Phased Retirement – Has Its Time Come?

The Office of Personnel Management (OPM) has proposed a “Phased Retirement” program. Although implementation has not been announced, it may be valuable to our readers to get a jump start on what Phased Retirement is all about.

The Office of Personnel Management realizes the importance of preserving and protecting institutional knowledge. As federal employees leave the federal service, it is apparent that their physical-selves are not the only aspect of their presence that is leaving the service. The knowledge and know-how acquired over a life-time of federal service is also leaving, an invaluable and irreplaceable resource, and a resource that can only be preserved and protected by the passing on of knowledge.

Knowledge unshared is truly knowledge lost. As such OPM is exploring a way to harness some of that knowledge by introducing a mechanism by which potential retirees can stay a little longer, until that knowledge and expertise can be ingested and digested by the next generation of federal workers.

In essence that is the core concept of Phased Retirement. The idea of Phased Retirement is a very clear signal as to the trajectory of the federal workforce. It also is a clear indication that the leadership of the largest workforce in the world has seen the flaw of reactionary management. Every successful workforce, no matter its size, is better served by recognizing the value of knowledge and working proactively to preserve and protect a resource of unparalleled importance to the growth and prosperity of a nation.

P. S. Always Remember to Share What You Know.

– Dianna Tafazoli


Phased Retirement – The Process

Phased Retirement – Participation

Phased Retirement – Survivor Benefits

Phased Retirement vs. Mandatory Retirement Classification

Phased Retirement – Other Provisions

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Mark Hammer

hear, hear!

If I can add to the many sensible arguments for phased retirement, it is no secret that government hiring can take a long time. Long enough that even with a little advance warning of an impending retirement, it may not be possible to arrange for overlap between an incoming and a retiring employee, making knowledge transfer all the more difficult, if not impossible.

It can also be the case that so much of what incumbents know is tacit knowledge, of the sort they would never really think to tell others about – after all, sometimes you don’t necessarily know how much you know. Overlap in tenure allows for that tacit knowledge to become unearthed and made explicit as tasks call for it. And phased retirement helps with that.

From an employee perspective, retirement is a big adjustment. More modest for some, and huge for others. As a life change to be adjusted to, most of the stress and coping literature would put it up there with the loss of a spouse. Giving employees the opportunity to ease into it, and acquire new roles, is one of the kindest things you can do for them. Moreover, co-ordinating the retirements of both members of a couple can be a tricky dance that takes some time to learn the steps to. Letting a couple start off in the shallow end of the pool is a smart and helpful move. And it needn’t be a full commitment; if the person finds they are not really ready yet, they should have the option to come back.

Peter Sperry

How does phased retirement work for the next 2-3 rungs on the career ladder? Will GS-12s to 14s have to wait even longer for those above them to move on? Will agencies promote aspiring leaders to GS 15 and SES levels while the incumbents are in phased retirement status?

David B. Grinberg

Thank you for sharing such valuable and timely information. I think most public sector employees desperately need MORE information about the vast landscape of public sector retirement and the many options available to them.

Earl Rice

Phased retirement was the brain child of the Former Director of OPM. Wouldn’t surprise me if it was a “gee whiz” brain child of an intern or fellow passing through on a 90 or 120 day stint at OPM to do their “governmental service”. It has never got past the power point stage. The whole idea was the employee on phased retirement would be akin to an old Sage that would come down from the Mount for 3 or 4 days a period to pontificate on how to do the “hard things”. And it was not intended to be a permanent arrangement.

We already have the tools to accomplish what phased retirement would do. If, and this is a big if, the rules of law were enforced for re-employed annuitants, you can do everything with phased retirement would do. The rules of law for re-employed annuitants are they shall not be appointed for more than a year, the second they are re-appointed you must start the job search for a replacement, and after the replacement is found and after a small overlap (ergo 1 or 2 months, not years), the re-employed annuitant is to be immediately (remember immediate in OPM terms is a moth or two) released from service. If you start poking around, it would surprise you how many GS 14 and 15 re-employed annuitants there are floating around the headquarters of the different agencies. And, quite a few are retired SESers, which I have no problem with, except they never start the 2d phase of looking for a replacement, and what was supposed to be a NTE 1 year appointment drags on for 4 or 5 or more years. And, as far as dual compensation, even the weakest of justification will be granted duel compensation exception by OPM (draw full retirement and full paycheck). If you don’t get this, then your retirement is offset by whatever your salary is.

Phased retirement will never get implemented because we just don’t need it (and it is not a priority from the White House nor of the current OPM Director, so politically it is a non-starter right now). And, there is the argument that if you are authorized a full FTEE, then you need a full person, not a ½ person or 1/3 person. And if you hire behind the retiree, and then have a replacement come in, for an extended period, you have just busted your FTEE ceiling (and have 1.5 FTEE doing the work that 1 FTEE should be, which if the public, or even the fiscal conscience members in Congress got hold of it, they would go ballistic). Now let’s say you don’t backfill the person when they go into phased retirement and they are working half time and getting the work done. Then the structure/strength management people are going to say you don’t need a full FTEE, you only need a half FTEE, and we are going to cut your strength .5 FTEE and give it to someone else.

Mark Hammer

Well, a rather harsh assessment, but I suspect you’re correct in a number of assertions, especially those having to do with the fiscal realities..

It is hard to imagine funding for 1.5 FTEs to assure overlap and knowledge transfer within the current lean-n-mean landscape.

Many “retirees” (annuitants, to use your term) form part of the contingent workforce, often coming in as employees of consulting or office-temp firms, such that they don’t show up on the books as having been re-employed within the cooling off period. That problem is not unique to the U.S. federal context, as you can see in this report here:

On the other hand, I would suggest that a portion of that scenario is likely attributable to the fact that phased retirement is often not available as an option. Many employees actually wouldn’t mind working a 3-day week for a while longer, but if the two choices are between a 5-day week and leaving, then they leave. I would be curious to see an economist’s take on this. Would the savings be greater in the long run, or would there perhaps be no difference in cost, by retaining older employees on longer at half time, instead of re-hiring them back, post-retirement, as part-time consultants, often at inflated expense (the agency/consulting firm takes their cut)? I have no basis for predicting any particular answer to that question, but it is one worth asking.

But in general, I think you are correct in identifying the real budgeting barriers to implementing what remains, on paper, a sensible strategy…if only money had nothing to do with it.