Re-Employment Rules For Postal, Federal Retirees

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(This appeared in the July/August 2002 issue of The American Postal Worker magazine)

John R. Smith, Director

Under civil service retirement laws covering CSRS and FERS employees, retirees are not barred from postal or federal re-employment in appointed or elected positions for which they are qualified. People who retired under other retirement laws, however, may be re-employed only as provided by the particular law under which they retired. Before accepting an appointment or seeking employment in any government agency, CSRS and FERS retirees should advise the employing agency about their prior government service. The agency can then verify their retiree status.

Annuitants re-employed in federal government service must make a service credit deposit for the portions of re-employment service they performed on or after Oct. 1, 1982, in order to have such service considered in the computation of a supplemental annuity. Re-employed annuitants can choose to have deductions for retirement withheld.

Disability Annuitants

Disability annuitants may be re-employed in any position for which they are qualified. However, the employing agency must notify OPM (Office of Personnel Management) of this re-employment. When a disability annuitant that OPM has declared recovered from their disability or restored to earning capacity is re-employed while they are still entitled to disability annuity, OPM will discontinue the annuity effective on the date of re-employment. If the disability annuitant has not been found recovered from disability or restored to earning capacity, the employing agency will offset the pay of the disability annuitant by the amount of annuity assignable to the period of re-employment.

OPM may review the notification of re-employment and require the annuitant to submit information about his or her current medical condition. When a re-employed disability annuitant is found recovered from disability, or restored to earning capacity, OPM will discontinue the annuity from the date of its administrative finding, notify the agency of its determination and instruct the agency to cease reducing pay by the amount of the annuity allowable to the period of re-employment. If the appointment is subject to retirement deductions, OPM shall instruct the agency to begin such retirement deductions.

Re-employment's Effects

Re-employment by the federal government of the annuitant has several effects. They are:

  • If the annuitant's retirement was based on an involuntary separation which was not due to any fault or misbehavior, and if the re-employment is subject to the retirement law, the annuity will be discontinued form the date of re-employment. Future retirement rights will then be determined under the law in effect when the person separated from the re-employment. If the re-employment is not subject to the retirement law, annuity payments will continue without interruption, but the salary during re-employment will be reduced by the annuity received. 
  • If retirement was based on an involuntary separation or an involuntary separation for cause, or if the person is a disability annuitant who has not been found recovered or restored to earning capacity, then the annuity will continue without interruption during re-employment but the person's salary will be reduced by the amount of annuity received. If the re-employment continued for at least one year of service, the annuitant may, after separation from the re-employment, be entitled to a supplemental annuity based on the re-employment service. After completing at least five years of service, the annuitant may elect to make a deposit and have the entire annuity recomputed under the law in effect at the time of separation.
  • If the person retired for disability and later was found to be recovered or restored to earning capacity, the annuity will stop if the annuitant is re-employed during the temporary one-year extension of annuity payments. Upon recovery before reaching age 60, the annuity is continued temporarily (not to exceed one year) in order to give the individual an opportunity to find a position. If re-employment in the government service occurs within one year, the annuity stops upon re-employment. If the individual is not re-employed, the annuity stops at the expiration of the one-year period. If the re-employment is subject to the retirement law, the annuity will be discontinued from the date of re-employment. Future retirement rights will be determined under the law in effect when the employee is separated from the re-employment. If the re-employment is not subject to the retirement law, annuity payments will be suspended. When the re-employment ends, the annuity will be resumed, but only for any remainder of the original one-year temporary extension of payments.

Retiree Retroactive Payment

As we go to press, the accounting service center is processing back pay for retirees who are eligible for it under the arbitration award for the 2000 National Agreement. Arbitrator Stephen B. Goldberg awarded postal workers back pay for the period from Nov. 18, 2000, through March 22, 2002. Retroactive payment will be made for the period retired employees worked in APWU crafts during that time. Once this process is complete, the accounting service center will forward any and all adjustments to the Office of Personnel Management (OPM) for retirement pay adjustments.

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