United States

Office of 

Personnel Management 

The Federal Government’s Human Resources Agency

Benefits Administration Letter

Number: 19 - 102 Date: 05/20/2019

Subject: Additional Guidance on Phased Retirement

The Office of Personnel Management (OPM) published final regulations in August of 2014 to 

implement phased retirement. The purpose of this Benefits Administration Letter (BAL) is to 

identify and address significant errors encountered by OPM with phased retirement and to 

provide guidance to ensure the compliance and elimination of these errors. The most common 

errors for phased retirement are inaccurate effective dates, incomplete or missing documentation, 

incorrect retirement estimates, and the timely counsel and action on the completion of the 

civilian and/or military deposits prior to the finalization of the phased retirement annuity. 

The Agency Checklist for Phased Retirement – CSRS and Agency Checklist for Phased 

Retirement – FERS are now available and should be completed and included with the 

documentation to elect phased employment/retirement status. Several instructional BAL’s on 

phased retirement have previously been issued which include the following: 

• BAL - 14-108 – Phased Retirement Employee Frequently Asked Questions

• BAL – 14-109 – Phased Retirement Instructions for Personnel and Payroll Offices

• BAL – 14-110 – Instructions for Personnel and Payroll Offices

• BAL – 14-111 – New CSRS and FERS Instruction Pamphlets Available for Completing

Applications for Phased Retirement and Full Retirement Status from Phased Employment

• BAL – 14-112 – Standard Form (SF) 3116: Phased Employment/Phased Retirement

Status Elections

The phased retirement statutory provisions can be found at 5 U.S.C. 8336a and 5 U.S.C. 8412a 

and the regulations can be found at 5 CFR part 831, subpart Q, and 5 CFR part 848. 

Kenneth J. Zawodny, Jr. 

Associate Director

Retirement Services
WORKING PERCENTAGE AND OFFICIAL ESTABLISHED 

HOURS FOR PHASED EMPLOYMENT

Problem: Agencies have approved employees who have applied for phased retirement 

who seemingly are not working the full 40 hours per pay period per the statutory 

requirement. A work schedule of less than 40 hours per pay period does not 

meet the 50% working percentage requirement of phased retirement, which will 

result in OPM disallowing the phased retirement. This means that the final full 

status retirement will convert to a regular retirement in which the phased 

employment service will be processed as part-time service. This also means that 

all annuity payments made during phased retirement are erroneous and the 

employee will be responsible to pay the full amount of the annuity received to 

OPM. 

Rules:

• The established working percentage for phased retirement is 50 percent

which equates to 40 hours per pay period.

• The working percentage of 50 percent is defined as half of the full time

schedule of 80 hours per pay period (5 CFR 831.1702).

• There are no exceptions that allow employees to work less than 50

percent of the full time schedule.

• By regulation, only the Director of the Office of Personnel Management

may provide for working percentages other than the currently established

working percentage. The Director has not provided for any new working

percentages pursuant to her/his authority at 5 U.S.C. 8331a (b) and 5

U.S.C. 8412a (b).

• Agencies do not have the authority to approve a working

percentage other than 50 percent.

• The working percentage for a phased retiree may not be changed during 

the phased retiree’s phased retirement period (5 U.S.C.

8412a).

• In rare and exceptional circumstances, an authorized agency

official may approve an employee in phased retirement status to

temporarily perform hours of work in excess of the officially established 

work schedule of 40 hours per pay period as long as

certain requirements are met. There is more information on

granting an exception to the established work schedule of an

employee in phased retirement status in the regulations in 5 CFR

831.1715 and 5 CFR 848.205 as well as in BAL 14-110, section 4.

Continued on next page 
Example: An employee on phased retirement has an official work schedule 

resulting in only 36 hours per pay period instead of the required 40 

hours per pay period. This working percentage is not at 50%, 

therefore this employee does not meet the requirements for phased 

retirement.

Action Required: Employees must not have a working percentage other than 50 

percent, 40 hours per pay period. Should this occur, the phased 

retirement SF-50 must be canceled. A new SF-50 should be 

processed to reflect the change in work schedule to part time, and 

the employee will be subject to the part time proration for the 

period of time they were erroneously placed in phased retirement. 

The employee is responsible for repaying any phased retirement 

annuity received to the OPM.

EFFECTIVE DATES

Problem: Incorrect effective dates have been input on the SF 3116 and SF 50 

for employees electing to enter phased employment and/or electing 

to end phased employment. 

Rules: Phased Employment and Commencing Date of Phased Retirement 

Annuity: 

• The effective date and commencing date of the phased

retirement annuity is the beginning of the next pay period

following the authorized agency official’s approval of the

phased retirement election or the first day of a later pay

period if approved by the authorized official.

Effective Date of Full Status Retirement Benefit:

• An employee in phased retirement status may enter full

retirement status at any time by submitting an application

for retirement to their Human Resources office.

End Phased Employment/Phased Retirement Status and Return to 

Regular Employment: 

• Should an authorized official approve the employee’s

election to end phased employment/phased retirement to

return to regular employment and end phased retirement,

the effective date of this change in status is based on the

date of this approval.

Continued on next page 
Example: 

DOCUMENTATION

Problem:

If approved by the agency between the first and fifteenth of the 

month, the effective date of the termination of phased retirement 

would be the day before the first day of the first full pay period in the 

next month. For example, if a return to regular employment was 

approved by the agency on January 9, 2019, the effective date of the 

termination of phased retirement would be February 2, 2019; and the 

effective date for the return to regular employment would be 

February 3, 2019, which is the beginning of the first pay period in 

February (i.e., the month after the January 9th agency approval). 

Should the authorized official approve the employee’s request to end 

phased employment/retirement to return to regular employment 

between the sixteenth of the month to the end of the month, the 

effective date of termination of the phased retirement would be the 

day before the first day of the first full pay period beginning in the 

second month after the month of the agency approval. For example, 

if the agency approved a return to regular employment on January 16, 

2019, the effective date of the termination of phased employment 

would be March 2, 2019; and the effective date for the return to 

regular employment would be March 3, 2019, which is the beginning 

of the first pay period in March. 

NOTE: The Phased Employment/Phased Retirement Status Election 

form (Standard Form 3116) provides detailed guidance on how to 

determine the correct effective dates for phased retirement.

Phased retirement packages are being received without all required 

documentation, which causes a delay in processing times to obtain 

the needed information. There are different documentation needs for 

each component of phased retirement/phased employment. In 

addition, some payroll providers are not including the required 

employee deductions through the day before the employee enters 

phased employment/phased retirement. 

Rules: The following documents and/or action are required for the 

election, application, or termination of phased employment: 

To Elect Phased Employment/Retirement Status 

• Agency Checklist for Phased Retirement (SF 2801 PR – CSRS,

SF 3107 PR FERS)

• Certified Summary of Federal Service (CSRS – SF 2801-1,

FERS – SF 3107-1)

Continued on next page 
• Phased Employment/Phased Retirement Status Elections, 

SF 3116, Part 1A

o File a copy of the election in the Official Personnel

Folder (OPF or eOPF)

• Application for Immediate Retirement – SF 2801 for CSRS, 

SF 3107 for FERS (Adhere to the Information & Instructions 

for Completing an Application for Phased Retirement 

pamphlet, SF 2825 for CSRS, SF-3117 for FERS)

• Complete deposits for post-1956 military service and/or civilian 

deposits/redeposits (if applicable) before the effective date of 

Phased Employment/Phased Retirement

• SF-50, Notification of Personnel Action (Nature of Action

Code (NOAC) 615 – Entering Phased Retirement, Chapter 27 –

Guide to Processing Personnel Actions)

• Phased Retirement Estimate of Annuity

• Individual Retirement Record (IRR) – the IRR must contain a

complete service history and fiscal record data up through the

day before entry into phased employment/phased retirement.

The fiscal data must include all deductions withheld

through the day before phased retirement and any

accompanying fiscal data such as Leave Without Pay or

Additional Pay Status indications. The amount of deductions

are used for various benefits as well as for Internal Revenue

Service tax compliance purposes. Agency and payroll provider

provision of this information is a mandatory requirement to be

met in order for OPM to process the phased retirement.

To Elect to End Phased Employment/Retirement to Return to 

Regular Employment Status 

• Phased Employment/Phased Retirement Status Elections, 

SF 3116 – Part 2A

o Send electronic copy to phasedret@opm.gov for

immediate awareness

o Send paper copy to the OPM within 15 days of the

election

o File scanned copy of the election in the OPF/eOPF

• SF-50 – NOAC 616 – Opt Out Phased Employment/Retirement

(Chapter 27 – Guide to Processing Personnel Actions)

Continued on next page 
To Elect to Continue Phased Employment/Retirement upon a Move 

to another Agency 

• Phased Employment/Phased Retirement Status Elections, 

SF 3116 - Part 3A

o File a copy of the election in the Official Personnel

Folder (OPF or eOPF)

• Written consent from the authorized agency official from the

agency where the employee is transferring

To Elect to End Phased Employment/Phased Retirement Status 

upon a Move to another Agency 

• Phased Employment/Phased Retirement Status Elections, 

SF 3116 – Part 3B

o Send electronic copy to phasedret@opm.gov for

immediate awareness

o Send hard copy to the OPM within 15 days of the

election

o File scanned copy of the election in the OPF/eOPF

To Elect to end Phased Retirement to enter Full Immediate 

Voluntary Retirement

• Retirement application should be completed in accordance to

Instruction Pamphlets SF 2826 (CSRS), SF 3118 (FERS)

• SF-50 should reflect the full retirement status – voluntary,

NOAC 307, or full retirement Status – ILIS, NOAC 308, for

full retirement status in lieu of involuntary separation (Chapter

30 – Guide to Processing Personnel Actions)

NOTE: The application package for a Full Retirement Status separation should contain all of 

the applicable documents that a regular retirement would contain. See BAL 12-103, 

Attachment C for instructions on assembling a complete retirement package.

RETIREMENT ESTIMATES AND COUNSELING 

Problem: OPM is receiving copies of inaccurate retirement estimates which 

employing agencies have been provided to the employees electing 

phased employment and/or ending phased employment. 

Employees are receiving estimates for an immediate retirement 

instead of a phased retirement estimate. This causes confusion for 

the employees and does not provide the sound information the 

Continued on next page
Rules:

employees need for informed consent and financial planning 

purposes. 

It is imperative that phased retirement estimates and counseling are 

completed accurately and timely for employees transitioning to 

phased retirement status, opting out of phased employment/phased 

retirement, and upon their election to apply for full retirement 

(composite). When the agency estimates the employee’s 

retirement annuity, it is important to ensure that the employee’s 

work schedule and status are correctly changed to phased 

retirement with the effective date of this election. The certified

summary of service should also reflect this change. 

Election of Phased Employment/Retirement Status 

The estimate provided to employees should be specific to the

annuity that will be paid during phased retirement. Please note that 

this estimate will not include any reductions or deductions for 

benefits. For FERS employees the phased retirement estimate will 

not include the FERS annuity supplement as this is not paid during 

phased retirement. The phased retirement estimate should not have

the converted sick leave included since this leave may continue to 

be used and earned during phased employment and the balance 

will later be converted and added to the total service used in the 

composite annuity upon employees’ transition to full retirement.

Election to End Phased Employment/Retirement to Return to 

Regular Employment Status 

Employees should be counseled to ensure that they are made aware 

of how the time in phased employment/phased retirement will 

affect their future annuity upon any election to return to regular 

employment and end their participation in phased retirement. A 

new annuity estimate may be provided to accurately reflect the

period of phased employment/phased retirement as part time 

service, thus applying a part time proration to the annuity upon a 

future immediate retirement computation.

Application for Full retirement status (composite annuity) 

Some agencies are computing the composite annuity as if it were a 

regular retirement. The estimate of annuity upon completion of the 

phased retirement status and election of full retirement status 

should reflect the result of the composite formula, in which the 

initial phased retirement annual benefit (updated with applicable 

Cost of Living Adjustments) is added to the full status retirement

benefit (i.e., the annual benefit for the entire service history, 

including unused sick leave, x 50%). The appropriate reductions 

Continued on next page
(such as for survivor benefit) and deductions are then taken from 

the resulting composite benefit. Please note that the CSRS 80% 

benefit is also subject to the composite formula and therefore, the 

80% calculation is different from the regular 80% amount.

OPPORTUNITY TO COMPLETE UNPAID DEPOSITS/REDEPOSITS 

Problem: Employees who elect phased employment who also have unpaid 

deposits and/or redeposits are unaware that they MUST pay all 

deposits/redeposits upon the processing of their phased retirement. 

They will NOT have another opportunity to make a service credit 

payment upon separation for the full final retirement status. 

Benefits Specialists should counsel and provide estimates for 

comparison of the employee’s annuity with and without the 

deposits paid and stress the importance of completing the deposits 

either prior to entering phased retirement or within the limited time 

allotted per the Deposit/Redeposit letter sent to them by OPM 

during the adjudication of the phased retirement benefit. 

Rules: It is imperative that employees who owe retirement creditable 

deposits for Federal civilian service during which no retirement 

deductions were performed or redeposits for periods of service 

during which deductions were withheld but were later refunded, be 

advised that deposit(s) must be completed prior to the finalization 

of their phased retirement annuity. Upon receipt of the phased 

retirement election, OPM will provide employees only 30 days to 

pay the deposit and/or redeposit in a lump-sum payment. 

It is important to note that if these deposits and redeposits are not 

paid, the employee in phased retirement status will not have an 

opportunity to pay them upon entering full retirement status. 

Post-1956 Military Deposits

Employees who elect phased retirement who owe a deposit for 

active duty military service performed after December 31, 1956 

must complete payment on the deposit before their phased 

retirement annuity commences. There will not be an opportunity 

to pay this deposit after the phased retirement annuity begins. 

THE USE OF THE PHASED RETIREMENT EMAIL ADDRESS

Problem: The email address specific for phased retirement is being utilized 

incorrectly causing an erroneous influx of email requests and 

Continued on next page
Rules: 

inquiries which could cause unnecessary delays due to time taken

to redirect the agency contact or employee to the appropriate 

personnel to contact. 

Employees should contact their agency human resources office for 

further information about the 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

their servicing OPM liaison. Requests from individual employees 

will be returned or forwarded to the appropriate agency human 

resources office. For general information on phased retirement, 

the following website should be used as a resource: 

http://www.opm.gov/retirement-services/phased-retirement/. 

The phased retirement email address, phasedret@opm.gov is only

to be used in the following circumstances: 

• Ending phased retirement to go back to being a regular

employee

o Agencies must email a copy of the election to

phasedret@opm.gov within 15 days of the election.

• Moving to another agency where phased employment will be

continued

o To move to another agency during phased

employment/phased retirement, the phased retiree must

complete Part 3A of SF 3116 and obtain the signed written

approval of the authorized agency official in the gaining

agency.

o This form should be submitted to the phased retiree’s losing 

agency, who must email a copy to

phasedret@opm.gov to alert OPM to the change in agency.

• Moving to another agency where phased employment will not

be continued

o To end phased employment/phased retirement status upon a

move to another agency, the phased retiree must complete

Part 3b of form SF 3116 and submit it to the agency that

initially approved the phased retirement. The agency must

immediately send the election form to the

phasedret@opm.gov email box to alert Retirement to the

Continued on next page
termination of phased employment/phased retirement. The 

phased employment/phased retirement status ends as of 

close of business on the day before the move to the new 

agency. The effective date of the termination of the phased 

annuity is the date of transfer.

• Death of phased retiree while in phased employment/phased

retirement status

o If a phased retiree receiving phased retirement annuity dies

before separating for full retirement benefits, the phased

retiree will be deemed to have been a deceased employee.

Consequently, the agency will handle the death of the

phased retiree as a death in service claim. Agencies must

submit the death in service package in the Data Exchange

Gateway (DEG) as a death application. Agencies must

immediately send a notice of the death to Retirement via

the phasedret@opm.gov email address.

• Phased retiree begins receipt of workers compensation

o If a phased retiree begins receiving workers compensation,

agencies must notify OPM via the phasedret@opm.gov

email address immediately of the type and duration (if

known) of the OWCP. Receipt of certain types of OWCP

affects the status of the phased retirement annuity.