, VERA and RIFs also create questions for federal workers about job security – especially for those already dealing with a health issue.

But here’s the good news: Federal Disability Retirement is still a secure option if you’re struggling to do even one part of your job because of an injury or illness. In fact, with better long-term benefits and more financial security, now might be the best time to explore Disability Retirement if you’ve been waiting.

Read through for more on if VERA and RIFs will impact your FERS benefits and how Disability Retirement can be the long-term financial protection you need.

Will VERA and RIFs Impact Your Regular FERS Benefits?

In short, no, we don’t expect VERA or RIFs to affect FERS benefits.

Annuity payments

• • Your retirement annuity calculation won’t be affected. It will still be based on your years of service and your highest three consecutive years of pay (your high-3 average).
  • VERA note: Your service requirement may be reduced, meaning your years of service won’t keep increasing until 62. This would mean smaller payments for you.
  • RIF note: A RIF could lead to a reassignment, furlough, or separation. You won’t lose your benefits, but again, they won’t increase.
  • Disability Retirement note: You’ll maintain a consistent income and keep adding years to your pension, which means a larger payout (potentially much larger) at 62 than with VERA or a RIF.

 Insurance

• • As long as you’re eligible, your health and life insurance should remain available into retirement.
  • If you’re not eligible for retirement and are separated because of a RIF, you may have to secure a Temporary Continuation of Coverage (TCC) to keep your FEHB plan, which requires extra steps and fees.

Availability of Disability Retirement

• • VERA and RIFs won’t change the process or requirements for Federal Disability Retirement. How your agency handles these two programs also won’t influence how the OPM evaluates your disability retirement case.

The Benefit of Exploring Disability Retirement Now

You won’t have to make a rushed decision

• • If faced with either VERA or a RIF, you’ll likely feel pressure to act quickly. While an immediate solution like VERA might seem more appealing, if you’re eligible, Disability Retirement is the more financially secure choice for the long-haul. Don’t make a life changing decision under stress.

You’ll keep yourself protected

• • When a RIF happens, agencies typically try to keep employees who are doing their jobs effectively. If your health issues are already limiting your job performance, it might put you at a higher risk of being let go.

There’s a significant financial impact

• • A program like VERA typically gives incentives for retiring early, but it won’t give you the same long-term benefits that Disability Retirement would:
    • • A steady monthly payment until your regular retirement kicks in
      • The ability to keep your health and life insurance with no need for a TCC and the costs involved
      • Continued years of service into your pension
      • The option to get a new job in the private sector and earn more money

Why Disability Retirement Could Be the Right Choice

Avoid extra stress:

• • You could be on your way to long-term financial security with Federal Disability Retirement instead of feeling the pressure to make a quick decision that could impact your future and finances for years to come.

Avoid a layoff:

• • With Disability Retirement, you don’t have to deal with the sting of a potential layoff from a RIF. The story of your career stays in your hands, not the federal government’s.

Protect your financial future:

• • If your health condition is already making work difficult, Disability Retirement offers you consistent income and lets you keep building years into your pension so your payments at 62 are higher – two benefits VERA or RIFs can’t compete with.

So, with a RIF, the decisions are out of your hands. And while VERA offers an early out, it comes with major financial trade-offs, like smaller annuity payments and less pension growth, if any.

If you’re already struggling at work because of an illness or injury, exploring Disability Retirement now can safeguard your money and your benefits during unpredictable federal changes.

If you don’t know where to start or aren’t even sure if you qualify, reach out today and set up a free consultation. We’re here to help you think through your situation on your timeline, and help you make the decision that’s best for you.