OPM.gov / Retirement / Phased Retirement

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### Resources For

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# Phased Retirement

# Overview

Phased Retirement is a human resources tool that allows full-time employees to work part-time schedules while beginning to draw retirement benefits.  This new tool will allow managers to better provide unique mentoring opportunities for employees while increasing access to the decades of institutional knowledge and experience that retirees can provide.

This is yet another forward thinking policy that allows the Administration to continue its efforts to deliver a Government that is effective, efficient, and supportive of economic growth.

The final regulations are available on the Federal Register website and will take effect 90 days from August 8, 2014.  This means that agencies can send their Phased Retirement applications to OPM for processing as early as November 6, 2014.

Guidance and other material about Phased Retirement will be posted here as it becomes available.

## Related Information

                      - Final Regulations
                      - News Release
                      - Director's Blog
                      - Employment as Phased Retiree (Guidance)
                      - TSP agency bulletin
                      - TSP notice for employees
                      - Guide to Personnel Data File Edits
                      - IRS Publication 721
                      - IRS Notice 2016-39

# Webcasts

Benefits Officers Training and Development (BOTD) has prepared the following webcasts related to phased retirement:

# Forms

## Pamphlets

The following pamphlets give information and instructions about applying for phased retirement:

## Standard Forms

The following Standard Forms give instructions and provide the forms necessary to apply for phased retirement:

# Tax Information

## Phased Retirement Tax-Free Portion

A portion of your monthly annuity is taxable and a portion is tax-free. The tax-free percentage of your monthly annuity is derived by dividing your Retirement Contributions by the initial amount of your full gross monthly life rate annuity multiplied by the CSRS or FERS present value factor for your age as of the effective date of phased retirement. The initial amount of your full gross monthly life rate annuity is the amount payable before the phased percentage is applied.

### Total Lump Sum Credit

#### Full gross life monthly annuity x (CSRS or FERS) Present Value Factor = tax-free percentage

The tax-free percentage is then applied to your Gross Monthly Phased Annuity to find the monthly tax-free portion.

#### Gross Monthly Phased Annuity x tax-free % = Monthly Tax-free Amount

Your Retirement Contributions can be found in Part I on your Annuity Statement. The amount of your initial full gross monthly life rate annuity can be found in Part V on your Annuity Statement. The amount of your monthly phased annuity can be found in Part III on your Annuity Statement.

Present Value Factor charts can be found on the Present Value Factor Tab on this site.

## Final Retirement Status “Composite Annuity” Tax-Free Portion

Computing the tax-free portion on your composite retirement annuity involves the Simplified Formula adjusted for the total tax-free amount allowed for the phased retirement. The components for the Simplified Method consist of:
                - your total Retirement Contributions (including payments on any deposits and/or redeposits) for the entire service period adjusted for the total tax-free amount you received during phased retirement; (adjusted means that the total Retirement Contributions are decreased by the amount of the total tax-free amount you received during phased retirement);
                - the correct tax table from Publication 721 showing an age factor for you as an annuitant with or without a survivor benefit;
                - your new gross monthly composite annuity rate.

To compute the tax-free portion for your composite annuity, divide the adjusted Retirement Contributions by the age factor from the appropriate tax chart for the Simplified Method in *IRS Publication 721*. The result is the tax-free amount on your monthly composite annuity.

## Note:

The amount of your adjusted Retirement Contributions can be found in the “Contributions and Tax Information” section of your Retirement Booklet.

## More Tax Information

For more tax information, please visit the IRS site.

You may also contact us at our toll free number: 1-888-767-6738.

# Present Value Factors

On February 27, 2017, the Internal Revenue Service published updates to Publication 721, “Tax Guide to U.S. Civil Service Retirement Benefits,” specifically referencing IRS Notice 2016-39, addressing the tax treatment of phased retirements. The present value factors referenced in Notice 2016-39 that are to be used for CSRS and FERS phased retirees will be updated and archived on this page.

(Please consult your tax advisor or contact IRS with any tax-related questions.)

## CSRS Present Value Factor Chart

Use this Chart if you are:
                - a phased employee/retiree and
                - retired under the Civil Service Retirement System (CSRS)

First, locate the column showing the factors in effect as of your phased retirement annuity commencing date.  For example, if your phased retirement began on May 17, 2015, then you would use the factors under the Oct. 1, 2014 column.

Then locate your age as of your phased retirement annuity commencing date.

The factor next to your age is your “present value factor” or PVF.

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## FERS Present Value Factor Chart

Use this Chart if:
                - If you are a phased employee/retiree and
                - retired under the Federal Employees Retirement System (FERS)

First, locate the column showing the factors in effect as of your phased retirement annuity commencing date. For example, if your phased retirement began on February 7, 2016, then you would use the factors under the Oct. 1, 2015 column.

Then locate your age as of your phased retirement annuity commencing date.

The factor next to your age is your “present value factor” or PVF.

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## On this page

                      - CSRS Present Value Factor Chart
                      - FERS Present Value Factor Chart

## Related Information

                      - IRS Publication 721
                      - IRS Notice 2016-39

# Contact Us

Employees should contact their agency human resources office for further information about implementation of phased retirement within their agency. Agency field offices should contact their appropriate headquarters-level agency human resources office. Agency headquarters-level human resources offices may contact the following OPM offices. Requests from individual employees will be returned or forwarded to the appropriate agency human resources office. For general information on phased retirement, please visit the website.

## Retirement Services, Benefits Officers Liaison and Development

                - Email
                - benefits@opm.gov
                - Phone
                - 202-606-0788
                - Mailing Address
                - U.S. Office of Personnel Management   Benefits Officers Liaison and Development, Retirement Services   1900 E Street, NW Room SB 427   Washington, DC 20415

## Pay and Leave

                - Email
                - pay-leave-policy@opm.gov
                - Phone
                - 202-606-2858
                - Mailing Address
                - U.S. Office of Personnel Management   Pay and Leave, Employee Services   1900 E Street, NW Room 7H31   Washington, DC 20415

## Internal Placement, Promotions, Reduction in Force, Details, and Outside Employment

                - Email
                - employ@opm.gov
                - Phone
                - 202-606-0960
                - Mailing Address
                - U.S. Office of Personnel Management   Employee Services   Recruitment and Hiring, Hiring Policy   1900 E Street, NW Room 6500   Washington, DC 20415

## Mentoring

                - Email
                - gwmentoring@opm.gov
                - Phone
                - 202-606-0913
                - Mailing Address
                - U.S. Office of Personnel Management   1900 E Street, NW Suite 7439   Washington, DC 20415

## Partnership and Labor Relations, Employee Relations

                - Email
                - plr@opm.gov
                - Phone
                - 202-606-2930
                - Mailing Address
                - U.S. Office of Personnel Management   Partnership and Labor Relations, Employee Services   1900 E Street, NW Suite 7H28   Washington, DC 20415

## Planning and Policy Analysis, Federal Employee Insurance Operations

                - Email
                - Ronald.Brown@opm.gov
                - Phone
                - 202-606-0004
                - Mailing Address
                - U.S. Office of Personnel Management    Planning and Policy Analysis (FEIO)   1900 E Street, NW Room 4312   Washington, DC 20415

## Office of the Chief Financial Officer (OCFO), Financial Services

                - Email
                - FinancialBALs@opm.gov
                - Phone
                - 202-606-0606
                - Mailing Address
                - U.S. Office of Personnel Management   Chief Financial Officer, Financial Services   1900 E Street, NW Room 5478   Washington, DC 20415

## Office of the Chief Information Officer (OCIO), Records Management

                - Email
                - Larry.Wells@opm.gov
                - Phone
                - 202-606-1162
                - Mailing Address
                - U.S. Office of Personnel Management   Chief Information Officer, Records Management   1900 E Street, NW Room 2336   Washington, DC  20415