If you are a Federal employee, you may be surprised to find a new email in your inbox offering yet another opportunity to leave your government job immediately, and defer your actual separation date until September 30, 2025. It’s being called Deferred Resignation 2.0 (DRP), and has been offered, this time, on an agency basis to help reduce the entire Federal workforce to meet the goals set by the current administration. 

     So far, a host of government agencies have offered the second round of the Deferred Resignation Program to its employees with various deadline dates and they include: Department of Defense, Department of Energy, Department of Transportation, Department of Interior, Department of Treasury, Department of Agriculture, the IRS, Department of VA, SBA and probably a few others with no doubt more to come before this fiscal year is over. Was that first DRP offer a missed opportunity you should accept this time? Let’s make sure you understand what the DRP promises.

     As with the initial DRP memo of January 28^th, the second round proposes that interested employees contact their supervisors or, depending on your agency, respond directly through a portal, to accept the opportunity to resign.

     Under the DRP, employees will enter a transition period, the starting date to be specified by the agency, during which they are not expected to work and will receive paid administrative leave until September 30, 2025 when their Federal employment will end.

     What are the parameters of the DRP program?

     First that you are eligible to apply. You are eligible if you are a full time Federal employee with the exception of: the military personnel of the armed forces, the United States Postal Service, personnel in positions related to immigration enforcement and national security and those related to public safety. Additionally, each Federal agency may identify critical positions that may exclude this offer.

     Second, once an employee accepts the DRP, the decision is not to be rescinded. An employee who accepts DRP then changes his mind may request that his agency rescinds the resignation, but it is up to the agency to review a request and make a decision. In many cases once an employee has been placed on administrative leave, that may serve as a valid reason to deny a request to rescind.

     Third, if you accept the DRP and wish to retire or resign before the deadline of September 30, 2025, you may do so. But, if you wish to extend the deferred resignation date past September 30, 2025, the DRP does not allow this unless you are planning to retire by December 31, 2025 in which case the date may be extended to your planned retirement date this year.

     During this period of deferring your resignation, many agencies are also offering the Voluntary Early Retirement (VERA) which allows Federal employees to retire early with unreduced benefits. If an employee qualifies for and decides to retire under the VERA, they must apply for retirement by the end of the VERA offering, which may be different from the end of the DRP. Remember, to be eligible to do a VERA, an employee with at least 25 years of qualifying Federal service may leave at any age, and an employee with 20 years or more Federal service, but less than 25 years may leave at age 50 and over.

     If an employee is eligible for a VERA, he may still choose to leave under the DRP and effect his retirement date before the deadline for the VERA. So, if an employee is eligible for the VERA today, but chooses to leave under the DRP, he may separate now and choose to apply for the VERA on September 30, 2025, provided the VERA is offered through that date. The employee would still accrue retirement and leave credit for the period starting on the day of his separation and going through the end of September, and the retirement date would begin October 1, 2025.

     As with the initial DRP offer, agencies may impose exemptions to the DRP and the VERA for employees whose positions are considered critical. Each agency offering the VERA and/or DRP should include those positions that are exempt from these programs.  

     And last, according to the original DRP description, accepting the deferred resignation offer does not affect your ability to work for the Federal government in the future and does not affect your ability to do regular retirement during the DRP offer. Since the Federal workforce is expected to continue to go through significant changes, please remain aware of your actual retirement options as you make important separation decisions. 

     Keep in mind, Federal retirement benefits are payable to you for the rest of your life. Make sure you know when you qualify.

A special provisions retirement (payable for special category employees like law enforcement officers (LEOs) and firefighters) is used ONLY in computing an immediate retirement. This type of retirement provides a more generous method of computing the amount of retirement payable because these employees are retirement eligible with fewer years of service and at a younger age.
The age and service requirements to qualify for a law enforcement retirement are:

Age Requirements	Law Enforcement/Firefighter Service Requirements
50	20 years of service
Any Age	25 years of service

Keep in mind, qualifying law enforcement/firefighter service includes work after a transfer to a supervisory or administrative position as long as the work is still in the same capacity and there is no break in law enforcement service of more than 3 days. The determination whether service qualifies as special provisions entitlement is made by the appropriate administrative authority of an agency, usually the agency head. The employing agency must submit a certification letter with an employee’s retirement package to OPM to certify service covered under the special retirement provisions.
The special provisions retirement formula is far more generous than the one used for regular FERS retirement. See the formula below:

FERS Formula	Total
1.7% x Hi 3 average salary x first 20 years=
1.0% x Hi 3 average salary x remaining years=
	Annual Benefit

    
The question is, if you separate from a law enforcement/ firefighter position before you are eligible for a special provisions retirement, what retirement benefits will you receive?
You will not be paid a LEO retirement. Special provision retirements are paid only for immediate retirements. An immediate retirement requires an employee to have qualifying age and service on the date of separation, and payments begin within 30 days after separation.

A recent question was posed by a LEO who had worked for 20 years as a law enforcement officer, but was under age 50 and leaving Federal service. She wanted to know when the deferred retirement would be payable and if she would receive the LEO computation.
Though she has 20 years of LEO service, she is separating before age 50, and therefore does not qualify for immediate retirement. She will later qualify for a deferred retirement under regular FERS at her minimum retirement age, with no age reduction. To review the retirement computations for regular FERS, please see the previous article on “The Federal Retirement Benefit.”

Additionally, with a deferred retirement, she will not qualify for coverage under the Federal Employees Health Benefits (FEHB) or under the Federal Employees’ Group Life Insurance (FEGLI) programs. She will not receive the FERS Annuity Supplement which normally starts for LEOs at retirement and ends at age 62. And last, she will receive no credit for accumulated unused sick leave in her deferred FERS computation.

However, she may recover her law enforcement retirement if she considers returning to Federal service later and retiring after she reaches the appropriate retiring age. In the above example, if this employee returns to work for the government and reaches age 50, she would be able to retire with enough qualifying LEO service for an immediate retirement and retain FEHB and FEGLI coverage as long as she enrolls immediately when rehired. She would be eligible for the FERS supplement, and her unused sick leave would now be included. Best of all, she does not have to return to a law enforcement position.

Please be aware of your retirement rights as special provisions employees. The OPM Handbook for CSRS and FERS employees devotes an entire chapter to Special Category retirements. You may access this information at:  www.opm.gov. Under the retirement section, Forms and Publications, you can find the Handbook, Chapter 46 for Special Category retirements.

In our previous article, Know Your Retirement Rights, we explored the retirement eligibility rules for Federal employees facing possible termination. It is your responsibility to know if and when you are eligible for an immediate retirement. It is also important to know how much a Federal retirement benefit will be. This week’s article explains the Federal retirement pension for CSRS and FERS.
First, the Federal pension is a monthly benefit based on the following:

Total length of Federal service
High-3 average salary
CSRS or FERS formula

Total Length of Federal Service
Do you know how much total service you have? Generally, employees count their total service by starting the day they were hired and ending the date they separate. However, throughout your career, your service may be adjusted for a number of reasons, and you may have less service than you think.
Common reasons service may be adjusted are: different types of appointments, breaks in service, failure to pay for deposit/redeposit service, transfers to different Federal retirement systems, and moving to special provisions service to name a few. To verify the total years of service worked, employees need to know their retirement service computation date (RSCD). It may be different from the date you entered Federal service. When possible, verify your retirement SCD with your Human Resources department.
Once you’ve verified the RSCD, subtract this date from the date you are leaving Federal service to get your total service.

Computing Total Length of Service

	YEAR	MONTH	DAY
Separation date	2025	07	31
RSCD	-1999	03	24
Total Service	26	04	7

If an employee has worked long enough to be eligible to retire, unused sick leave will be credited to increase the length of service. Sick leave is converted from hours to months/years.
So, if an employee is retiring with 1100 hours of unused sick leave, the sick leave conversion chart, found at www.opm.gov in the OPM Handbook for CSRS and FERS Retirement, Chapter 50, will be used to determine how many extra months and days of service will be added. Let’s say you have 1100 hours of unused sick leave. 1100 hours converts to 6 months, 10 days of service. This extra service is added to the service the employee has worked to determine total service.

High 3 Average Salary

The high 3 average salary is the 3 consecutive years the employee has been paid at the highest pay rates of their Federal career. During the high 3 average salary period, the types of pay that count will be:

Regular pay
Locality adjusted pay
Environmental differential pay, if part of annual salary
Special pay rate for recruiting/retention if in annual pay

The high 3 average salary will not include the following:

Lump sum payment for accrued and accumulated annual leave
Bonuses
Overtime
Night Differential unless Wage Grade employee
Travel allowances

Many government agencies have self-service platforms that provide employees a portal to manage their benefits and retirement information. Government Retirement Benefits (GRB), MyPay, and EPP are a few such platforms. From here you may print retirement estimates for planning purposes. To understand how OPM calculates retirement benefits, the formulas are listed below.

 Retirement Benefit Formula

The CSRS formula is as follows:
1.50% X high-3 X total service =
1.75% X high-3 X total service =
2.00% X high-3 X total service =
                        Add together for total annual benefit

The FERS formula for employees under age 62 is as follows:
1% X high-3 X total service = Annual FERS benefit

The FERS formula for employees age 62+ with 20+ years of service is:
1.1% X high-3 X total service = Annual FERS benefit

If a FERS employee is age 62 and over with less than 20 years of service, the formula is:
1% X high-3 X total service = Annual FERS benefit

The FERS formula for employees who retire under the MRA+10 retirement will include a permanent reduction in the retirement benefit. The 1% formula will be used to calculate the earned benefit amount before OPM reduces the retirement by 5% a year for each year the employee’s age is under 62.

MRA + 10 Retirement Calculation: Employee age 57 + 18 years svc

Step 1	1% x $80,000 X 18 years= $14,400
Step 2(5% a year X 5 yrs= 25%)	$14,400 X 25% = $3,600 reduction
Total Benefit after reduction	$10,800 yearly benefit

Employees may avoid the reduction by postponing the retirement benefit until they are older and their age and service yields the full retirement benefit.

FERS Annuity Supplement
FERS employees eligible for a full, unreduced retirement may possibly qualify for an additional benefit called the FERS Annuity Supplement. This benefit, payable by OPM, is included when a FERS employee retires under age 62 with a Regular or Early retirement option. The “supplement,” based on the amount of the actual Social Security benefit payable at age 62, will be less than the Social Security benefit due at age 62. However, it supplements the FERS benefit until the retiree reaches age 62 when it will end automatically.

Stay Informed:
If you are Law Enforcement, a Firefighter, or an Air Traffic Controller, the retirement eligibility rules and formulas are different and will be covered in the next article.

As of the closing date of the Designed Resignation offer, 75,000 out of 2.3 million
Federal employees accepted the offer. Once accepted, it appears this decision will
not be rescinded. For those who remain Federal employees, what now?
Employees who did not accept the deferred resignation offer should know what
Federal benefits are in place should they lose their jobs. This article is to clarify the
retirement qualifications and separation rights for those who are Retirement
Eligible, Mid-Career and New Employees.

Retirement Eligible Employees:
Regular retirement benefits are available if you have enough age and service to
qualify. The deferred resignation offer did not remove that. To know if you are
eligible for a regular retirement, here are the requirements:

1. You must have the minimum retirement age. For CSRS, it is age 55. For
   FERS, it varies between ages 55-57 depending on birth year and is called
   your Minimum Retirement Age (MRA). Those born in 1970 and after will
   reach minimum retirement age at 57. Those born prior to 1970 will need to
   consult the chart below for their minimum retirement age:

2. You must also have the required amount of Federal service to be eligible.

Those who have reached MRA need at least 30 years of qualifying service,
but those who are age 60 and older need only 20 years or more qualifying
service. Any federal employee who has reached age 62 or older is eligible to
retire with 5 years of civilian Federal service or more.

IMPORTANT:  MRA + 10 Retirements

Employees who reach minimum retirement age with less than 30 years of required Federal service may also be retirement eligible if they have at least 10 years of qualifying service or more.  This is called the MRA+10 Retirement, for FERS employees only, and is available if:

1. The employee has reached MRA or older
2. Has 10 years or more qualifying Federal service, 5 of which must be civilian service.
3. Employee accepts a permanently reduced amount. Employees should request a retirement estimate from their Human Resources (HR) Department before choosing this option. It is also recommended the employee request information on how to postpone the MRA+10 retirement payments if they choose to avoid the reduced amount.

Additionally, retirement eligible employees may continue Federal Employee Health Benefits (FEHB), as long as health insurance enrollment was continuous over the last five years before retirement. Eligible family members remain covered.

Mid-Career Employees:

These employees are generally not eligible for regular retirement at this time. They may have worked for the Federal government at least 10 years or longer, but do not have the minimum retirement age. If so, it is possible they may qualify for one of the early retirement options: a VERA or DSR.

VERA

The VERA (Voluntary Early Retirement Authority) is an offer from Human Resources to do an early retirement if specific requirements are met.  For a VERA:

1. An employee must have at least 25 years or more Federal service, and may retire at ANY age, or
2. An employee must have at least 20 years or more qualifying Federal service, and must be at least age 50 or older.
3. An employee is choosing to voluntarily separate.
4. There is no penalty or reduction to this monthly retirement benefit for FERS employees, though there is for CSRS employees under age 55.
5. The Federal health insurance will continue as long as the employee has been continuously enrolled the last 5 years immediately before retirement. 

DSR

A second early retirement option for mid-career employees may be the Discontinued Service Retirement (DSR). The Human Resources Department will send a notice of mandatory separation to those employees who will be terminated with an effective date of separation. The same age and service requirements for the VERA will apply. Though this is an involuntary separation, an employee meeting age and service requirements may apply for this early retirement benefit.

Deferred Retirement

Unfortunately, if an employee is separated from Federal employment, and does not qualify for any of the above retirements, there is still one last option called a Deferred Retirement. With this option, if on the day of separation the employee does not have enough age and/or service to qualify for any other immediate retirement, a future retirement benefit may be payable as long as the employee:

1. Leaves all retirement contributions with OPM
2. Has at least 5 years or more qualifying Federal service
3. Applies for the benefit using the Application for Postponed and Deferred Retirements (RI 92-19) at the required retirement age, and
4. Sends all information to the OPM address on the form.

With a Deferred Retirement, an employee will not be able to keep the Federal health insurance.

New Federal Employees

Employees who have been working for the Federal government less than 10 years and who are under age 62 will have limited options if terminated. Please see  below:

1. A new employee can leave their retirement contributions in the FERS retirement fund and later at age 62, apply for and collect a FERS retirement benefit for life, or
2. The employee may request a refund of retirement contributions and move on without future entitlement to a Federal government retirement benefit.
3. The Federal health insurance will terminate.
4. A severance package may be available if the employee qualifies.
5. If a new employee has less than 5 years Federal government service, there are no future retirement benefits available. A refund of retirement contributions is payable upon request. 

Severance Packages

If a terminated employee does not qualify for any of the retirement options, it may be possible to receive a severance package. HR will determine eligibility and compute benefits payable. This package provides a calculated payment amount based on a number of factors that will include salary and length of service, however, Federal health insurance will not continue. Temporary Continuation of Coverage may be requested. Human Resources will provide further information on eligibility, but the basic qualifications for severance pay are below.

To be eligible for severance pay, you must:

1. Be serving under a qualifying appointment
2. Working a regularly scheduled tour of duty
3. Have completed at least 12 months of continuous service
4. Be removed from Federal service by involuntary separation for reasons other than inefficiency (for example, unacceptable performance or conduct)