News from the Whitehouse: On July 6, 2012, President Obama signed the Moving Ahead for Progress in the 21st Century Act, Pub.L. 112-141. While most of the statute dealt with an assortment of issues such as highway funding, student loans and flood insurance, Section 100121 of the statute made a notable modification to the FERS retirement system for federal employees. Section 100121 created the category of “phased retirement”, under which a retirement-eligible employee can make a one-time election to work part-time and begin collecting part of their federal pension at the same time. The default under Pub.L. 112-141 is working half-time while receiving 50% of the pension, although Section 100121 permits the Director of OPM to expand the possible percentages by regulation. Phased retirement participants outside of the Postal Service are required to spend 20% of their work time in mentorship activities, and continue to accrue pro rata retirement service credit for the time that they still work. Participants then may elect to fully retire at any time, at which point their pension is recomputed to reflect their additional phased retirement work. The statute also contemplates the Director of OPM setting procedures for phased retirement participants to return to full-time work.
If you are a current federal employee who is covered by FERS and would like to discuss your rights under this new law, please contact the law firm of Passman & Kaplan, P.C. to request a consultation.