Federal Retirement Plans Complicated by Shutdown

federal workers - Aubrey Lovegrove

Federal employee retirement has been caught in a complicated web weaved by the partial government shutdown. Various factors come into play when determining if a federal employee is able to retire during the lapse in appropriations.

The good news is that the Office of Personnel Management Retirement Services is funded by the Federal government’s retirement trust fund. This means that it operates normally whether OPM is open or closed. This further means that employees can choose to retire freely if they have received their fiscal 2019 appropriations and they won’t experience any abnormal delays.

Things only get more complicated is what happens if an employee at a shuttered agency had plans to retire this month. As long as an employee had issued a request to retire at a certain date, he or she would be considered to have retired at the given date. Even so, once the government reopens paperwork may need to be filled retroactively. This is according to a shutdown guidance from OPM.
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OPM wrote, “for employees who, on or before the requested retirement date, submitted some notice of their desire to retire, agencies should then lapse in appropriation ends, make the retirement effective as of the date requested.”

Problems begin to come up within individual agencies, where during shutdowns human resources departments are usually deserted. The retirement package, including large sum payments for unused leave, could be delayed if your retirement date is during the shutdown, depending on whether or not an agency has completed the necessary portion of the retirement process.

For those scheduled to retire after the start of the shutdown and before the end of the leave year, OPM said that they won’t lose leave hours over the annual rollover cap, even if agency furloughs prevented their retirement from being processed on time.

For those employees that had planned to retire during the shutdown and had not informed their agencies would most likely have to wait until after the government reopens to start the process.

Don Fletcher

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