IB 
Union Calendar No. 383 
112TH CONGRESS 
2D SESSION 
H. R. 4363 
[Report No. 112–535] 
To amend title 5, United States Code, to allow Federal employees to continue 
their public service while partially retired. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 17, 2012 
Mr. ISSA (for himself, Mr. ROSS of Florida, and Mr. LYNCH) introduced the 
following bill; which was referred to the Committee on Oversight and 
Government Reform 
JUNE 15, 2012 
Reported with an amendment, committed to the Committee of the Whole 
House on the State of the Union, and ordered to be printed 
[Insert the part printed in italic] 
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A BILL 
To amend title 5, United States Code, to allow Federal 
employees to continue their public service while partially 
retired. 
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Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Federal Employee 
Phased Retirement Act’’. 
SEC. 2. PHASED RETIREMENT AUTHORITY. 
(a) CSRS.—Chapter 83 of title 5, United States 
Code, is amended— 
(1) in section 8331— 
(A) in paragraph (30) by striking ‘‘and’’ at 
the end; 
(B) in paragraph (31) by striking the pe-
riod at the end and inserting ‘‘; and’’; and 
(C) by adding at the end the following: 
‘‘(32) ‘Director’ means the Director of the Of-
fice of Personnel Management.’’; 
(2) by inserting after section 8336 the fol-
lowing: 
‘‘§ 8336a. Phased retirement 
‘‘(a) For the purposes of this section— 
‘‘(1) the term ‘composite retirement annuity’ 
means the annuity computed when a phased retiree 
attains full retirement status; 
‘‘(2) the term ‘full retirement status’ means 
that a phased retiree has ceased employment and is 
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entitled, upon application, to a composite retirement 
annuity; 
‘‘(3) the term ‘phased employment’ means the 
less-than-full-time employment of a phased retiree; 
‘‘(4) the term ‘phased retiree’ means a retire-
ment-eligible employee who— 
‘‘(A) makes an election under subsection 
(b); and 
‘‘(B) has not entered full retirement sta-
tus; 
‘‘(5) the term ‘phased retirement annuity’ 
means the annuity payable under this section before 
full retirement; 
‘‘(6) the term ‘phased retirement percentage’ 
means the percentage which, when added to the 
working percentage for a phased retiree, produces a 
sum of 100 percent; 
‘‘(7) the term ‘phased retirement period’ means 
the period beginning on the date on which an indi-
vidual becomes entitled to receive a phased retire-
ment annuity and ending on the date on which the 
individual dies or separates from phased employ-
ment; 
‘‘(8) the term ‘phased retirement status’ means 
that a phased retiree is concurrently employed in 
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phased employment and eligible to receive a phased 
retirement annuity; 
‘‘(9) the term ‘retirement-eligible employee’— 
‘‘(A) means an individual who, if the indi-
vidual separated from the service, would meet 
the requirements for retirement under sub-
section (a) or (b) of section 8336; but 
‘‘(B) does not include an employee, de-
scribed in section 8335, after the date as of 
which such employee is required to be separated 
from the service by reason of such section; and 
‘‘(10) the term ‘working percentage’ means the 
percentage of full-time employment equal the 
quotient obtained by dividing— 
‘‘(A) the number of hours per pay period 
to be worked by a phased retiree as scheduled 
in accordance with subsection (b)(2); by 
‘‘(B) the number of hours per pay period 
to be worked by an employee serving in a com-
parable position on a full-time basis. 
‘‘(b)(1) With the concurrence of the head of the em-
ploying agency, and under regulations promulgated by the 
Director, a retirement-eligible employee who has been em-
ployed on a full-time basis for not less than the 3-year 
period ending on the date on which the retirement-eligible 
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employee makes an election under this subsection may 
elect to enter phased retirement status. 
‘‘(2)(A) Subject to subparagraph (B), at the time of 
entering phased retirement status, a phased retiree shall 
be appointed to a position for which the working percent-
age is 50 percent. 
‘‘(B) The Director may, by regulation, provide for 
working percentages different from the percentage speci-
fied under subparagraph (A), which shall be not less than 
20 percent and not more than 80 percent. 
‘‘(C) The working percentage for a phased retiree 
may not be changed during the phased retiree’s phased 
retirement period. 
‘‘(D)(i) Not less than 20 percent of the hours to be 
worked by a phased retiree shall consist of mentoring. 
‘‘(ii) The Director may, by regulation, provide for ex-
ceptions to the requirement under clause (i). 
‘‘(iii) Clause (i) shall not apply to a phased retiree 
serving in the United States Postal Service. Nothing in 
this clause shall prevent the application of clause (i) or 
(ii) with respect to a phased retiree serving in the Postal 
Regulatory Commission. 
‘‘(3) A phased retiree— 
‘‘(A) may not be employed in more than one po-
sition at any time; and 
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‘‘(B) may transfer to another position in the 
same or a different agency, if the transfer does not 
result in a change in the working percentage. 
‘‘(4) A retirement-eligible employee may make only 
one election under this subsection during the retirement- 
eligible employee’s lifetime. 
‘‘(5) A retirement-eligible employee who makes an 
election under this subsection may not make an election 
under section 8343a. 
‘‘(c)(1) Except as otherwise provided under this sub-
section, the phased retirement annuity for a phased retiree 
is the product obtained by multiplying— 
‘‘(A) the amount of an annuity computed under 
section 8339 that would have been payable to the 
phased retiree if, on the date on which the phased 
retiree enters phased retirement status, the phased 
retiree had separated from service and retired under 
section 8336 (a) or (b); by 
‘‘(B) the phased retirement percentage for the 
phased retiree. 
‘‘(2) A phased retirement annuity shall be paid in ad-
dition to the basic pay for the position to which a phased 
retiree is appointed during phased employment. 
‘‘(3) A phased retirement annuity shall be adjusted 
in accordance with section 8340. 
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‘‘(4)(A) A phased retirement annuity shall not be 
subject to reduction for any form of survivor annuity, shall 
not serve as the basis of the computation of any survivor 
annuity, and shall not be subject to any court order requir-
ing a survivor annuity to be provided to any individual. 
‘‘(B) A phased retirement annuity shall be subject to 
a court order providing for division, allotment, assign-
ment, execution, levy, attachment, garnishment, or other 
legal process on the same basis as other annuities. 
‘‘(5) Any reduction of a phased retirement annuity 
based on an election under section 8334(d)(2) shall be ap-
plied to the phased retirement annuity after computation 
under paragraph (1). 
‘‘(6)(A) Any deposit, or election of an actuarial annu-
ity reduction in lieu of a deposit, for military service or 
for creditable civilian service for which retirement deduc-
tions were not made or refunded shall be made by a retire-
ment-eligible employee at or before the time the retire-
ment-eligible employee enters phased retirement status. 
No such deposit may be made, or actuarial adjustment 
in lieu thereof elected, at the time a phased retiree enters 
full retirement status. 
‘‘(B) Notwithstanding subparagraph (A), if a phased 
retiree does not make such a deposit and dies in service 
as a phased retiree, a survivor of the phased retiree shall 
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have the same right to make such deposit as would have 
been available had the employee not entered phased retire-
ment status and died in service. 
‘‘(C) If a phased retiree makes an election for an ac-
tuarial annuity reduction under section 8334(d)(2) and 
dies in service as a phased retiree, the amount of any de-
posit upon which such actuarial reduction shall have been 
based shall be deemed to have been fully paid. 
‘‘(7) A phased retirement annuity shall commence on 
the date on which a phased retiree enters phased employ-
ment. 
‘‘(8) No unused sick leave credit may be used in the 
computation of the phased retirement annuity. 
‘‘(d) All basic pay not in excess of the full-time rate 
of pay for the position to which a phased retiree is ap-
pointed shall be deemed to be basic pay for purposes of 
section 8334. 
‘‘(e) Under such procedures as the Director may pre-
scribe, a phased retiree may elect to enter full retirement 
status at any time. Upon making such an election, a 
phased retiree shall be entitled to a composite retirement 
annuity. 
‘‘(f)(1) Except as provided otherwise under this sub-
section, a composite retirement annuity is a single annuity 
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‘‘(3) A composite retirement annuity shall be ad-
justed in accordance with section 8340, except that sub-
section (c)(1) of that section shall not apply. 
‘‘(4) In computing a composite retirement annuity 
under paragraph (1)(B)(i), the unused sick leave to the 
credit of a phased retiree at the time of entry into full 
retirement status shall be adjusted by dividing the number 
of hours of unused sick leave by the working percentage. 
‘‘(g)(1) Under such procedures and conditions as the 
Director may provide, and with the concurrence of the 
head of the employing agency, a phased retiree may elect 
to terminate phased retirement status and return to a full- 
time work schedule. 
‘‘(2) Upon entering a full-time work schedule based 
upon an election under paragraph (1), the phased retire-
ment annuity of a phased retiree shall terminate. 
‘‘(3) After the termination of a phased retirement an-
nuity under this subsection, the individual’s rights under 
this subchapter shall be determined based on the law in 
effect at the time of any subsequent separation from serv-
ice. For purposes of this subchapter or chapter 84, at time 
of the subsequent separation from service, the phased re-
tirement period shall be treated as if it had been a period 
of part-time employment with the work schedule described 
in subsection (b)(2). 
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‘‘(h) For purposes of section 8341— 
‘‘(1) the death of a phased retiree shall be 
deemed to be the death in service of an employee; 
and 
‘‘(2) the phased retirement period shall be 
deemed to have been a period of part-time employ-
ment with the work schedule described in subsection 
(b)(2). 
‘‘(i) Employment of a phased retiree shall not be 
deemed to be part-time career employment, as defined in 
section 3401(2). 
‘‘(j) A phased retiree is not eligible to apply for an 
annuity under section 8337. 
‘‘(k) For purposes of section 8341(h)(4), retirement 
shall be deemed to occur on the date on which a phased 
retiree enters into full retirement status. 
‘‘(l) For purposes of sections 8343 and 8351, and 
subchapter III of chapter 84, a phased retiree shall be 
deemed to be an employee. 
‘‘(m) A phased retiree is not subject to section 8344. 
‘‘(n) For purposes of chapter 87, a phased retiree 
shall be deemed to be receiving basic pay at the rate of 
a full-time employee in the position to which the phased 
retiree is appointed.’’; and 
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(3) in the table of sections by inserting after 
the item relating to section 8336 the following: 
‘‘8336a. Phased retirement.’’. 
(b) FERS.—Chapter 84 of title 5, United States 
Code, is amended— 
(1) by inserting after section 8412 the following 
new section: 
‘‘§ 8412a. Phased retirement 
‘‘(a) For the purposes of this section— 
‘‘(1) the term ‘composite retirement annuity’ 
means the annuity computed when a phased retiree 
attains full retirement status; 
‘‘(2) the term ‘full retirement status’ means 
that a phased retiree has ceased employment and is 
entitled, upon application, to a composite retirement 
annuity; 
‘‘(3) the term ‘phased employment’ means the 
less-than-full-time employment of a phased retiree; 
‘‘(4) the term ‘phased retiree’ means a retire-
ment-eligible employee who— 
‘‘(A) makes an election under subsection 
(b); and 
‘‘(B) has not entered full retirement sta-
tus; 
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‘‘(5) the term ‘phased retirement annuity’ 
means the annuity payable under this section before 
full retirement; 
‘‘(6) the term ‘phased retirement percentage’ 
means the percentage which, when added to the 
working percentage for a phased retiree, produces a 
sum of 100 percent; 
‘‘(7) the term ‘phased retirement period’ means 
the period beginning on the date on which an indi-
vidual becomes entitled to receive a phased retire-
ment annuity and ending on the date on which the 
individual dies or separates from phased employ-
ment; 
‘‘(8) the term ‘phased retirement status’ means 
that a phased retiree is concurrently employed in 
phased employment and eligible to receive a phased 
retirement annuity; 
‘‘(9) the term ‘retirement-eligible employee’— 
‘‘(A) means an individual who, if the indi-
vidual separated from the service, would meet 
the requirements for retirement under sub-
section (a) or (b) of section 8412; and 
‘‘(B) does not include— 
‘‘(i) an individual who, if the indi-
vidual separated from the service, would 
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meet the requirements for retirement 
under subsection (d) or (e) of section 
8412; but 
‘‘(ii) does not include an employee, de-
scribed in section 8425, after the date as 
of which such employee is required to be 
separated from the service by reason of 
such section; and 
‘‘(10) the term ‘working percentage’ means the 
percentage of full-time employment equal to the 
quotient obtained by dividing— 
‘‘(A) the number of hours per pay period 
to be worked by a phased retiree as scheduled 
in accordance with subsection (b)(2); by 
‘‘(B) the number of hours per pay period 
to be worked by an employee serving in a com-
parable position on a full-time basis. 
‘‘(b)(1) With the concurrence of the head of the em-
ploying agency, and under regulations promulgated by the 
Director, a retirement-eligible employee who has been em-
ployed on a full-time basis for not less than the 3-year 
period ending on the date on which the retirement-eligible 
employee makes an election under this subsection may 
elect to enter phased retirement status. 
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‘‘(2)(A) Subject to subparagraph (B), at the time of 
entering phased retirement status, a phased retiree shall 
be appointed to a position for which the working percent-
age is 50 percent. 
‘‘(B) The Director may, by regulation, provide for 
working percentages different from the percentage speci-
fied under subparagraph (A), which shall be not less than 
20 percent and not more than 80 percent. 
‘‘(C) The working percentage for a phased retiree 
may not be changed during the phased retiree’s phased 
retirement period. 
‘‘(D)(i) Not less than 20 percent of the hours to be 
worked by a phased retiree shall consist of mentoring. 
‘‘(ii) The Director may, by regulation, provide for ex-
ceptions to the requirement under clause (i). 
‘‘(iii) Clause (i) shall not apply to a phased retiree 
serving in the United States Postal Service. Nothing in 
this clause shall prevent the application of clause (i) or 
(ii) with respect to a phased retiree serving in the Postal 
Regulatory Commission. 
‘‘(3) A phased retiree— 
‘‘(A) may not be employed in more than one po-
sition at any time; and 
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‘‘(B) may transfer to another position in the 
same or a different agency, if the transfer does not 
result in a change in the working percentage. 
‘‘(4) A retirement-eligible employee may make only 
one election under this subsection during the retirement- 
eligible employee’s lifetime. 
‘‘(5) A retirement-eligible employee who makes an 
election under this subsection may not make an election 
under section 8420a. 
‘‘(c)(1) Except as otherwise provided under this sub-
section, the phased retirement annuity for a phased retiree 
is the product obtained by multiplying— 
‘‘(A) the amount of an annuity computed under 
section 8415 that would have been payable to the 
phased retiree if, on the date on which the phased 
retiree enters phased retirement status, the phased 
retiree had separated from service and retired under 
section 8412 (a) or (b); by 
‘‘(B) the phased retirement percentage for the 
phased retiree. 
‘‘(2) A phased retirement annuity shall be paid in ad-
dition to the basic pay for the position to which a phased 
retiree is appointed during the phased employment. 
‘‘(3) A phased retirement annuity shall be adjusted 
in accordance with section 8462. 
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