Q. Can a FERS employee who has already left the federal position (resigned for health reasons) take a lump-sum FERS payment instead of monthly retirement payments? I was told a FERS employee could not take a lump sum unless he or she has a terminal illness. I would like to start a business with that lump sum.
A. As a rule, you can’t receive a refund of your retirement contributions if you are eligible for immediate retirement. The terminal illness exception you referred to only applies to someone who has a life expectancy of less than two years and is not taking disability retirement.