EMPLOYEE FACT SHEET

VOLUNTARY EARLY RETIREMENT

**DEFINITION --** Voluntary Early Retirement assists an agency in
completing a major personnel or workload change with minimal disruption
to the work force. Voluntary early retirement authority must be
requested by the agency and approved by the Office of Personnel
Management (OPM). OPM makes the determination as to whether the agency
is undergoing a major RIF, reorganization or transfer of function after
reviewing a written request from the agency head or designee. Further,
OPM will designate the specific geographic area(s) or occupation(s)
covered by the retirement option. They also stipulate a period of time
during which the option will remain available. Voluntary Early
Retirement offers apply to employees covered under both the Civil
Service Retirement System (CSRS) and the Federal Employees Retirement
System (FERS).

**ELIGIBILITY** -- An employee is eligible to apply for voluntary early
retirement with an immediate annuity provided he/she has met ALL of the
following conditions:

1.  Minimum age and service requirements

-   At least age 50 with at least 20 years creditable Federal service;
    OR

-   Any age with at least 25 years creditable Federal service.

2.  Minimum of five years civilian service.

3.  Separation from a position subject to CSRS or FERS coverage.

4.  If subject to CSRS, must be covered under CSRS for at least one out
    the two years prior to retirement. Does not apply to FERS employees.

5.  Has served in a position covered by the OPM authorization for the
    minimum time specified by OPM (usually 30 days).

6.  Separates by the close of the early-out period.

**EFFECT OF EARLY RETIRMENT ON BENEFITS** --

-   Federal Employees Health Benefits coverage can be continued through
    the retirement system provided the employee has been covered under
    FEHB for at least five years prior to retirement. Coverage as an
    annuitant is identical to coverage as an employee, but premiums are
    not paid on a pre-tax basis.

-   Federal Employees Group Life Insurance can be continued through the
    retirement system provided the employee has carried the coverage for
    at least five years prior to retirement. Value and cost depend on
    elections made at retirement.

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-   **CSRS Annuity**

    -   Commencing date of annuity -- If the employee retires on the
        1^st^, 2^nd^, or 3^rd^ day of a month, annuity begins the
        following day. Otherwise, annuity begins the first day of the
        month following retirement.

    -   Calculation of annuity -- Annuity is calculated based on the
        average high-3 salary and years and months of creditable
        service. Unused sick leave can be used for additional service
        credit. If employee is under age 55, this calculation is reduced
        by one-sixth of one percent for each full month he/she is under
        age 55 (i.e. 2% per year).

-   **FERS Annuity**

    -   Commencing date of annuity -- Annuity begins the first day of
        the month following retirement.

    -   Calculation of annuity --

FERS Basic Annuity is calculated based on the average high-3 salary and
years and months of creditable service. Sick leave is not creditable
under FERS. There is no annuity reduction in FERS for employees who
retire on an early voluntary retirement under age 55.

EXECPTION: A FERS Transferee with a CSRS Component in his/her annuity,
who retires before age 55, will have the CSRS portion of the payable
annuity reduced by one-sixth of one percent for each full month he/she
is under age 55. No reduction will be applied to the FERS component of
the annuity.

> FERS Annuity Supplement is payable to an employee who has completed at
> least one calendar year of FERS service, when he/she reaches his/her
> minimum retirement age (MRA). MRA is age 55 to 57, depending on date
> of birth. The annuity supplement is payable until eligibility for
> Social Security begins at age 62. But the annuity supplement is
> earnings tested, similar to a social security benefit. The supplement
> will be reduced \$1.00 for every \$2.00 earned above the earnings
> limitation. For 2003, the earnings limitation is \$960 per month.

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# EMPLOYMENT AFTER VOLUNTARY EARLY OUT

-   Non-Federal employment -- There are no restrictions on non-Federal
    employment after a voluntary early retirement. EXCEPTION: Employees
    covered under FERS who qualify for the annuity supplement could have
    the supplement reduced or discontinued due to the earning test.

-   Federal employment -- If an annuitant is hired under a Federal
    appointment that provides for coverage under CSRS or FERS (generally
    non-temporary employment), then the annuitant is considered a
    "reemployed annuitant". This means the annuity will continue, and
    the Federal salary will be offset by the annuity. If the reemployed
    annuitant works at least one-year full time equivalent, then the
    annuitant may apply for a supplemental annuity. If the annuitant
    works at least five-years full time equivalent, then the annuitant
    may choose either the supplemental annuity or a re-determined
    annuity.