As a result of all the early retirement offers and buyouts, a lot of employees leave government for what they hope will be greener pastures. Whatever their motivation, quite a few of them think about returning to work for the federal government.
If you are one of them, a potential impediment to your coming back to work is this. If you received a buyout and return to work before the end of five years, with rare exception, the law requires that you repay the entire amount no later than the date on which you report for duty.
If you didn’t receive a buyout (or are one of those individuals granted a waiver), your annuity will either continue to be paid, or it will stop. Which of these two things happens will depend on your status as a retiree. If you are a Civil Service Retirement System (CSRS) retiree, your annuity will stop if you fall into one of the following four categories. If you are a Federal Employees Retirement System retiree, only the first two apply.
- You are a disability retiree whom the Office of Personnel Management has found recovered or restored to earning capacity prior to re-employment;
- You are a disability retiree who wasn’t disabled for your National Guard technician position but was awarded a disability annuity because you were medically disqualified for continued membership in the National Guard;
- You are a retiree who was involuntarily separated from your job (unless it was required by law based on age and length of service or for cause) and your new job if permanent in nature;
- You are a retiree who received a presidential appointment subject to retirement deductions.
If your annuity stops, you’ll have the same status as any other federal employee in an equivalent position and with a similar service history. When you leave government again, your annuity will be reinstated unless you are entitled to either an immediate or deferred annuity based on the new separation.
Most retirees whose annuity stops on re-employment are involuntarily separated CSRS employees whose careers have been cut short by a RIF, reorganization or transfer of function. If you were allowed to retire early under the lowered age and service requirements, when you return to work you’ll be treated as if you are simply completing an interrupted career.
On the other hand, if you met the age and service requirements for an immediate retirement, when you return to work your annuity will continue without interruption. However, with rare exception, the salary you receive will be reduced by the amount of your annuity. If you work part time, the reduction will be proportional. One of the best reasons for returning to work after retirement is to increase your retirement benefits. As a reemployed annuitant, you can earn either a supplemental or a redetermined annuity. If you work as a re-employed annuitant on a full-time, continuous basis for at least one year, you’ll be entitled to a supplemental annuity. If you work part time, you’ll have to work longer. If you work for at least five years, you’ll be eligible to elect a redetermined annuity, which replaces the one you are currently receiving.
Potential increases in your annuity aren’t a gift. They must be paid for either with retirement contributions (mandatory for reemployed annuitants covered by FERS, optional for those covered by CSRS). The amount of the retirement deduction or deposit is a percentage of your basic pay before it is reduced by the annuity you receive. If you are a retiree who is being considered for re-employment, be sure to ask if one of the above exceptions applies to you. If it does, you need to be aware that no matter how long you work, by law you won’t be entitled to either a supplemental or a redetermined annuity. And you won’t be able to make a deposit to get credit for that time. For annuity purposes, it will be just as if you’d never gone back to work.