How Politics and Being Fired Can Effect Federal Retirement

From February 1, 2016 – January 29, 2018

Andrew McCabe was the Deputy Director of the Federal Bureau of Investigation (FBI). He left his position at the FBI in January but used his accumulated leave to stay on the rolls as a federal employee until he was able to qualify for retirement when he turned fifty.

Attorney Jeff Sessions fired McCabe March 16, 2018. McCabe turned 50 on March 18, 2018. Sessions have stated in a press release that the FBI’s Office of Professional Responsibility and Office of Inspector General (OIG) found McCabe disclosed without authorization to the news media and “lacked candor — including under oath — on multiple occasions.”

It was the recommendation of the FBI’s Office of Professional Responsibility that McCabe is fired. This took place after McCabe was accused of misleading investigators, per an internal report by the Justice Departments. Investigators were in search of information as to how the FBI and Justice Department officials handled various issues, potentially pertinent to the 2016 presidential campaign.

Many readers may be asking, “What about his federal pension?”

Most federal employees cannot retire at fifty and receive a federal annuity. Although most probably do not want to retire at that early age unless some other more prosperous opportunity arises. Those who occupy federal positions in law enforcement have that option while most federal employees do not.

The treatment of law enforcement officers (LEOs) is different under the federal retirement system than other employees under the FERS system. Retirement is available to them earlier than the majority of other federal employees. After completing twenty years of service, they are eligible for retirement at the age of fifty. After completing twenty-five years of service, they are eligible for retirement at any age. At age fifty-seven, retirement is mandatory for LEOS because of the highly physical nature of their jobs.

LEO’s also received a Special Retirement Supplement are also obtained by LEOs until age sixty-two that approximates the Social Security benefit earned in Federal service. If the retiree has earnings from self-employment or wages exceeding the Social Security annual exempt amount, after reaching the Minimum Retirement Age (MRA), the Special Retirement Supplement terminated or reduced.

Annuity Supplement is not available to retirees who are not LEOs until reaching the minimum retirement age.

Federal Retirement System Rumors Online

The story about McCabe’s potential termination so soon before turning fifty, the stories began to surface about McCabe losing his right to a federal pension:

“…McCabe has been fired 26 hours before his formal retirement — a move that could cost him his federal pension.”

– Vox

“If he (McCabe) is fired by the attorney general, as recommended by the FBI’s Office of Professional Responsibility, before his official retirement date of March 18, 2018, he will lose his pension and all retirement benefits.”

– The Washington Free Beacon

“Former Deputy FBI Director Andrew McCabe might be able to save the pension he lost after Attorney General Jeff Sessions fired him” as “four Democratic members of the House of Representatives have offered McCabe jobs in a last-ditch effort to save his retirement benefits.”

– The Business Insider

Law & Crime published ran the headline: “Andrew McCabe Just Lost A $2 Million Pension, and There’s Not Much He Can Do About It.”

Though a multitude of articles ran with this approach to the subject, it would sometimes be revealed in the written report that he did not, in fact, lose the entirety of his federal pension. Some left the subject open to interpretation to create the impression that his twenty-one years of federal service were gone. Which would leave him without any retirement benefits due to the Trump administration’s efforts to deny earned retirement to a federal employee? In the numerous articles that appeared with this approach to the topic, it sometimes becomes evident in the section that he did not lose his entire federal pension.

Not Retiring at 50 and the Financial Impact

McCabe’s federal retirement income will likely be impacted by not being able to retire at fifty. Various news sources have estimated his pension income in the range of $55,000 – $60,000 upon retirement at fifty. He would delay departure until the age of fifty-seven, or even as late as sixty-two, instead of retiring at fifty. Which may place the value of his uncollected pension in the range of about $500,000. He may also receive the standard multiplex of one percent under the highest three years of average salary under FERS, instead of 1.7%, the “enhanced” rate for LEOs.

It is not sure if McCabe will be able to take his federal health insurance into retirement with him. It would be a significant loss if he were unable to hang on to a benefit available to most federal retirees, who, on aggregate, are older than fifty when they retire.

In the recent months and years, the fame and recognition he has received, along with his net worth at present, he will likely not be destitute. McCabe possesses law degrees from Duke University and Washington University at St. Louis as well as an estimated net worth of about eleven million dollars and an annual income of $900,000. The bulk of his revenue, clearly, not being from his federal salary.

Fired From Federal Service and How It Relates To FERS. Generally, the American public is under the impression that it is virtually impossible to fire a federal employee. Without a doubt being fired from a federal job, or any job can be traumatic.

Traumatic events, or the social stigma of being fired, does not negate your right to a federal pension. It is not usual for a federal employee with a vested interest in the Federal Employment Retirement System (FERS) to lose the right to a pension as a result of being fired.

After five years of federal service, a federal employee becomes vested. Exceptions apply to circumstances where it could result in losing a federal pension, but it has not yet been supposed that Andrew McCabe has engaged in sabotage, treason, intentional loss or improper sharing of certain highly classified documents, or rebellion against the United States.

Of course, that could change if the internal investigation of the Department of Justice discovers unexpected information. Even if McCabe were to be convicted of criminal activity not involving these items, he would be entitled to receive a fee. He will not be allowed to retire at fifty, which seems to be his original intent. It is possible that he will have to wait until somewhere between fifty-seven and sixty-two years of age to begin collecting retirement…

In Congress, the possibility of giving him a job to allow him to retire at age fifty has been discussed by Democrats. It may be an option. However, he would not be retiring from the FBI in an LEO position. That small difference could most likely be critical in determining if he would still receive the LEO pension starting at fifty. This approach seems unlikely to work for McCabe or any other federal employee.

Summary

Termination from a federal job, surrounded with publicity and scrutiny as McCabe has been, would indeed be jarring. Politics is a rough field. Career federal employees are no exception, especially at the senior levels, and particularly for employees who are involved with politics. McCabe’s experience here will continue to amass as events play out over the coming months.

How Politics and Being Fired Can Effect Federal Retirement

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