FERS retirees may decide to return to work for Uncle Sam for any number of reasons. The big question is obvious: how will it affect your monthly annuity (pension)?
When You’ve Retired Voluntarily
If you’ve taken a voluntary retirement and then return to federal employment, you’ll continue to receive your annuity but the salary of your new job will be reduced by the amount of your annuity for the time you work. If you work part time your pay will be adjusted for time you work.
When Your Retirement Was Involuntary
An involuntary retirement is usually due to a Reduction in Force (RIF), the elimination of your position, transfer of function, or reorganization. In this scenario, when you return to work for Uncle Sam, your annuity would stop completely and you’d receive the full salary of your new job. When you retire again, you’ll be entitled to a supplemental annuity in addition to your original annuity if you worked full-time for at least a year. If you worked for at least five years, you’d be entitled to a re-determined annuity that replaces the original annuity you’re currently receiving. To be eligible for those additional benefits, FERS contributions will be deducted from your pay. Of course, to retire again, you must meet the FERS age and service requirements.
“If you’re a retiree considering going back to work for Uncle Sam, it pays to find out if one of these exceptions applies to you.”
Is It Possible To Collect Both Your Original Annuity Plus Your Full Salary?
Typically, to receive both your annuity and full pay, an exception must be made for positions called “exceptional needs” appointments. These include positions that proved to be difficult when recruiting or retaining a qualified employee. Other exceptions include a direct threat to life or property or a circumstance that requires emergency re-employment.
Individual agencies may waive the salary deduction under certain circumstances for a capped number of hours. Add to this, some agencies can extend a limited-time appointment for certain defined needs. If you’re a retiree considering going back to work for Uncle Sam, it pays to find out if one of these exceptions applies to you.
What About Your FEHB Coverage?
If your annuity continues after you’re re-employed by the federal government, your FEHB coverage as a retiree will continue and premiums will be deducted from your annuity. If your annuity stops because your retirement was involuntary, your FEHB coverage as a retiree also stops. However, you will be eligible to enroll in FEHB once you’re re-employed.
To learn more about federal re-employment, connect with an FRC® trained advisor.
Source: https://www.opm.gov/retirement-center/publications-forms/pamphlets/ri90-18.pdf
