Phased Retirement, 33911-33939 [2013-13182]
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Vol. 78
Wednesday,
No. 108
June 5, 2013
Part III
Office of Personnel Management
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5 CFR Parts 581, 582, 831, et al.
Phased Retirement; Proposed Rule
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OFFICE OF PERSONNEL
MANAGEMENT
5 CFR Parts 581, 582, 831, 838, 841,
842, 843, 848, 870 and 890
RIN 3206–AM71
Phased Retirement
Office of Personnel
Management.
ACTION: Proposed rule.
TKELLEY on DSK3SPTVN1PROD with PROPOSALS2
AGENCY:
SUMMARY: The Office of Personnel
Management (OPM) is proposing to
implement phased retirement, a new
human resources tool that allows fulltime employees to work a part-time
schedule while beginning to draw
retirement benefits. Section 100121 of
the ‘‘Moving Ahead for Progress in the
21st Century Act,’’ or ‘‘MAP–21,’’
authorizes phased retirement under the
Civil Service Retirement System and the
Federal Employees’ Retirement System
and requires OPM to publish regulations
implementing phased retirement. The
purpose of phased retirement is to allow
the Federal Government to continue to
benefit from the services of experienced
employees who might otherwise choose
to retire. These proposed regulations
inform agencies and employees about
who may elect phased retirement, what
benefits are provided in phased
retirement, how an annuity is computed
during and after phased retirement, and
how employees fully retire from phased
retirement.
DATES: We must receive your comments
by August 5, 2013.
ADDRESSES: You may submit comments,
identified by docket number and/or RIN
number 3206–AM71 by any of the
following methods:
• Federal eRulemaking Portal: https://
www.regulations.gov. Follow the
instructions for submitting comments.
• Email: combox@opm.gov. Include
RIN number 3206–AM71 in the subject
line of the message.
• Mail: Kristine Prentice, Retirement
Policy, Retirement Services, Office of
Personnel Management, 1900 E Street
NW., Washington, DC 20415–3200.
FOR FURTHER INFORMATION CONTACT:
Kristine Prentice, (202) 606–0299.
SUPPLEMENTARY INFORMATION: OPM
proposes to amend parts 581, 582, 831,
838, 841, 842, 843, 870 and 890, and
add a new 5 CFR part 848 to implement
phased retirement as required by section
100121, the ‘‘Moving Ahead for Progress
in the 21st Century Act,’’ or ‘‘MAP–21,’’
Public Law 112–141.
Background
Phased retirement is a new human
resources management tool made
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possible by section 100121 of MAP–21,
which amended chapters 83 and 84 of
title 5, United States Code, by adding
provisions, at 5 U.S.C. 8336a and 8412a,
for phased retirement. The phased
retirement provisions of law require
OPM to publish final regulations to
implement phased retirement.
Phased retirement will in essence
permit an individual to retire from part
of his or her employment, while
continuing employment on a part-time
basis and continuing to earn additional
retirement benefits proportionately
based upon the additional part-time
employment. An eligible employee who
enters phased retirement, which
requires the approval of an authorized
agency official, will work half-time and
will receive one half of what his or her
annuity would have been had the
individual retired completely from
Federal service. During phased
retirement, he or she is a part-time
employee, not a reemployed annuitant.
Phased retirement will encourage the
most experienced Federal employees to
extend their contributions to the Nation,
and will operate as a tool to ensure
continuity of operations and to facilitate
knowledge management. The main
purpose of phased retirement is to
enhance mentoring and training of the
employees who will be filling the
positions of more experienced
employees who are preparing for full
retirement. It is intended to encourage
experienced employees to remain, in at
least a part-time capacity, while less
experienced employees are preparing to
assume the duties of the employees who
are planning to retire.
An effective phased retirement plan
has been a long-sought goal. However,
under prior law, the problem was that
an individual who was retirement
eligible but wished to continue
employment on a part-time basis
generally had little economic incentive
to do so because an employee’s
potential retirement benefits would
often be equal to or greater than his or
her salary would be for part-time
employment.
A person who enters phased
retirement (hereafter a ‘‘phased
retiree,’’) would receive more income
than he or she would earn by simply
changing to a part-time work schedule
or by simply retiring, while continuing
to share knowledge and expertise with
the next generation of Federal leaders
via mentoring and role-modeling. Once
these individuals fully retire, they will
be entitled to a greater annuity than if
they had fully retired at the time of
transition to phased retirement, but less
than if they had continued employment
on a full-time basis.
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Eligibility
Participation is entirely voluntary,
and requires the mutual consent of both
the employee and employing agency.
An employee does not have an
entitlement to phased retirement. In
order to participate, an individual must
have been employed on a full-time basis
for the preceding three years. Under the
Civil Service Retirement System (CSRS),
the individual must be eligible for
immediate retirement with at least 30
years of service at age 55, or with 20
years of service at age 60. Under the
Federal Employees’ Retirement System
(FERS), the individual must be eligible
for immediate retirement with at least
30 years of service at MRA (minimum
retirement age, which ranges between
age 55 and 57 depending upon year of
birth), or with 20 years of service at age
60.
The law provides that employees
subject to mandatory retirement
(including Law Enforcement Officers,
Firefighters, Nuclear Materials Couriers,
Air Traffic Controllers, Customs and
Border Protection Officers, or members
of the Capitol Police or Supreme Court
Police) may not participate. However,
certain employees who are exempt from
mandatory separation and retirement
(such as Customs and Border Protection
Officers exempted from mandatory
retirement when special retirement
provisions for Customs and Border
Protection Officers were first enacted)
may participate. This exemption does
not apply to individuals for whom
mandatory retirement has been waived,
but only to individuals not subject to
mandatory retirement by statute.
It is noteworthy that while the
statutory provisions concerning
employees subject to mandatory
retirement could have been more clearly
drafted, the legislative history makes the
intent both clear and specific. The
language was taken directly from a
different free-standing phased
retirement bill, H.R. 4363, reported out
of the House of Representatives
Committee on Oversight and
Government Reform on June 15, 2012.
That report, H.R. Rep. No. 535, 112th
Congress, 2nd Sess. 4 (2012), discussed
this provision, with this explanation in
the section-by-section analysis:
Subsection (a) of 5 U.S.C. 8336a defines
the terms that are used in the new section.
Individuals subject to mandatory retirement,
such as law enforcement, firefighters, nuclear
materials couriers, air traffic controllers,
customs and border protection officers, or
members of the Capitol Police or Supreme
Court Police, may not elect phased
retirement.
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Moreover, the Conference Report,
H.R. Rep. No. 557, 112th Congress, 2nd
Sess. 667 (2012), further describes
details of the provisions including the
exemption:
The Senate amendment excludes from
eligibility law enforcement officers,
firefighters, nuclear materials couriers, air
traffic controllers, customs and border
protection officers, or members of the Capital
Police or Supreme Court Police.
*
*
*
*
*
Second, the provision provides that certain
law enforcement officers such as Customs
and Border Protection Officers hired before
2008 (when they were granted lawenforcement type status which makes them
ineligible for phased retirement under the
Senate Amendment because they are subject
to mandatory retirement) are eligible for
phased retirement.
Withdrawing From Phased Retirement
To Resume Regular Employee Status
After entering phased retirement, a
phased retiree can end his or her phased
retirement to return to being a regular
full-time employee, if the employing
agency agrees to the change. The phased
retirement annuity will then terminate.
Upon later full retirement, the
individual’s retirement will be
calculated under the laws then in effect,
with the period of phased retirement
treated as part-time service. Once an
individual has gone back to being a fulltime employee, the individual cannot
elect to go back into phased retirement.
Transition From Phased Retirement to
Full Retirement
A phased retiree may voluntarily
apply for full retirement in the same
manner as other employees. The
employee does not have to obtain the
permission of his or her agency to fully
retire.
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Benefits and Computation
Eligible employees who enter phased
retirement will work half-time and will
receive additional credit for that service
toward their full retirement. While
working part-time during phased
retirement, employees will also receive
annuity payments, consistent with the
retirement benefits they were entitled to
prior to entering phased retirement
status, divided by the ‘‘phased
retirement percentage’’ (i.e., 50 percent).
Deposits and redeposits for service
credit (including for military service)
must be satisfied (either by payments or
annuity reduction as applicable) prior to
entry into phased retirement status;
however, if an individual ends phased
retirement status to return to regular
employee status, deposits and
redeposits for service credit would again
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be permitted. Any reduction in annuity
or loss of service credit at the time of
entry into phased retirement will be
permanent for the employee, unless the
individual ends phased retirement
status by returning to full-time
employment and has a new opportunity
to make deposits or redeposits for
service credit. Employees wishing to
make a deposit or redeposit for civilian
service may submit a request to make
the service credit payment with their
applications for phased retirement.
They will then be given a final
opportunity to pay the deposit or
redeposit before processing of the
phased retirement benefit is completed.
No deposits or redeposits can be made
by the employee after the phased
retirement application has been
processed (unless the employee elects to
opt out of phased retirement status and
return to regular employment). If a
phased retiree dies while in phased
employment status, the survivors can
make deposits or redeposits on the same
basis as if the decedent had not been a
phased retiree.
Phased retirement annuities will be
subject to court orders providing for
division, allotment, assignment,
execution, levy, attachment,
garnishment, or other legal process on
the same basis as other annuities. At the
same time, phased retirees’ pay from
their half-time employment is subject to
garnishment and other legal process on
the same basis as other Federal
employee pay.
During phased retirement, Federal
Employee Health Benefits (FEHB) and
Federal Employees’ Group Life
Insurance (FEGLI) enrollment will stay
with the employing agency. FEGLI
benefit coverage amounts will be based
upon the full-time salary for the
position. The FEHB employer
contribution will be the same as for fulltime employees.
When the phased retiree fully retires
immediately after the phased retirement
period, the individual will receive a
‘‘composite retirement annuity.’’ The
composite retirement annuity will be
the amount of phased retirement
annuity as of the commencing date of
full retirement, plus one-half of the
amount of annuity that would have been
payable at the time of full retirement if
the individual had not elected phased
retirement and as if the individual was
employed on a full-time basis in the
position occupied during the phased
retirement period. If, at the time of full
retirement, the employee meets the
participation requirements to continue
FEHB and FEGLI during retirement, his
or her FEHB and FEGLI enrollments
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will transfer to OPM when the phased
retiree enters full retirement.
No unused sick leave can be used in
the computation of the phased
retirement annuity. However, at full
retirement the unused sick leave will be
taken into account. While the
computational provisions are somewhat
complex, the value of the sick leave in
that computation will be the same as for
an individual retiring from a full-time
position.
Survivor Benefits
No survivor benefits can be based
upon a phased retirement annuity. If the
phased retiree dies prior to full
retirement, survivor benefits will be
those applicable for an employee who
died in service, with provision for
minor computational adjustments
necessitated by the unique nature of
phased retirement. If the individual dies
during phased retirement, the period of
phased retirement will be treated as a
period of part-time service in the
computation of the survivor annuity.
However, the FERS Basic Employee
Death Benefit will be based upon the
full-time salary of the position.
Garnishment and Phased Retirees
Garnishment orders for phased
retirees will be treated much the same
way as those for reemployed annuitants.
The rules that typically apply to
garnishment of annuities will continue
to apply to the phased retirement
annuity a phased retiree receives, and
the rules that typically apply to pay will
continue to apply to the salary a phased
retiree receives during phased
employment. For instance, phased
retirement annuities, like regular
Federal annuities, will not be subject to
commercial garnishments under 5 CFR
part 582, but the part-time pay received
during phased employment will
continue to be subject to commercial
garnishment.
Section-by-Section Description of
Proposed Regulations
Part 581—Processing Garnishment
Orders for Child Support And/Or
Alimony
Phased retirement annuities and pay
are subject to the same rules for
processing garnishment orders for child
support and/or alimony as regular
annuities and other Federal pay.
Technical changes are made to add two
definitions in § 581.102. Paragraph (l)
adds a definition for ‘‘phased retirement
status’’ and paragraph (m) adds a
definition for ‘‘phased retirement
annuity.’’ Both terms are defined by
cross-reference to § 838.103, which
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provides new terms for processing court
orders for phased retirees.
The current § 581.306 explains the
obligation of governmental entities
when in receipt of a garnishment order
for child support and/or alimony and
when there is not money due to the
employee-obligor or when the obligor
moves to a different governmental
entity. Paragraph (d) is added to
§ 581.306 to account for employees who
enter phased retirement status.
Governmental entities will still be
obligated to honor the garnishment
order as it pertains to ongoing part-time
pay. However, paragraph (d) imposes an
additional obligation on the
governmental entity, similar to current
paragraph (c), to notify the party who
caused the legal process to be served
that the obligor is now entitled to a
phased retirement annuity and to direct
the party to the designated agent at the
Office of Personnel Management who is
responsible for the disbursement of
retirement benefits. The title of
§ 581.306 was also amended to add
‘‘transfer of service of legal process to
another governmental entity’’ to account
for the provisions in paragraphs (c) and
(d).
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Part 582—Commercial Garnishment of
Federal Employees’ Pay
Phased retirees’ pay is treated the
same way as other Federal pay for
purposes of commercial garnishment
orders. Technical changes are made to
§ 582.102, paragraph (2). In paragraph
(2), the definition of ‘‘employee or
employee-obligor’’ is amended to add
‘‘individuals engaged in phased
employment.’’
Subpart Q of Part 831
OPM is proposing to add subpart Q to
part 831 to set out the requirements for
entering, exiting, and retiring under the
new phased retirement option under
CSRS. Subpart Q establishes the
eligibility requirements for making an
election of phased retirement, the
procedures for electing phased
retirement, the requirements for
agencies to notify OPM of phased
retirement actions, and the methodology
OPM intends to use to compute phased
retirement annuities under 5 U.S.C.
8336a.
Sections 831.1701 through 831.1703
explain the purpose and scope of the
regulations, define terms used in
subpart Q, and provide that the Director
of OPM may issue implementing
directives regarding the phased
retirement program. In particular,
§ 831.1702 provides a definition of
‘‘full-time.’’ This definition does not
include certain categories of full-time
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employees listed in the definition of
‘‘full-time service’’ in § 831.703—
namely, certain firefighters
compensated under 5 U.S.C. 5545b and
certain employees with less-than-fulltime schedules who are deemed to be
full-time employees by express
provision of law (e.g., nurses with
special work schedules under 38 U.S.C.
7456 or 7456A). Employees with these
special work schedules may not elect
phased retirement, since regularly
recurring part-time employment is not a
possibility under the applicable law.
(Almost all firefighters compensated
under 5 U.S.C. 5545b would also be
ineligible for phased retirement on the
additional basis that they are eligible for
an early and enhanced retirement with
mandatory separation provisions.)
Section 831.1711 sets out the
eligibility requirements for entering
phased retirement. Eligibility for phased
retirement is limited to employees who
have been employed on a full-time basis
for not less than the 3-year period
ending on the effective date of the
employee’s election of phased
retirement. Under CSRS, these
employees must also be eligible for
immediate retirement with at least 30
years of service at age 55, or with 20
years of service at age 60. Employees
who do not meet these requirements
will be excluded from electing phased
retirement.
For the purposes of phased
retirement, a retirement-eligible
employee is an employee who, if
separated from the service, would meet
the requirements for retirement under
subsection (a) or (b) of 5 U.S.C. 8336. As
discussed above, a retirement-eligible
employee in this context does not
include an employee subject to
mandatory retirement, with limited
exceptions. There is no reason for such
employees to wish to participate in
phased retirement because 5 U.S.C.
8336a requires that the phased
retirement computations are made using
the general formula applicable to regular
employee service.
In addition, since the phased
retirement law requires that an
employee be converted from full-time to
part-time, § 831.1711 makes clear that
phased retirement may not be elected by
employees covered by a special work
schedule authority that does not allow
for a regularly recurring part-time
schedule, such as a firefighter covered
by 5 U.S.C. 5545b or a nurse covered by
38 U.S.C. 7456 or 7456A.
Section 831.1712 describes how
‘‘working percentage’’ would be
defined. The law uses the term
‘‘working percentage’’ to refer to the
percentage of a full-time schedule that
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a phased retiree would be scheduled to
work. The statute permits a working
percentage of 50 percent (i.e., a halftime work schedule) and contemplates
additional working percentages, at
OPM’s discretion. Although a working
percentage of 50 percent would be the
only working percentage permitted
under § 831.1712, the section has been
drafted using general descriptive
language to easily allow OPM to amend
the regulations in the future to allow
working percentages other than 50
percent, if and when OPM determines
that such an amendment is appropriate.
Unless and until OPM evaluates the
phased retirement program and
publishes regulations permitting a
different ‘‘working percentage,’’ a
phased retiree will not be permitted to
have a working percentage other than 50
percent. Section 831.1712 defines
‘‘working percentage’’ as the percentage
of full-time equivalent employment
equal to the quotient obtained by
dividing (1) the number of officially
established hours per pay period to be
worked by a phased retiree by (2) the
number of hours per pay period to be
worked by an employee serving in a
comparable position on a full-time
basis. In other words, the number of
hours per pay period in a phased
retiree’s officially established part-time
work schedule must equal one-half the
number of hours the phased retiree
would have worked had the phased
retiree remained in a full-time work
schedule and not elected to enter
phased retirement status. The phased
retiree’s officially established part-time
work schedule excludes any additional
(excess) hours worked under the special
exception authority in § 831.1715(h)
(discussed below).
Sections 831.1713 through 831.1715
set out the requirements for an
employee to elect phased retirement,
establish the commencing date of the
phased annuity (and therefore the
effective date of the half-time work
schedule, or what we are calling
‘‘phased employment’’), and state the
effect of phased retirement. Section
831.1713 provides that an authorized
agency official must give the potential
phased retiree written approval for the
change. Section 831.1713(d) allows an
agency to establish a time limit on the
phased retirement election of any
employee as a condition of approving
the election to phased retirement. To
implement such a time limit, the agency
and the employee requesting phased
retirement must complete a written and
signed agreement. The agency is
responsible for drafting an agreement
that meets the requirements enumerated
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in § 831.1713(d)(3). The agency is also
responsible for defending any
challenges to an agreement made with
an employee under § 831.1713(d). The
election must be accompanied by a
retirement application, in accordance
with § 831.104.
Section 831.1715(a)(1) provides,
consistent with 5 U.S.C. 8336a(i), that a
phased retiree is deemed to be a fulltime employee for the purpose of the
Federal Employees Health Benefits
Program. Section 831.1715(a)(2) has
provisions for determining the amount
of deemed basic pay and the deemed
full-time schedule for determining
Federal Employees’ Life Insurance
benefits and premiums. Any premium
pay normally creditable as basic pay
under 5 CFR 870.204 for overtime work
outside of a full-time schedule may not
be considered in determining a phased
retiree’s deemed annual rate of basic
pay for life insurance purposes. A
conforming change is also being made to
5 CFR 870.204. Section 831.1715(h)
describes the conditions under which a
phased retiree may, in rare and
exceptional circumstances, work hours
in excess of officially established hours,
as well as related agency responsibilities
and OPM authorities. The limitations
and controls on excess hours are
necessary and proper to carry out the
intent of the phased retirement law and
ensure that phased retirees do not work
significant hours beyond the working
percentage used to compute the phased
retirement annuity. In promulgating
§ 831.1715(h), we are relying on OPM’s
broad regulatory authority in 5 U.S.C.
8347(a), as well as the authority in 5
U.S.C. 8336a(b)(1) to prescribe
regulations governing the phased
retirement resulting from employee
elections.
Sections 831.1721 through 831.1723
describe how a phased retiree may
return to regular employment status, the
effective date of the decision to end
phased retirement, and what happens to
the phased annuity as a result of
returning to a regular employment
status. Section 831.1721(a) provides that
an authorized agency official must give
the phased retiree written permission to
return to regular employment on a form
prescribed by OPM. With an authorized
agency official’s approval, the employee
may enter into any type of work
schedule after returning to regular
employment. When an individual in
phased retirement status returns to
regular employment status, the phased
retirement annuity terminates; therefore,
agencies are required to immediately
notify OPM of a phased retiree’s return
to regular employee status to prevent
improper payments. Section 831.1721(b)
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also includes provisions concerning the
return of a phased retiree to regular
employment status. For a phased retiree
who returns to regular employment
under § 831.1721(a) or (b), § 831.1723
provides that the period of phased
employment will be treated as a period
of part-time service under subchapter
III, chapter 83, of title 5, United States
Code. Consistent with 5 U.S.C.
8336a(g)(3), the phased retirement
period will be deemed to have been a
period of part-time employment with
the work schedule described in
§ 831.1712. The part-time proration
adjustment will be based upon the
individual’s officially established parttime work schedule, with no credit for
extra hours worked. In determining the
individual’s deemed rate of basic pay
during the phased retirement period,
only basic pay for hours within the
individual’s officially established parttime work schedule may be considered.
No pay received for other hours during
the phased retirement period may be
included as part of basic pay for the
purpose of computing retirement
benefits, notwithstanding the normally
applicable rules. A phased retiree who
returns to regular employee status
would not be entitled to a composite
retirement annuity upon subsequent
retirement; the employee’s rights under
subchapter III of chapter 83 or chapter
84 of title 5, United States Code, would
be determined based on the law in effect
at the time of any subsequent separation
from service.
Sections 831.1731 and 831.1732
describe how an employee may elect to
fully retire and how OPM will
determine the commencing date of the
employee’s composite retirement
annuity. These sections also discuss
how OPM will treat an employee who
has separated from phased employment
and the criteria by which OPM will
either continue to pay a phased
retirement annuity or terminate
payment as required by law.
Sections 831.1741 through 831.1744
establish how OPM intends to compute
the phased retirement annuity and the
composite annuity payable at full
retirement under CSRS. Section
831.1741 provides that, subject to any
adjustments for unpaid deposits of
retirement contributions and Social
Security old-age benefits, the phased
retirement annuity equals (1) the
amount of annuity computed under 5
U.S.C. 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, (2) adjusted by the phased
retirement percentage for the phased
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33915
retiree. Phased retirement annuities will
be increased by cost-of-living
adjustments. Section 831.1742
establishes the computation of the
composite retirement annuity. Subject
to any reduction to provide a survivor
annuity and adjustments for unpaid
deposits of retirement contributions and
Social Security old-age benefits, the
composite retirement annuity consists
of the phased retirement annuity,
increased by cost-of-living adjustments,
plus the ‘‘fully retired phased
component.’’ The ‘‘fully retired phased
component’’ is (1) the amount of an
annuity computed under 5 U.S.C. 8339
that would have been payable at the
time of full retirement if the individual
had not elected phased retirement status
and as if the individual was employed
on a full-time basis in the position
occupied during the phased retirement
period and before any reduction for
survivor annuity multiplied by (2) the
working percentage. Section 831.1742(b)
establishes rules for deemed full-time
and deemed basic pay for the purposes
of computing the ‘‘fully retired phased
component.’’ The law requires phased
retirees to be deemed to be full-time for
the purpose of determining basic pay for
life insurance and composite annuity,
and also limits pay subject to retirement
deductions based on the concept of fulltime. For those purposes, we have taken
a consistent approach of defining fulltime to be 40 hours a week and to
exclude overtime hours; thus, any pay
for overtime hours (hours beyond the
full-time schedule—which normally
should not be worked by a phased
retiree) is not considered basic pay for
life insurance or retirement purposes.
The deemed full-time schedule is five 8hour workdays each workweek,
resulting in a 40-hour workweek,
consistent with other provisions in the
regulations. In determining the
individual’s deemed rate of basic pay
during phased retirement, only basic
pay for hours within the deemed fulltime schedule will be considered for the
computation of the composite
retirement annuity at full retirement.
Similarly, §§ 831.1721 and 831.1761
include provisions concerning deemed
part-time (see discussion of those
sections).
Sections 831.1751 through 831.1753
describe how OPM intends to treat
civilian deposits and redeposits, as well
as military service deposits. Section
831.1751 outlines the process OPM will
follow with regard to deposits for
civilian service for which no retirement
deductions were withheld and for
redeposits owed for civilian service
previously refunded to the employee.
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Deposits and redeposits will not be
possible at the point where a phased
retiree elects to enter full retirement
status. Section 831.1752 refers
specifically to how OPM will treat
military service deposits, whether for
military service prior to phased
retirement or military service after
phased retirement begins. Section
831.1753 describes how OPM intends to
treat civilian and military service of
individual employees affected by
erroneous retirement coverage
determinations.
Sections 831.1761 through 831.1763
set out how OPM plans to administer
death benefits for employees who die
while in phased retirement and for
employees who die after separation
from phased employment without
having submitted an application for a
composite retirement annuity.
Consistent with 5 U.S.C. 8336a(h)(2),
§ 831.1761(a)(2) provides that when a
phased retiree dies in service, the
phased retiree is deemed to have had a
part-time schedule consistent with the
working percentage. Any hours beyond
that part-time schedule and any pay
associated with such hours would not
be creditable for retirement purposes.
Section 831.1771 addresses
reemployment of an individual who has
separated from phased employment and
who dies before submitting an
application for a composite retirement
annuity.
Section 831.1781, as provided by
MAP–21, requires a phased retiree
(other than an employee of the U.S.
Postal Service) to spend at least 20
percent of his or her working hours in
mentoring activities. It is up to the
phased retiree’s employing agency to
determine what types of mentoring
activities satisfy this requirement and
how to ensure this requirement is being
fulfilled. The phased retiree may mentor
one or more employees of the agency
and need not mentor the same
employees throughout the period of
phased retirement. Although it would
clearly be desirable in many instances
for the phased retiree to mentor the
employee or employees who are
expected to assume his or her duties
when the phased retiree fully retires, the
law does not provide that this is the
only way to implement the mentoring
requirement. An authorized agency
official may waive the mentoring
requirement in the event of an
emergency or other unusual
circumstances that would make it
impracticable, such as when the
individual is called to active-duty
military service. OPM expects waivers
of the mentoring requirement to be very
rare.
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Part 848—Federal Employees’
Retirement System
Part 848 is being added to 5 CFR, to
set out the requirements for entering,
exiting, and retiring under the new
phased retirement option under the
Federal Employees’ Retirement System
(FERS). Part 848 establishes the
eligibility requirements for making an
election of phased retirement, the
procedures for electing phased
retirement, the requirements for
agencies to notify OPM of phased
retirement actions, and the methodology
OPM intends to use to compute phased
retirement annuities under 5 U.S.C.
8412a.
Sections 848.101 through 848.103
explain the purpose and scope of the
regulations, define terms used in part
848, and provide that the Director of
OPM may issue implementing directives
regarding the phased retirement
program. In particular, § 848.102
provides a definition of ‘‘full-time.’’
This definition does not include certain
categories of full-time employees listed
in the definition of ‘‘full-time service’’
in § 842.402—namely, certain
firefighters compensated under 5 U.S.C.
5545b and certain employees with lessthan-full-time schedules who are
deemed to be full-time employees by
express provision of law (e.g., nurses
with special work schedules under 38
U.S.C. 7456 or 7456A). Employees with
these special work schedules may not
elect phased retirement, since regularly
recurring part-time employment is not a
possibility under the applicable law.
(Almost all firefighters compensated
under 5 U.S.C. 5545b would also be
ineligible for phased retirement on the
additional basis that they are eligible for
an early and enhanced retirement with
mandatory separation provisions.)
Section 848.201 sets out the eligibility
requirements for entering phased
retirement. Eligibility for phased
retirement is limited to employees who
have been employed on a full-time basis
for not less than the 3-year period
ending on the effective date of the
employee’s election of phased
retirement. Under FERS, these
employees must also be eligible for
immediate retirement with at least 30
years of service at their minimum
retirement age, or with 20 years of
service at age 60. Employees who do not
meet these requirements will be
excluded from electing phased
retirement.
For the purposes of phased
retirement, a retirement-eligible
employee is an employee who, if
separated from the service, would meet
the requirements for retirement under
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subsection (a) or (b) of 5 U.S.C. 8412. As
discussed above, a retirement-eligible
employee will not include an employee
subject to mandatory retirement, with
limited exceptions. There is no reason
for such employees to wish to
participate in phased retirement because
5 U.S.C. 8412a requires that the phased
retirement computations be made using
the general formula applicable to regular
employee service.
In addition, since the phased
retirement law requires that an
employee be converted from full-time to
part-time, § 848.201 makes clear that
phased retirement may not be elected by
employees covered by a special work
schedule authority that does not allow
for a regularly recurring part-time
schedule, such as a firefighter covered
by 5 U.S.C. 5545b or a nurse covered by
38 U.S.C. 7456 or 7456A.
Section 848.202 describes how
‘‘working percentage’’ would be
defined. The law uses the term
‘‘working percentage’’ to refer to the
percentage of a full-time schedule that
a phased retiree would be scheduled to
work. The statute permits a working
percentage of 50 percent– that is, a halftime work schedule—and contemplates
additional working percentages, at
OPM’s discretion. Although a working
percentage of 50 percent would be the
only working percentage permitted
under § 848.202, the section has been
drafted using general descriptive
language to easily allow OPM to amend
the regulations in the future to allow
working percentages other than 50
percent, if and when OPM determines
that such an amendment is appropriate.
Unless and until OPM evaluates the
phased retirement program and
publishes regulations permitting a
different ‘‘working percentage,’’ a
phased retiree will not be permitted to
have a working percentage other than 50
percent. Section 848.202 defines
‘‘working percentage’’ as the percentage
of full-time equivalent employment
equal to the quotient obtained by
dividing (1) the number of officially
established hours per pay period to be
worked by a phased retiree by (2) the
number of hours per pay period to be
worked by an employee serving in a
comparable position on a full-time
basis. In other words, the number of
hours per pay period in a phased
retiree’s officially established part-time
work schedule must equal one-half the
number of hours the phased retiree
would have worked had the phased
retiree remained in a full-time work
schedule and not elected to enter
phased retirement status. The phased
retiree’s officially established part-time
work schedule excludes any additional
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(excess) hours worked under the special
exception authority in § 848.205(j).
Sections 848.203 through 848.205 set
out the requirements for an employee to
elect phased retirement, establish the
effective date of phased employment
and the commencing date of phased
annuity, and state the effect of phased
retirement. Section 848.203 provides
that an authorized agency official must
give the potential phased retiree written
approval for the change. Section
848.203(d) allows an agency to establish
a time limit on the phased retirement
election of any employee as a condition
of approving the election to phased
retirement. To implement such a time
limit, the agency and the employee
requesting phased retirement must
complete a written and signed
agreement. The agency is responsible for
drafting an agreement that meets the
requirements enumerated in
§ 848.203(d)(3). The agency is also
responsible for defending any
challenges to an agreement made with
an employee under § 848.203(d). The
election must be accompanied by a
retirement application, in accordance
with § 841.202.
Section 848.205(a)(1) provides,
consistent with 5 U.S.C. 8412a(i), that a
phased retiree is deemed to be a fulltime employee for the purpose of the
Federal Employees Health Benefits
Program. Section 848.205(a)(2) has
provisions for determining the amount
of deemed basic pay and the deemed
full-time schedule for determining
Federal Employees’ Life Insurance
benefits and premiums. Any premium
pay normally creditable as basic pay
under 5 CFR 870.204 for overtime work
outside of a full-time schedule may not
be considered in determining a phased
retiree’s deemed annual rate of basic
pay for life insurance purposes. A
conforming change is also being made to
5 CFR 870.204. Section 848.205(j)
describes the conditions under which a
phased retiree may, in rare and
exceptional circumstances, work hours
in excess of officially established hours,
as well as related agency responsibilities
and OPM authorities. The limitations
and controls on excess hours are
necessary and proper to carry out the
intent of the phased retirement law and
ensure that phased retirees do not work
significant hours beyond the working
percentage used to compute the phased
retirement annuity. In promulgating
§ 848.205(j), we are relying on OPM’s
broad regulatory authority in 5 U.S.C.
8461(g), as well as the authority in 5
U.S.C. 8412a(b)(1) to prescribe
regulations governing the phased
retirement resulting from employee
elections.
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Sections 848.301 through 848.303
describe how a phased retiree may
return to regular employment status, the
effective date of the decision to end
phased retirement, and what happens to
the phased annuity as a result of
returning to a regular employment
status. Section 848.301(a) provides that
an authorized agency official must give
the phased retiree written permission to
return to regular employment on a form
prescribed by OPM. With an authorized
agency official’s approval, the employee
may enter into any type of work
schedule after returning to regular
employment. When an individual in
phased retirement status returns to
regular employment status, the phased
retirement annuity terminates; therefore,
agencies are required to immediately
notify OPM of these changes to prevent
improper payments. Section 848.301(b)
also includes provisions concerning the
return of a phased retiree to regular
employment status. For a phased retiree
who returns to regular employment
under § 848.301(a) and (b), § 848.303
provides that the period of phased
employment will be treated as a period
of part-time service under chapter 84 of
title 5, United States Code. Consistent
with 5 U.S.C. 8412a(g)(3), the phased
retirement period will be deemed to
have been a period of part-time
employment with the work schedule
described in § 848.202. The part-time
proration adjustment will be based upon
the individual’s officially established
part-time work schedule, with no credit
for extra hours worked. In determining
the individual’s deemed rate of basic
pay during the phased retirement
period, only basic pay for hours within
the individual’s officially established
part-time work schedule may be
considered. No pay received for other
hours during the phased retirement
period may be included as part of basic
pay for the purpose of computing
retirement benefits, notwithstanding the
normally applicable rules. A phased
retiree who returns to regular employee
status would not be entitled to a
composite retirement annuity upon
subsequent retirement; the employee’s
rights under subchapter III of chapter 83
or chapter 84 of title 5, United States
Code, would be determined based on
the law in effect at the time of any
subsequent separation from service.
Sections 848.401 and 848.402
describe how an employee may elect to
fully retire and how OPM will
determine the commencing date of the
employee’s composite retirement
annuity. These sections also discuss
how OPM will treat an employee who
has separated from phased employment
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33917
and the criteria by which OPM will
either continue to pay a phased
retirement annuity or terminate
payment as required by law.
Sections 848.501 through 848.503
cover how OPM intends to compute the
phased retirement annuity and the
composite annuity payable at full
retirement under FERS. Section 848.501
provides that the phased retirement
annuity equals (1) the amount of
annuity computed under 5 U.S.C. 8412
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, (2)
adjusted by the phased retirement
percentage for the phased retiree.
Phased retirement annuities will be
subject to FERS cost-of-living
adjustment provisions. Section 848.502
establishes the computation of the
composite retirement annuity. Subject
to any reduction to provide a survivor
annuity, the composite retirement
annuity consists of the phased
retirement annuity, increased by cost-ofliving adjustments, plus the ‘‘fully
retired phased component.’’ The ‘‘fully
retired phased component’’ is (1) the
amount of an annuity computed under
5 U.S.C. 8412 that would have been
payable at the time of full retirement if
the individual had not elected phased
retirement status and as if the
individual was employed on a full-time
basis in the position occupied during
the phased retirement period and before
any reduction for survivor annuity
multiplied by (2) the working
percentage. Section 831.502(b)
establishes rules for deemed full-time
and deemed basic pay for the purposes
of computing the ‘‘fully retired phased
component.’’ The law requires phased
retirees to be deemed to be full-time for
the purpose of determining basic pay for
life insurance and composite annuity,
and also limits pay subject to retirement
deductions based on the concept of fulltime. For those purposes, we have taken
a consistent approach of defining fulltime to be 40 hours a week and to
exclude overtime hours; thus, any pay
for overtime hours (hours beyond the
full-time schedule—which normally
should not be worked by a phased
retiree) is not considered basic pay for
life insurance or retirement purposes.
The deemed full-time schedule is five 8hour workdays each workweek,
resulting in a 40-hour workweek,
consistent with other provisions in the
regulations. In determining the
individual’s deemed rate of basic pay
during phased retirement, only basic
pay for hours within the deemed full-
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time schedule will be considered for the
computation of the composite
retirement annuity at full retirement.
Similarly, §§ 848.301 and 848.701
include provisions concerning deemed
part-time (see discussion of those
sections).
Section 848.504 specifically states
that FERS phased retirees will not
receive an annuity supplement under 5
U.S.C. 8421.
Sections 848.601 and 848.602
describe how OPM intends to treat
civilian deposits and redeposits as well
as military service deposits. Section
848.601 states that deposits for civilian
service for which no retirement
deductions were withheld and
redeposits owed for civilian service
previously refunded to the employee
must be paid within 30 days of the
employee receiving OPM’s notice.
Deposits and redeposits will not be
possible at the point where a phased
retiree elects to enter full retirement
status. Section 848.602 refers
specifically to how OPM will treat
military service deposits, whether for
military service prior to phased
retirement or military service after
phased retirement begins.
Sections 848.701 through 848.703 set
out how OPM plans to administer death
benefits for employees who die while in
phased retirement and for employees
who die after separation from phased
employment without having submitted
an application for a composite
retirement annuity. Consistent with 5
U.S.C. 8412a(h)(2), § 848.701(a)(2)
provides that when a phased retiree dies
in service, the phased retiree is deemed
to have had a part-time schedule
consistent with the working percentage.
Any hours beyond that part-time
schedule and any pay associated with
such hours would not be creditable for
retirement purposes.
Section 848.801 addresses
reemployment of an individual who has
separated from phased employment and
who dies before submitting an
application for a composite retirement
annuity.
Section 848.901, as provided by
MAP–21, requires a FERS phased retiree
(other than an employee of the U.S.
Postal Service) to spend at least 20
percent of his or her working hours in
mentoring activities. It is up to the
phased retiree’s employing agency to
determine what types of mentoring
activities satisfy this requirement and
how to ensure this requirement is being
fulfilled. The phased retiree may mentor
one or more employees of the agency
and need not mentor the same
employees throughout the period of
phased retirement. Although it would
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clearly be desirable in many instances
for the phased retiree to mentor the
employee or employees who are
expected to assume his or her duties
when the phased retiree fully retires, the
law does not provide that this is the
only way to implement the mentoring
requirement. An authorized agency
official may waive the mentoring
requirement in the event of an
emergency or other unusual
circumstances that would make it
impracticable (such as when the phased
retiree is called to active duty military
service). OPM expects waivers of the
mentoring requirement to be very rare.
Other Technical Conforming
Amendments to Existing Regulations
Because a phased retiree is both an
annuitant and an employee, and is
treated as an annuitant for some
purposes, but an employee for others,
certain regulatory changes are necessary
to inform agencies and employees about
how phased retirement is structured,
how the phased retirement annuity and
the composite annuity will be
computed, and how certain benefits and
obligations will be treated during and
after phased retirement.
Part 831
The Civil Service Retirement System
(CSRS) regulations located in part 831
are being updated where specific
references to phased retirement are
necessary as a result of the passage of
MAP–21. The authority to update part
831 is found in title 5, United States
Code, section 8336a. Therefore, OPM is
updating certain definitions and crossreferences to the new phased retirement
provisions which will be located in
subpart Q.
In § 831.402 we propose to revise the
definition of ‘‘applicant for retirement’’
and add a definition of ‘‘phased retiree.’’
Section 831.501, pertaining to the time
for filing applications for retirement, is
amended to include a reference to
subpart Q for employees and agencies
considering phased retirement. We also
are inserting in § 831.701 a crossreference regarding the effective date of
an annuity with a phased retirement
component. In § 831.703, under which
we compute part-time service, we
propose to clarify the definition of ‘‘fulltime service’’ by specifically describing
categories of full-time employees. While
this definition is outside the phased
retirement area, we are taking this
opportunity to make applicable
paragraphs consistent with the clearer
language in the definition of ‘‘full-time’’
in the phased retirement regulations in
subpart Q. (See § 831.1702.)
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Part 838
OPM is proposing amendments to 5
CFR part 838, concerning court orders
affecting retirement benefits, to allow a
court order acceptable for processing
that is directed at employee annuity to
apportion phased retirement annuity or
composite retirement annuity between
an employee and his or her former
spouse.
Section 838.103 would be amended
by changing and adding definitions
relating to phased retirement. These
changes include (1) defining ‘‘employee
annuity’’ to include recurring payments
of phased retirement annuity and
composite retirement annuity; (2)
defining ‘‘gross annuity,’’ ‘‘net annuity,’’
and ‘‘self-only annuity’’ as including
phased retirement annuity amounts
paid to phased retirees; and (3) defining
‘‘retiree’’ to include a phased retiree
who has entered full retirement status.
Section 838.211 would be amended
by adding paragraph (b), which would
subject phased retirement annuity to
division by a court order acceptable for
processing.
Sections 838.222, 838.232, 838.233,
and 838.237 are being amended by
including references to phased retirees
and phased retirement.
Section 838.242(b) would be amended
to conform to the rule at §§ 831.1742
and 848.502 concerning crediting
unused sick leave in the computation of
a composite retirement annuity.
Section 838.305(e) would be amended
by adding language providing that a
court order directed at the division of
phased retirement annuity or composite
retirement annuity is not a court order
acceptable for processing if it includes
unacceptable instructions concerning
the computation of an employee’s salary
or average salary.
Section 838.306 would be revised to
allow a court order to include express
provisions specifically directed at
division of phased retirement annuity,
composite retirement annuity, or
annuity payable to an employee who
retires without having elected phased
retirement status. Paragraph (b) of
§ 838.306 would be amended to provide
that, unless a court order otherwise
directs, OPM will apply to gross annuity
a formula, percentage, or fraction
directed at annuity payable to either a
retiree or a phased retiree. Paragraph
(c)(2) of § 838.306 would provide that
for a court order to separately provide
for division of phased retirement
annuity or composite retirement
annuity, a provision of a court order
must expressly state that it is directed
at ‘‘phased retirement annuity’’ or
‘‘composite retirement annuity,’’ and
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should state the type of annuity to be
divided (e.g., ‘‘net phased retirement
annuity’’). If such a provision is unclear
as to whether it is directed at gross, net,
or self-only phased retirement annuity
or composite retirement annuity, the
provision will be applied to gross
phased retirement annuity or gross
composite retirement annuity, as
described in § 838.306(b). Paragraph
(c)(3) of § 838.306 would provide that
unless a court order expressly states that
phased retirement annuity or composite
retirement annuity is not to be divided,
a court order meeting the requirements
of § 838.306(a) and that generally
provides for division of annuity without
meeting the requirements of paragraph
(c)(2), regarding the specific type of
annuity being divided, will be applied
to divide any employee annuity,
including phased retirement annuity
and composite retirement annuity.
Thus, paragraph (c)(3) of § 838.306
would allow OPM to honor provisions
in court orders on file with OPM, which
were issued before MAP–21 was
enacted. Parties to a divorce could also
submit a new court order providing for
a different apportionment of annuity
than provided under § 838.306(c)(3).
Sections 838.612, 838.621, and
838.622 would be amended to add
references to phased retirement annuity
and composite retirement annuity.
Section 838.623 would be amended to
add references to phased retirement
annuity and composite retirement
annuity. Paragraph (e) of § 838.623
would provide that a court order
directed at phased retirement annuity or
a composite retirement annuity cannot
limit the computation and division of a
phased retirement annuity or composite
retirement annuity to a particular period
of employment or service. The amount
of service that is included in the
computation of phased retirement
annuity and composite retirement
annuity is established by statute. Any
adjustment in a court order of the
division of annuity will have to be
accomplished through other means.
Appendix A to subpart F of 5 CFR
part 838, has been amended by adding
model paragraphs for dividing phased
retirement annuity and composite
retirement annuity.
Section 838.803 would be amended
by adding paragraph (c), which would
provide that a court order that attempts
to award a former spouse survivor
annuity based on a phased retirement
annuity or to reduce a phased
retirement annuity to provide survivor
benefits is not a court order acceptable
for processing.
Section 838.806(d)(2) would be
amended to allow a former spouse
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survivor annuity to be awarded or a
change to an award of a former spouse
survivor annuity during an employee’s
phased retirement status, before the
commencing date of a composite
retirement annuity.
Section 838.807 would be amended to
make it clear that only employee
annuity payable to a retiree and not a
phased retiree is subject to reduction to
provide a survivor annuity.
Sections 838.1111 would be amended
to make phased retirement annuities
subject to child abuse judgment
enforcement orders.
Part 841
The Federal Employees’ Retirement
System (FERS) regulations located in
parts 841, 842, and 843 are being
updated where specific references to
phased retirement are necessary as a
result of the passage of MAP–21. The
authority for these updates is found in
title 5, United States Code, section
8412a. Therefore, OPM is updating
certain definitions and cross-references
to the new phased retirement provisions
which will be located in part 848.
In § 841.102, we add references to
parts 848 and part 850. In § 841.104 we
revise how we define special terms
throughout the regulations pertaining to
FERS in parts 841 through 850.
Part 842
The definition of ‘‘full-time service’’
in § 842.402, under which we compute
part-time service, would be clarified by
specifically describing categories of fulltime employees. While this definition is
outside the phased retirement area, we
are taking this opportunity to make
applicable paragraphs consistent with
the clearer language in the definition of
‘‘full-time’’ in the phased retirement
regulations in part 848. (See § 848.102.)
Part 843
In § 843.202 we are revising paragraph
(b) to reflect the change in law affecting
the consequences of employee refunds.
Part 870
The change to § 870.101 clarifies that,
for FEGLI purposes, the date of
retirement for a phased retiree is the
date the individual enters full
retirement status.
The proposed rules provide in
§ 870.204, for a phased retiree, the
annual rate of pay used to calculate
Basic and Optional coverage amounts is
the full-time basic pay rate as fixed by
applicable law and regulation for the
position in which the individual serves.
Part 890
The changes to § 890.101 provide that
in the case of a phased retiree, a
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composite retirement annuity is an
immediate annuity for purposes of
eligibility to continue FEHB into
retirement. This clarifies that a phased
retiree who retires on a composite
retirement annuity must meet the
requirement to retire on an immediate
annuity in order to continue FEHB
coverage into retirement.
The proposed rules provide that, for
a phased retiree, the FEHB Government
contribution amount is the full-time
employer contribution as fixed by
applicable law and regulation for the
position in which the individual serves.
These changes can be found in
§ 890.501(h).
Executive Order 13563 and Executive
Order 12866
The Office of Management and Budget
has reviewed this rule in accordance
with E.O. 13563 and E.O. 12866.
Regulatory Flexibility Act
I certify that this regulation will not
have a significant economic impact on
a substantial number of small entities
because the regulation will only affect
retirement payments to Federal
employees who elect phased retirement
status.
List of Subjects
5 CFR Part 581
Alimony, Child support, Government
employees, Wages.
5 CFR Part 582
Claims, Government employees,
Wages.
5 CFR Part 831
Administrative practice and
procedure, Alimony, Claims, Disability
benefits, Firefighters, Government
employees, Income taxes,
Intergovernmental relations, Law
enforcement officers, Pensions,
Reporting and recordkeeping
requirements, Retirement.
5 CFR Part 838
Alimony, Claims, Courts, Government
employees, Pensions, Retirement.
5 CFR Part 841
Administrative practice and
procedure, Air traffic controllers,
Claims, Disability benefits, Firefighters,
Government employees, Income taxes,
Intergovernmental relations, Law
enforcement officers, Pensions,
Retirement.
5 CFR Part 842
Air traffic controllers, Alimony,
Firefighters, Government employees,
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§ 581.306 Lack of moneys due from, or
payable by, a governmental entity served
with legal process; transfer of service of
legal process to another governmental
entity.
Law enforcement officers, Pensions,
Retirement.
5 CFR Part 843
Air traffic controllers, Disability
benefits, Firefighters, Government
employees, Law enforcement officers,
Pensions, Retirement.
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(d) In instances where an employee
obligor, who is employed by a
governmental entity which is honoring
a continuing legal process, enters
phased retirement status in accordance
with part 831, subpart Q, and part 848
of this chapter, the entity must inform
the party who caused the legal process
to be served, or the party’s
representative, and the court or other
authority, that remuneration for
employment will continue at a reduced
rate and that the employee obligor will
be receiving a phased retirement
annuity. The governmental entity must
provide the party with the designated
agent at the Office of Personnel
Management who is responsible for the
disbursement of retirement benefits.
5 CFR Part 848
Air traffic controllers, Alimony,
Firefighters, Government employees,
Law enforcement officers, Pensions,
Retirement.
5 CFR Part 870
Administrative practice and
procedure, Government employees,
Hostages, Iraq, Kuwait, Lebanon, Life
insurance, Retirement.
5 CFR Part 890
Administrative practice and
procedure, Government employees,
Health facilities, Health insurance,
Health professions, Hostages, Iraq,
Kuwait, Lebanon, Military personnel,
Reporting and recordkeeping
requirements, Retirement.
PART 582—COMMERCIAL
GARNISHMENT OF FEDERAL
EMPLOYEES’ PAY
4. The authority citation for part 582
is revised to read as follows:
■
Office of Personnel Management.
Elaine Kaplan,
Acting Director.
Authority: 5 U.S.C. 5520a; 15 U.S.C. 1673;
E.O. 12897; Sec. 582.102 also issued under 5
U.S.C. 8336a and 8412a.
5. Amend § 582.102 by revising
paragraph (2) to read as follows:
■
For the reasons discussed in the
preamble, the Office of Personnel
Management is proposing to amend 5
CFR parts 581, 582, 831, 838, 841, 842,
843, 870, and 890 and add a new part
848 as follows:
PART 581—PROCESSING
GARNISHMENT ORDERS FOR CHILD
SUPPORT AND/OR ALIMONY
1. The authority citation for part 581
is revised to read as follows:
■
Authority: 42 U.S.C. 659; 15 U.S.C. 1673;
E.O. 12105 (43 FR 59465 and 3 CFR
262)(1979). Secs. 581.102 and 581.306 also
issued under 5 U.S.C. 8336a and 8412a.
2. Amend § 581.102 to add paragraphs
(l) and (m) to read as follows:
■
§ 581.102
Definitions.
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(l) Phased retirement status has the
same meaning given that term in
§ 838.103 of this chapter; and
(m) Phased retirement annuity has the
same meaning given that term in
§ 838.103 of this chapter.
■ 3. Amend § 581.306 by revising the
section heading and by adding
paragraph (d) to read as follows:
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§ 582.102
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(2) Employee or employee-obligor
means an individual who is employed
by an agency as defined in this section,
including a reemployed annuitant, an
individual engaged in phased
employment as defined in part 831,
subpart Q, and part 848 of this chapter,
and a retired member of the uniformed
services who is employed by an agency.
Employee does not include a retired
employee, a member of the uniformed
services, a retired member of the
uniformed services, or an individual
whose service is based on a contract,
including an individual who provides
personal services based on a contract
with an agency.
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PART 831—RETIREMENT
6. The authority citation for part 831
is revised to read as follows:
■
Authority: 5 U.S.C. 8347; Sec. 831.102 also
issued under 5 U.S.C. 8334; Sec. 831.106 also
issued under 5 U.S.C. 552a; Sec. 831.108 also
issued under 5 U.S.C. 8336(d)(2); Sec.
831.114 also issued under 5 U.S.C.
8336(d)(2), and Sec. 1313(b)(5) of Pub. L.
107–296, 116 Stat. 2135; Sec. 831.201(b)(1)
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7. Amend § 831.303 by revising
paragraph (c)(1) to read as follows:
■
§ 831.303
Definitions.
*
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also issued under 5 U.S.C. 8347(g); Sec.
831.201(b)(6) also issued under 5 U.S.C.
7701(b)(2); Sec. 831.201(g) also issued under
Secs. 11202(f), 11232(e), and 11246(b) of Pub.
L. 105–33, 111 Stat. 251; Sec. 831.201(g) also
issued under Secs. 7(b) and (e) of Pub. L.
105–274, 112 Stat. 2419; Sec. 831.201(i) also
issued under Secs. 3 and 7(c) of Pub. L. 105–
274, 112 Stat. 2419; Sec. 831.204 also issued
under Sec. 102(e) of Pub. L. 104–8, 109 Stat.
102, as amended by Sec. 153 of Pub. L. 104–
134, 110 Stat. 1321; Sec. 831.205 also issued
under Sec. 2207 of Pub. L. 106–265, 114 Stat.
784; Sec. 831.206 also issued under Sec.
1622(b) of Pub. L. 104–106, 110 Stat. 515;
Sec. 831.301 also issued under Sec. 2203 of
Pub. L. 106–265, 114 Stat. 780; Sec. 831.303
also issued under 5 U.S.C. 8334(d)(2) and
Sec. 2203 of Pub. L. 106–235, 114 Stat. 780;
Sec. 831.502 also issued under 5 U.S.C. 8337,
and under Sec. 1(3), E.O. 11228, 3 CFR 1965–
1965 Comp. p. 317; Sec. 831.663 also issued
under 5 U.S.C. 8339(j) and (k)(2); Secs.
831.663 and 831.664 also issued under Sec.
11004(c)(2) of Pub. L. 103–66, 107 Stat. 412;
Sec. 831.682 also issued under Sec. 201(d) of
Pub. L. 99–251, 100 Stat. 23; Sec. 831.912
also issued under Sec. 636 of Appendix C to
Pub. L. 106–554, 114 Stat. 2763A–164;
Subpart P also issued under Sec. 535(d) of
Title V of Division E of Pub. L. 110–161, 121
Stat. 2042; Subpart Q also issued under 5
U.S.C. 8336a; Subpart V also issued under 5
U.S.C. 8343a and Sec. 6001 of Pub. L. 100–
203, 101 Stat. 1330–275; Sec. 831.2203 also
issued under Sec. 7001(a)(4) of Public Law
101–508, 104 Stat. 1388–328.
Sfmt 4702
Civilian service.
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(c)(1)(i) An employee or Member
whose retirement is based on a
separation before October 28, 2009, and
who has not completed payment of a
redeposit for refunded deductions based
on a period of service that ended before
October 1, 1990, will receive credit for
that service in computing the
nondisability annuity for which the
individual is eligible under subchapter
III of chapter 83 of title 5, United States
Code, provided the nondisability
annuity commences after December 1,
1990; and
(ii) An employee or Member whose
retirement is based on a separation on
or after October 28, 2009, and who has
not completed payment of a redeposit
for refunded deductions based on a
period of service that ended before
March 1, 1991, will receive credit for
that service in computing the
nondisability annuity for which the
individual is eligible under subchapter
III of chapter 83 of title 5, United States
Code.
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■ 8. Amend § 831.402 to revise the
definition of ‘‘applicant for retirement’’
and to add the definitions of ‘‘full
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retirement status’’, and ‘‘phased retiree’’
in alphabetical order as follows:
§ 831.402
Definitions.
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Applicant for retirement means a
person who is currently eligible to retire
under CSRS on an immediate or
deferred annuity, and who has filed an
application to retire, other than an
application for phased retirement status,
that has not been finally adjudicated.
* * *
Full retirement status means the
status of a phased retiree who has
ceased employment and is entitled,
upon application, to a composite
retirement annuity.
* * *
Phased retiree means a retirementeligible employee who—
(1) Has entered phased retirement
status under subpart Q of this part; and
(2) Has not entered full retirement
status.
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■ 9. Amend § 831.403 by revising
paragraph (a) to read as follows:
§ 831.403 Eligibility to make voluntary
contributions.
(a) Voluntary contributions may be
made only by—
(1) Employees (including phased
retirees) or Members currently subject to
CSRS, and
(2) Applicants for retirement,
including phased retirees who apply for
full retirement status under subpart Q of
this part.
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■ 10. Revise § 831.501 to read as
follows:
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§ 831.501
Time for filing application.
An employee or Member who is
eligible for retirement must file a
retirement application with his or her
agency. A former employee or Member
who is eligible for retirement must file
a retirement application with OPM. The
application should not be filed more
than 60 days before becoming eligible
for benefits. If the application is for
disability retirement, the applicant and
the employing agency should refer to
subpart L of this part. If the application
is for phased retirement status, the
employee and the employing agency
should refer to subpart Q of this part.
■ 11. Amend § 831.701 as follows:
■ a. Revise paragraph (a) introductory
text;
■ b. Redesignate paragraphs (d) through
(f) as paragraphs (e) through (g);
■ c. Add paragraph (d).
§ 831.701
Effective dates of annuities.
(a) Except as provided in paragraphs
(b) through (d) of this section, an
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annuity of an employee or Member
commences on the first day of the
month after—
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(d) A phased retirement annuity and
a composite retirement annuity granted
to an employee under section 8336a of
title 5, United States Code, and defined
under § 831.1702, commences as
provided in subpart Q of this part.
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■ 12. Amend § 831.703 to revise the
definition of ‘‘full-time service’’ in
paragraph (b) as follows:
§ 831.703 Computation of annuities for
part-time service.
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(b) * * *
Full-time service means service
performed by an employee who has—
(1) An officially established recurring
basic workweek consisting of 40 hours
within the employee’s administrative
workweek (as established under
§ 610.111 of this chapter or similar
authority);
(2) An officially established recurring
basic work requirement of 80 hours per
biweekly pay period (as established for
employees with a flexible or
compressed work schedule under 5
U.S.C. chapter 61, subchapter II, or
similar authority);
(3) For a firefighter covered by 5
U.S.C. 5545b(b) who does not have a 40hour basic workweek, a regular tour of
duty averaging at least 106 hours per
biweekly pay period; or
(4) A work schedule that is
considered to be full-time by express
provision of law, including a work
schedule established for certain nurses
under 38 U.S.C. 7456 or 7456A that is
considered by law to be a full-time
schedule for all purposes.
*
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■ 13. Add subpart Q to part 831 to read
as follows:
Subpart Q—Phased Retirement
Sec.
831.1701 Applicability and purpose.
831.1702 Definitions.
831.1703 Implementing directives.
Entering Phased Retirement
831.1711 Eligibility.
831.1712 Working percentage and officially
established hours for phased
employment.
831.1713 Application for phased
retirement.
831.1714 Effective date of phased
employment and phased retirement
annuity commencing date.
831.1715 Effect of phased retirement.
Returning to Regular Employment Status
831.1721 Ending phased retirement status
to return to regular employment status.
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33921
831.1722 Effective date of end of phased
retirement status to return to regular
employment status.
831.1723 Effect of ending phased
retirement status to return to regular
employment status.
Entering Full Retirement Status
831.1731 Application for full retirement
status.
831.1732 Commencing date of composite
retirement annuity.
Computation of Phased Retirement Annuity
at Phased Retirement and Composite
Retirement Annuity at Full Retirement
831.1741 Computation of phased retirement
annuity.
831.1742 Computation of composite
annuity at final retirement.
831.1743 Cost-of-living adjustments.
Opportunity of a Phased Retiree to Pay a
Deposit or Redeposit for Civilian or Military
Service
831.1751 Deposit for civilian service for
which no retirement deductions were
withheld and redeposit for civilian
service for which retirement deductions
were refunded to the individual.
831.1752 Deposit for military service.
831.1753 Civilian and military service of an
individual affected by an erroneous
retirement coverage determination.
Death Benefits
831.1761 Death of phased retiree during
phased employment.
831.1762 Death of an individual who has
separated from phased employment and
who dies before submitting an
application for a composite retirement
annuity.
831.1763 Lump-sum credit.
Reemployment After Separation From
Phased Retirement Status
831.1771 Reemployment of an individual
who has separated from phased
employment and who dies before
submitting an application for a
composite retirement annuity.
Mentoring
831.1781 Mentoring.
Subpart Q—Phased Retirement
§ 831.1701
Applicability and purpose.
This subpart contains the regulations
implementing provisions of 5 U.S.C.
8336a authorizing phased retirement.
This subpart establishes the eligibility
requirements for making an election to
enter phased retirement status, the
procedures for making an election, the
record-keeping requirements, and the
methods to be used for certain
computations not addressed elsewhere
in part 831.
§ 831.1702
Definitions.
In this subpart—
Authorized agency official means—
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(1) For the executive branch agencies,
the head of an Executive agency as
defined in 5 U.S.C. 105;
(2) For the legislative branch, the
Secretary of the Senate, the Clerk of the
House of Representatives, or the head of
any other legislative branch agency;
(3) For the judicial branch, the
Director of the Administrative Office of
the U.S. Courts;
(4) For the Postal Service, the
Postmaster General;
(5) For any other independent
establishment that is an entity of the
Federal Government, the head of the
establishment; or
(6) An official who is authorized to
act for an official named in paragraphs
(1) through (5) of this definition in the
matter concerned.
Composite retirement annuity means
the annuity computed when a phased
retiree attains full retirement status.
Director means the Director of the
Office of Personnel Management.
Full retirement status means that a
phased retiree has ceased employment
and is entitled, upon application, to a
composite retirement annuity.
Full-time means—
(1) An officially established recurring
basic workweek consisting of 40 hours
within the employee’s administrative
workweek (as established under
§ 610.111 of this chapter or similar
authority); or
(2) An officially established recurring
basic work requirement of 80 hours per
biweekly pay period (as established for
employees with a flexible or
compressed work schedule under 5
U.S.C. chapter 61, subchapter II, or
similar authority).
Phased employment means the lessthan-full-time employment of a phased
retiree.
Phased retiree means a retirementeligible employee who—
(1) With the concurrence of an
authorized agency official, enters
phased retirement status; and
(2) Has not entered full retirement
status.
Phased retirement annuity means the
annuity payable under 5 U.S.C. 8336a
before full retirement.
Phased retirement percentage means
the percentage which, when added to
the working percentage for a phased
retiree, produces a sum of 100 percent.
Phased retirement period means the
period beginning on the date on which
an individual becomes entitled to
receive a phased retirement annuity and
ending on the date on which the
individual dies or separates from
phased employment.
Phased retirement status means that a
phased retiree is concurrently employed
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in phased employment and eligible to
receive a phased retirement annuity.
Working percentage has the meaning
given that term in § 831.1712(a).
§ 831.1703
Implementing directives.
The Director may prescribe, in the
form he or she deems appropriate, such
detailed procedures as are necessary to
carry out the purpose of this subpart.
Entering Phased Retirement
§ 831.1711
Eligibility.
(a) A retirement-eligible employee, as
defined in paragraphs (b) and (c), may
elect to enter phased retirement status if
the employee has been employed on a
full-time basis for not less than the 3year period ending on the effective date
of phased retirement status, under
§ 831.1714(a).
(b) Except as provided in paragraph
(c) of this section, a retirement-eligible
employee means an employee who, if
separated from the service, would meet
the requirements for retirement under
subsection (a) or (b) of 5 U.S.C. 8336.
(c) A retirement-eligible employee
does not include—
(1) A member of the Capitol Police or
Supreme Court Police, or an employee
occupying a law enforcement officer,
firefighter, nuclear materials courier, air
traffic controller, or customs and border
protection officer position, except a
customs and border protection officer
who is exempt from mandatory
separation and retirement under 5
U.S.C. 8335 pursuant to section
535(e)(2)(A) of Division E of the
Consolidated Appropriations Act, 2008,
Public Law 110–161;
(2) An individual eligible to retire
under 5 U.S.C. 8336(c), (m), or (n); or
(3) An employee covered by a special
work schedule authority that does not
allow for a regularly recurring part-time
schedule, such as a firefighter covered
by 5 U.S.C. 5545b or a nurse covered by
38 U.S.C. 7456 or 7456A.
§ 831.1712 Working percentage and
officially established hours for phased
employment.
(a) For the purpose of this subpart,
working percentage means the
percentage of full-time equivalent
employment equal to the quotient
obtained by dividing—
(1) The number of officially
established hours per pay period to be
worked by a phased retiree, as described
in paragraph (b) of this section; by
(2) The number of hours per pay
period to be worked by an employee
serving in a comparable position on a
full-time basis.
(b) The number of officially
established hours per pay period to be
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worked by an employee in phased
retirement status must equal one-half
the number of hours the phased retiree
would have been scheduled to work had
the phased retiree remained in a fulltime work schedule and not elected to
enter phased retirement status. These
hours make up the officially established
part-time work schedule of the phased
retiree and exclude any additional hours
worked under § 831.1715(h).
§ 831.1713 Application for phased
retirement.
(a) To elect to enter phased retirement
status, a retirement-eligible employee
covered by § 831.1711 must—
(1) Submit to an authorized agency
official a written and signed request to
enter phased employment, on a form
prescribed by OPM;
(2) Obtain the signed written approval
of an authorized agency official to enter
phased employment; and
(3) File an application for phased
retirement, in accordance with
§ 831.104.
(b) Except as provided in paragraph
(c) of this section, an applicant for
phased retirement may withdraw his or
her application any time before the
election becomes effective, but not
thereafter.
(c) An applicant for phased retirement
may not withdraw his or her application
after OPM has received a certified copy
of a court order (under part 581 or part
838 of this chapter) affecting the
benefits.
(d) (1) An employee and an agency
approving official may agree to a time
limit to the employee’s period of phased
employment as a condition of approval
of the employee’s request to enter
phased employment and phased
retirement, or by mutual agreement after
the employee enters phased
employment status.
(2) To enter into such an agreement,
the employee and the approving official
must complete a written and signed
agreement.
(3) The written agreement must
include the following:
(i) The date the employee’s period of
phased employment will terminate;
(ii) A statement that the employee can
request the approving official’s
permission to return to regular
employment status at any time as
provided in § 831.1721; the agreement
must also explain how returning to
regular employment status would affect
the employee, as described in
§§ 831.1721 through 831.1723.
(iii) A statement that the employee
has a right to elect to fully retire at any
time as provided in § 831.1731;
(iv) A statement that the employee
may accept a new appointment at
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another agency, with or without the new
agency’s approval of phased
employment, at any time before the
expiration of the agreement or within 3
days of the expiration of the agreement;
the agreement must also explain how
accepting an appointment at a new
agency as a regular employee would
affect the employee, as described in
§§ 831.1721 through 831.1723;
(v) An explanation that when the
agreed term of phased employment
ends, the employee will be separated
from employment and that such
separation will be considered voluntary
based on the written agreement; and
(vi) An explanation that if the
employee is separated from phased
employment and is not employed
within 3 days (i.e., the employee has a
break in service of greater than 3 days),
the employee will be deemed to have
elected full retirement.
(4) The agency approving official and
the employee may rescind an existing
agreement, or enter into a new
agreement to extend or reduce the term
of phased employment agreed to in an
existing agreement, by entering into a
new written agreement meeting the
requirements of this paragraph, before
the expiration of the agreement
currently in effect.
§ 831.1714 Effective date of phased
employment and phased retirement annuity
commencing date.
(a) Phased employment is effective
the first day of the first pay period
beginning after phased employment is
approved by the authorized agency
official under § 831.1713(a), or the first
day of a later pay period specified by
the employee with an authorized agency
official’s concurrence.
(b) The commencing date of a phased
retirement annuity (i.e., the beginning
date of the phased retirement period) is
the first day of the first pay period
beginning after phased employment is
approved by an authorized agency
official under § 831.1713(a), or the first
day of a later pay period specified by
the employee with the authorized
agency official’s concurrence.
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§ 831.1715
Effect of phased retirement.
(a)(1) A phased retiree is deemed to be
a full-time employee for the purpose of
5 U.S.C. chapter 89 and 5 CFR part 890
(related to health benefits), as required
by 5 U.S.C. 8336a(i). The normal rules
governing health benefits premiums for
part-time employees in 5 U.S.C.
8906(b)(3) do not apply.
(2) A phased retiree is deemed to be
receiving basic pay at the rate applicable
to a full-time employee holding the
same position for the purpose of
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determining a phased retiree’s annual
rate of basic pay used in calculating
premiums (employee withholdings and
agency contributions) and benefits
under 5 U.S.C. chapter 87 and 5 CFR
part 870 (dealing with life insurance), as
required by 5 U.S.C. 8336a(n). The
deemed full-time schedule will consist
of five 8-hour workdays each workweek,
resulting in a 40-hour workweek. Only
basic pay for hours within the deemed
full-time schedule will be considered,
consistent with 5 U.S.C. 8336a(n) and
the definition of ‘‘full-time’’ in
§ 831.1702. Any premium pay creditable
as basic pay for life insurance purposes
under 5 CFR 870.204 for overtime work
or hours outside the full-time schedule
that an employee was receiving before
phased retirement, such as standby duty
pay under 5 U.S.C. 5545(c)(1) or
customs officer overtime pay under 19
U.S.C. 267(a), may not be considered in
determining a phased retiree’s deemed
annual rate of basic pay under this
paragraph.
(b) A phased retiree may not be
appointed to more than one position at
the same time.
(c) A phased retiree may move to
another position in the agency or
another agency during phased
retirement status only if the change
would not result in a change in the
working percentage. To move to another
agency during phased retirement status
and continue phased employment and
phased retirement status, the phased
retiree must submit a written and signed
request and obtain the signed written
approval, in accordance with
§ 831.1713(a)(1) and (2), of the
authorized agency official of the agency
to which the phased retiree is moving.
Notwithstanding the provisions of
§ 831.1714, if the authorized agency
official approves the request, the phased
retiree’s phased employment and
phased retirement status will continue
without interruption at the agency to
which the phased retiree moves. If the
authorized agency official at the agency
to which the phased retiree moves does
not approve the request, phased
employment and phased retirement
status terminates in accordance with
§ 831.1722(b).
(d) A phased retiree may be detailed
to another position or agency, subject to
5 CFR part 300, subpart C, if the
working percentage of the position to
which detailed is the same as the
working percentage of the phased
retiree’s position of record.
(e) A retirement-eligible employee
who makes an election under this
subpart may not elect an alternative
annuity under 5 U.S.C. 8343a.
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33923
(f) If the employee’s election of
phased retirement status becomes
effective, the employee is barred from
electing phased retirement status again.
Ending phased retirement status or
entering full retirement status does not
create a new opportunity for the
individual to elect phased retirement
status.
(g) Except as otherwise expressly
provided by law or regulation, a phased
retiree is treated as any other employee
on a part-time tour of duty for all other
purposes.
(h)(1) A phased retiree may not be
assigned hours of work in excess of the
officially established part-time schedule
(reflecting the working percentage),
except under the conditions specified in
paragraph (h)(2) of this section.
(2) An authorized agency official may
order or approve a phased retiree to
perform hours of work in excess of the
officially established part-time schedule
only in rare and exceptional
circumstances meeting all of the
following conditions:
(i) The work is necessary to respond
to an emergency posing a significant,
immediate, and direct threat to life or
property;
(ii) The authorized agency official
determines that no other qualified
employee is available to perform the
required work;
(iii) The phased retiree is relieved
from performing excess work as soon as
reasonably possible (e.g., by
management assignment of work to
other employees); and
(iv) When an emergency situation can
be anticipated in advance, agency
management made advance plans to
minimize any necessary excess work by
the phased retiree.
(3) Employing agencies must inform
each phased retiree and his or her
supervisor of—
(i) The limitations on hours worked in
excess of the officially established parttime schedule;
(ii) The requirement to maintain
records documenting that exceptions
met all required conditions;
(iii) The fact that, by law and
regulation, any basic pay received for
hours outside the employee’s officially
established part-time work schedule (as
described in § 831.1712(a)(1) and (b)) is
subject to retirement deductions and
agency contributions, in accordance
with 5 U.S.C. 8336a(d), but is not used
in computing retirement benefits; and
(iv) The fact that, by law and
regulation, any premium pay received
for overtime work or hours outside the
full-time schedule, that would
otherwise be basic pay for retirement,
such as customs officer overtime pay
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under 19 U.S.C. 267(a), will not be
subject to retirement deductions or
agency contributions, in accordance
with 5 U.S.C. 8336a(d), and that any
such premium pay received will not be
included in computing retirement
benefits.
(4) Employing agencies must maintain
records documenting that exceptions
granted under paragraph (h)(2) of this
section meet the required conditions.
These records must be retained for at
least 6 years and be readily available to
auditors. OPM may require periodic
agency reports on the granting of
exceptions and of any audit findings.
(5) If OPM finds that an agency (or
subcomponent) is granting exceptions
that are not in accordance with the
requirements of this paragraph (h), OPM
may administratively withdraw the
agency’s (or subcomponent’s) authority
to grant exceptions and require OPM
approval of any exception.
(6) If OPM finds that a phased retiree
has been working a significant amount
of excess hours beyond the officially
established part-time schedule to the
degree that the intent of the phased
retirement law is being undermined,
OPM may require that the agency end
the individual’s phased retirement by
unilateral action, notwithstanding the
normally established methods of ending
phased retirement. This finding does
not need to be based on a determination
that the granted exceptions failed to
meet the required conditions in
paragraph (h)(2) of this section. With the
ending of an individual’s phased
retirement, that individual must be
returned to regular employment status
on the same basis as a person making an
election under § 831.1721—unless that
individual elects to fully retire as
provided under § 831.1731.
(7) A phased retiree must be
compensated for excess hours of work
in accordance with the normally
applicable pay rules.
(8) Any premium pay received for
overtime work or hours outside the fulltime schedule that would otherwise be
basic pay for retirement, such as
customs officer overtime pay under 19
U.S.C. 267(a), is not subject to
retirement deductions or agency
contributions, in accordance with 5
U.S.C. 8336a(d).
(i) A phased retiree is deemed to be
an annuitant for the purpose of subpart
S of this part.
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Returning to Regular Employment
Status
§ 831.1721 Ending phased retirement
status to return to regular employment
status.
(a) Election to end phased retirement
status to return to regular employment
status. (1) A phased retiree may elect,
with the permission of an authorized
agency official, to end phased
employment at any time to return to
regular employment status. The election
is deemed to meet the requirements of
5 U.S.C. 8336a(g) regardless of the
employee’s work schedule. The
employee is not subject to any working
percentage limitation (i.e., full-time, 50
percent of full-time, or any other
working percentage) upon electing to
end phased retirement status.
(2) To elect to end phased retirement
status to return to regular employment
status, a phased retiree must—
(i) Submit to the authorized agency
official, on a form prescribed by OPM,
a written and signed request to end
phased retirement status to return to
regular employment status; and
(ii) Obtain the signed written approval
of the authorized agency official for the
request.
(3) An employee may cancel an
approved election to end phased
retirement status to return to regular
employment status by submitting a
signed written request to the agency and
obtaining the approval of an authorized
agency official before the effective date
of return to regular employment status.
(4) The employing agency must notify
OPM that the employee’s phased
retirement status has ended by
submitting to OPM a copy of the
completed election to end phased
retirement status to return to regular
employment status within 15 days of its
approval.
(b) Mandated return to regular
employment status. A phased retiree
may be returned to regular employment
status as provided under
§ 831.1715(h)(6).
(c) Bar on reelection of phased
retirement. Once an election to end
phased retirement status to return to
regular employment status is effective,
the employee may not reelect phased
retirement status.
§ 831.1722 Effective date of end of phased
retirement status to return to regular
employment status.
(a) (1) Except as provided in
paragraph (b) of this section, if a request
to end phased retirement status to
return to regular employment status is
approved by an authorized agency
official under § 831.1721 on any date on
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or after the first day of a month through
the fifteenth day of a month, the phased
retiree’s resumption of regular
employment status is effective the first
day of the first full pay period of the
month following the month in which
the election to end phased retirement
status to return to regular employment
status is approved.
(2) If a request to end phased
retirement status to return to regular
employment status is approved by an
authorized agency official under
§ 831.1721 on any date on or after the
sixteenth day of a month through the
last day of a month, the phased retiree’s
resumption of regular employment
status is effective on the first day of the
first full pay period of the second month
following the month in which the
election to end phased retirement status
to return to regular employment status
is approved.
(3) The phased retirement annuity
terminates on the date determined
under paragraph (a)(1) or (2) of this
section.
(b) When a phased retiree moves from
the agency that approved his or her
phased employment and phased
retirement status to another agency and
the authorizing official at the agency to
which the phased retiree moves does
not approve a continuation of phased
employment and phased retirement
status, phased employment and phased
retirement status terminates when
employment ends at the current
employing agency.
§ 831.1723 Effect of ending phased
retirement status to return to regular
employment status.
(a) After phased retirement status
ends under § 831.1722, the employee’s
rights under subchapter III of chapter 83
or chapter 84 of title 5, United States
Code, are determined based on the law
in effect at the time of any subsequent
separation from service.
(b) After an individual ends phased
retirement status to return to regular
employment status, for the purposes of
subchapter III of chapter 83 or chapter
84 of title 5, United States Code, at the
time of the subsequent separation from
service, the phased retirement period
will be treated as if it had been a period
of part-time employment with the work
schedule described in § 831.1712(a)(1)
and (b). The part-time proration
adjustment for the phased retirement
period will be based upon the
individual’s officially established parttime work schedule, with no credit for
extra hours worked. In determining the
individual’s deemed rate of basic pay
during the phased retirement period,
only basic pay for hours within the
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individual’s officially established parttime work schedule may be considered.
No pay received for other hours during
the phased retirement period may be
included as part of basic pay for the
purpose of computing retirement
benefits, notwithstanding the normally
applicable rules.
(c) The restrictions in §§ 831.1751 and
831.1752 regarding when an individual
must complete a deposit for civilian
service, a redeposit for civilian service
that ended on or after March 1, 1991, or
a deposit for military service do not
apply when a phased retiree ends
phased retirement status to return to
regular employment status under this
section.
(d) When a phased retiree whose
phased retirement annuity was subject
to an actuarial reduction for unpaid
redeposit service, in accordance with
§ 831.303(c) and (d), ends phased
retirement status to return to regular
employment status, the annuity the
individual becomes entitled to at
retirement is subject to the actuarial
reduction, increased by cost-of-living
adjustments under § 831.1743(d). For
the purpose of applying the provisions
of § 831.1743(d) under this paragraph,
cost-of-living adjustments are applied
through the annuity commencing date.
Entering Full Retirement Status
TKELLEY on DSK3SPTVN1PROD with PROPOSALS2
§ 831.1731
status.
Application for full retirement
(a) Election of full retirement. (1) A
phased retiree may elect to enter full
retirement status at any time by
submitting to OPM an application for
full retirement in accordance with
§ 831.104. This includes an election
made under § 831.1715(h)(6) in lieu of
a mandated return to regular
employment status. Upon making such
an election, a phased retiree is entitled
to a composite retirement annuity.
(2) A phased retiree may cancel an
election of full retirement status and
withdraw an application for full
retirement by submitting a signed
written request with the agency and
obtaining the approval of an authorized
agency official before the commencing
date of the composite retirement
annuity.
(b) Deemed election of full retirement.
A phased retiree who is separated from
phased employment for more than 3
days enters full retirement status. The
individual’s composite retirement
annuity will begin to accrue on the
commencing date of the composite
annuity as provided in § 831.1732, and
payment will be made after he or she
submits an application in accordance
with § 831.104 for the composite
retirement annuity.
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(c) Survivor election provisions. An
individual applying for full retirement
status under this section is subject to the
survivor election provisions of subpart F
of this part.
§ 831.1732 Commencing date of
composite retirement annuity.
(a) The commencing date of the
composite retirement annuity of a
phased retiree who enters full
retirement status is the day after
separation.
(b) A phased retirement annuity
terminates upon separation from
service.
Computation of Phased Retirement
Annuity at Phased Retirement and
Composite Retirement Annuity at Full
Retirement
§ 831.1741 Computation of phased
retirement annuity.
(a) Subject to adjustments described
in paragraphs (b) and (c) of this section,
a phased retiree’s phased retirement
annuity equals the product obtained by
multiplying—
(1) The amount of annuity computed
under 5 U.S.C. 8339, including any
reduction for any unpaid deposit for
non-deduction service performed before
October 1, 1982, but excluding
reduction for survivor annuity, 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 5 U.S.C.
8336(a) or (b); by
(2) The phased retirement percentage
for the phased retiree.
(b)(1) The monthly installment of
annuity derived from the computation
of the annuity under paragraph (a) of
this section is reduced by any actuarial
reduction for unpaid redeposit service
in accordance with § 831.303(c) and (d).
(2) For the purpose of applying
§ 831.303(c) and (d) in paragraph (b)(1)
of this section, the term ‘‘time of
retirement’’ in § 831.303(c)(2) and
(d)(2)(i) means the commencing date of
the phased retiree’s phased retirement
annuity.
(c) The monthly installment of
annuity derived from the computation
of the annuity under paragraph (a) of
this section is also subject to any offset
under § 831.1005, adjusted by
multiplying the offset that would
otherwise apply had the phased retiree
fully retired under 5 U.S.C. 8336(a) or
(b) by the phased retirement percentage.
§ 831.1742 Computation of composite
annuity at final retirement.
(a) Subject to the adjustment
described in paragraph (c) of this
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33925
section, a phased retiree’s composite
retirement annuity at final retirement
equals the sum obtained by adding—
(1) The amount computed under
§ 831.1741(a) without adjustment under
§ 831.1741(b) and (c), increased by costof-living adjustments under
§ 831.1743(c); and
(2) The ‘‘fully retired phased
component’’ computed under paragraph
(b) of this section.
(b)(1) Subject to the requirements
described in paragraphs (b)(2) and (b)(3)
of this section, a ‘‘fully retired phased
component’’ equals the product
obtained by multiplying—
(i) The working percentage; by
(ii) The amount of an annuity
computed under 5 U.S.C. 8339 that
would have been payable at the time of
full retirement if the individual had not
elected phased retirement status and as
if the individual was employed on a
full-time basis in the position occupied
during the phased retirement period and
before any reduction for survivor
annuity.
(2) In applying paragraph (b)(1)(ii) of
this section, the individual must be
deemed to have a full-time schedule
during the period of phased retirement.
The deemed full-time schedule will
consist of five 8-hour workdays each
workweek, resulting in a 40-hour
workweek. In determining the
individual’s deemed rate of basic pay
during phased retirement, only basic
pay for hours within the deemed fulltime schedule will be considered,
consistent with the definition of ‘‘fulltime’’ in § 831.1702. Any premium pay
creditable as basic pay for retirement
purposes for overtime work or hours
outside the full-time schedule that an
employee was receiving before phased
retirement, such as standby duty pay
under 5 U.S.C. 5545(c)(1) or customs
officer overtime pay under 19 U.S.C.
267(a), may not be considered in
determining a phased retiree’s deemed
rate of basic pay during phased
retirement.
(3) In computing the annuity amount
under paragraph (b)(1) of this section—
(i) The amount of unused sick leave
equals the result of dividing the days of
unused sick leave to the individual’s
credit at separation for full retirement
by the working percentage; and
(ii) The reduction for any unpaid
deposit for non-deduction service
performed before October 1, 1982, is
based on the amount of unpaid deposit,
with interest computed to the
commencing date of the composite
annuity.
(c) The composite retirement annuity
computed under paragraph (a) of this
section is adjusted by applying any
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reduction for any survivor annuity
benefit.
(d) The monthly installment derived
from a composite retirement annuity
computed under paragraph (a) of this
section and adjusted under paragraph
(c) is adjusted by any—
(1) Actuarial reduction applied to the
phased retirement annuity under
§ 831.1741(b), increased by cost-ofliving adjustments under § 831.1743(d);
and
(2) Offset under § 831.1005 (i.e., the
offset based on all service, including
service during the phased retirement
period, performed by the individual that
was subject to mandatory Social
Security coverage).
TKELLEY on DSK3SPTVN1PROD with PROPOSALS2
§ 831.1743
Cost-of-living adjustments.
(a) The phased retirement annuity
under § 831.1741 is increased by cost-ofliving adjustments in accordance with 5
U.S.C. 8340.
(b) A composite retirement annuity
under § 831.1742 is increased by cost-ofliving adjustments in accordance with 5
U.S.C. 8340, except that 5 U.S.C.
8340(c)(1) does not apply.
(c)(1) For the purpose of computing
the amount of phased retirement
annuity used in the computation under
§ 831.1742(a)(1), the initial cost-of-living
adjustment applied is prorated in
accordance with 5 U.S.C. 8340(c)(1).
(2) If the individual enters full
retirement status on the same day as the
effective date of a cost-of-living
adjustment (usually December 1st), that
cost-of-living adjustment is applied to
increase the phased retirement annuity
used in the computation under
§ 831.1742(a)(1).
(d)(1) For the purpose of computing
the actuarial reduction used in the
computation under § 831.1742(d)(1), the
initial cost-of-living adjustment applied
is prorated in accordance with 5 U.S.C.
8340(c)(1).
(2) If the individual enters full
retirement status on the same day as the
effective date of a cost-of-living
adjustment (usually December 1st), that
cost-of-living adjustment is applied to
increase the actuarial reduction used in
the computation under § 831.1742(d)(1).
(3) When applying each cost-of-living
adjustment to the actuarial reduction
used in the computation under
§ 831.1742(d)(1), the actuarial reduction
is rounded up to the next highest dollar.
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Opportunity of a Phased Retiree To Pay
a Deposit or Redeposit for Civilian or
Military Service
§ 831.1751 Deposit for civilian service for
which no retirement deductions were
withheld and redeposit for civilian service
for which retirement deductions were
refunded to the individual.
(a)(1) Any deposit an employee
entering phased retirement status
wishes to make for civilian service for
which no retirement deductions were
withheld (i.e., ‘‘non-deduction’’ service)
must be paid within 30 days from the
date OPM notifies the employee of the
amount of the deposit, during the
processing of the employee’s
application for phased retirement. The
deposit amount will include interest
under § 831.105, computed to the
effective date of phased retirement.
(2) No deposit payment may be made
by the phased retiree when entering full
retirement status.
(3) As provided under
§ 831.1741(a)(1), for the computation of
phased retirement annuity, the amount
of any unpaid deposit for non-deduction
service performed before October 1,
1982, including interest computed to
the effective date of phased retirement
annuity, will be the basis for reduction
of the phased retirement annuity for
such unpaid deposit.
(4) As provided under
§ 831.1742(b)(2), the amount of any
unpaid deposit for non-deduction
service performed before October 1,
1982, including interest computed to
the commencing date of the composite
annuity, will be the basis for reduction
of the ‘‘fully retired phased component’’
for such unpaid deposit.
(b)(1) Any redeposit an employee
entering phased retirement status
wishes to make for civilian service for
which retirement deductions were
refunded to the employee must be paid
within 30 days from the date OPM
notifies the employee of the amount of
the redeposit, during the processing of
the employee’s application for phased
retirement. The redeposit amount will
include interest under § 831.105
computed to the effective date of phased
retirement.
(2) No redeposit payment may be
made by the phased retiree when
entering full retirement status.
(3) As provided under § 831.1741(b),
for the computation of monthly
installment of phased retirement
annuity, the amount of any unpaid
redeposit at phased retirement, or
unpaid balance thereof, including
interest computed to the effective date
of phased retirement, will be the basis,
along with the phased retiree’s age, for
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any actuarial reduction of the monthly
installment of phased retirement
annuity for such unpaid redeposit.
(4) As provided under
§ 831.1742(d)(1), any actuarial reduction
for unpaid redeposit service applied to
the monthly installment of phased
retirement annuity, as described in
paragraph (b)(3) of this section and
§ 831.1741(b), is increased by cost-ofliving adjustments and applied to the
monthly installment derived from the
composite retirement annuity.
§ 831.1752
Deposit for military service.
(a) A phased retiree who wishes to
make a military service credit deposit
under § 831.2104(a) for military service
performed prior to entering phased
retirement status must complete such a
deposit no later than the day before the
effective date of his or her phased
employment and the commencing date
of the phased retirement annuity. A
military service credit deposit for
military service performed prior to an
individual’s entry into phased
retirement status cannot be made after
the effective date of phased employment
and the commencing date of phased
retirement annuity.
(b) A phased retiree who wishes to
make a military service credit deposit
under § 831.2104(a) for military service
performed after the effective date of
phased employment and the
commencing date of the phased
retirement annuity and before the
effective date of the composite
retirement annuity (e.g., due to the callup of the employee for active military
service) must complete such a deposit
no later than the day before the effective
date of his or her composite retirement
annuity.
§ 831.1753 Civilian and military service of
an individual affected by an erroneous
retirement coverage determination.
(a) For the purpose of crediting
service for which actuarial reduction of
annuity is permitted under § 831.303(d)
for an employee who enters phased
retirement, the deposit amounts under
§ 831.303(d) form the basis, along with
the phased retiree’s age, for any
actuarial reduction of the phased
retirement annuity for such unpaid
deposits.
(b) No deposit payment for service
described under § 831.303(d) may be
made by the phased retiree when
entering full retirement status.
(c) As provided under § 831.1741(b),
the amount of any deposit under
§ 831.303(d) at the commencing date of
the individual’s phased retirement
annuity, or unpaid balance thereof,
including interest computed to the
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effective date of phased retirement
annuity, will be the basis, along with
the phased retiree’s age, for any
actuarial reduction of the phased
retirement annuity for such unpaid
deposit.
(d) As provided under
§ 831.1742(d)(1), any actuarial reduction
for any unpaid deposit service under
§ 831.303(d) applied to the phased
retirement annuity, as described in
§ 831.1741(b), is increased by cost-ofliving adjustments and applied to the
monthly installment derived from the
composite retirement annuity.
Death Benefits
(b) Unless an individual described in
paragraph (a) of this section was
reemployed with the Federal
Government after separating from
phased employment, the composite
retirement annuity of an individual
described in paragraph (a) of this
section is deemed to have accrued from
the day after separation through the date
of death. Any composite annuity
accrued during such period of time,
minus any phased annuity paid during
that period, will be paid as a lump-sum
payment of accrued and unpaid
annuity, in accordance with 5 U.S.C.
8342(c) and (f).
§ 831.1763
§ 831.1761 Death of phased retiree during
phased employment.
TKELLEY on DSK3SPTVN1PROD with PROPOSALS2
(a) For the purpose of 5 U.S.C. 8341—
(1) The death of a phased retiree is
deemed to be a death in service of an
employee; and
(2) The phased retirement period is
deemed to have been a period of parttime employment with the work
schedule described in § 831.1712(a)(1)
and (b) for the purpose of determining
survivor benefits. The part-time
proration adjustment for the phased
retirement period will be based upon
the employee’s officially established
part-time work schedule, with no credit
for extra hours worked. In determining
the employee’s deemed rate of basic pay
during the phased retirement period,
only basic pay for hours within the
employee’s officially established parttime work schedule may be considered.
No pay received for other hours during
the phased retirement period may be
included as part of basic pay for the
purpose of computing retirement
benefits, notwithstanding the normally
applicable rules.
(b) If a phased retiree elects not to
make a deposit described in 5 U.S.C.
8334(d)(1), such that his or her annuity
is actuarially reduced under 5 U.S.C.
8334(d)(2) and § 831.1741(b), and that
individual dies in service as a phased
retiree, the amount of any deposit upon
which such actuarial reduction was to
have been based will be deemed to have
been fully paid.
§ 831.1762 Death of an individual who has
separated from phased employment and
who dies before submitting an application
for a composite retirement annuity.
(a) For the purpose of 5 U.S.C. 8341,
an individual who dies after separating
from phased employment and before
submitting an application for composite
retirement annuity is deemed to have
filed an application for full retirement
status, and composite retirement
annuity, with OPM.
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Lump-sum credit.
If an individual performs phased
employment, the lump-sum credit will
be reduced by any annuity that is paid
or accrued during phased employment.
Reemployment After Separation From
Phased Retirement Status
§ 831.1771 Reemployment of an individual
who has separated from phased
employment and who dies before
submitting an application for a composite
retirement annuity.
(a) Unless eligibility for annuity
terminates under 5 U.S.C. 8344, a
phased retiree who has been separated
from employment for more than 3 days
and who has entered full retirement
status, but who has not submitted an
application for composite retirement
annuity, is deemed to be an annuitant
receiving annuity from the Civil Service
Retirement and Disability Fund during
any period of employment in an
appointive or elective position in the
Federal Government.
(b) A phased retiree described in
paragraph (a) of this section whose
entitlement to a composite retirement
annuity terminates under 5 U.S.C. 8344
due to the employment, is an employee
effective upon employment. The
individual is not entitled to a phased
retirement annuity (i.e., phased
retirement annuity does not resume)
during the period of employment, and
the individual’s entitlement to a
composite retirement annuity
terminates effective on the date of
employment.
Mentoring
§ 831.1781
Mentoring.
(a) A phased retiree, other than an
employee of the United States Postal
Service, must spend at least 20 percent
of his or her working hours in
mentoring activities as defined by an
authorized agency official. For purposes
of this section, mentoring need not be
limited to mentoring of an employee
who is expected to assume the phased
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retiree’s duties when the phased retiree
fully retires.
(b) An authorized agency official may
waive the requirement under paragraph
(a) of this section in the event of an
emergency or other unusual
circumstances (including active duty in
the armed forces) that, in the authorized
agency official’s discretion, would make
it impracticable for a phased retiree to
fulfill the mentoring requirement.
PART 838—COURT ORDERS
AFFECTING RETIREMENT BENEFITS
14. The authority citation for part 838
continues to read as follows:
■
Authority: 5 U.S.C. 8347(a) and 8461(g).
Subparts B, C, D, E, J, and K also issued
under 5 U.S.C. 8345(j)(2) and 8467(b).
Sections 838.221, 838.422, and 838.721 also
issued under 5 U.S.C. 8347(b).
15. Amend § 838.103 as follows:
a. Revise the definitions of
‘‘employee’’, ‘‘employee annuity’’,
‘‘gross annuity’’, ‘‘net annuity’’,
‘‘retiree’’, and ‘‘self-only annuity’’;
■ b. Add the definitions of ‘‘composite
retirement annuity’’, ‘‘full retirement’’,
‘‘phased employment’’, ‘‘phased
retiree’’, ‘‘phased retirement annuity’’,
‘‘phased retirement status,’’
‘‘retirement’’ and ‘‘retires’’ in
alphabetical order.
■
■
§ 838.103
Definitions.
*
*
*
*
*
Composite retirement annuity means
the annuity computed when a phased
retiree attains full retirement status.
*
*
*
*
*
Employee means an employee or
Member covered by CSRS or FERS and
a phased retiree as defined under this
part.
Employee annuity means the
recurring payments under CSRS or
FERS made to a retiree, the recurring
phased retirement annuity payments
under CSRS or FERS made to a phased
retiree in phased retirement status, and
recurring composite retirement annuity
payments under CSRS or FERS made to
a phased retiree when he or she attains
full retirement status. Employee annuity
does not include payments of accrued
and unpaid annuity after the death of a
retiree or phased retiree under 5 U.S.C.
8342(g) or 8424(h).
*
*
*
*
*
Full retirement status means that a
phased retiree has ceased employment
and is entitled, upon application, to a
composite retirement annuity, as
provided under subpart Q of 5 CFR part
831 or 5 CFR part 848.
Gross annuity means the amount of
monthly annuity payable to a retiree or
phased retiree after reducing the self-
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only annuity to provide survivor
annuity benefits, if any, but before any
other deduction. Unless the court order
expressly provides otherwise, gross
annuity also includes any lump-sum
payments made to the retiree under 5
U.S.C. 8343a or 8420a.
*
*
*
*
*
Net annuity. (1) Net annuity means
the amount of monthly annuity payable
to a retiree or phased retiree after
deducting from the gross annuity any
amounts that are—
(i) Owed by the retiree to the United
States;
(ii) Deducted for health benefits
premiums under 5 U.S.C. 8906 and 5
CFR 891.401 and 891.402;
(iii) Deducted for life insurance
premiums under 5 U.S.C. 8714a(d);
(iv) Deducted for Medicare premiums;
(v) Properly withheld for Federal
income tax purposes, if the amounts
withheld are not greater than they
would be if the retiree claimed all
dependents he or she was entitled to
claim;
(vi) Properly withheld for State
income tax purposes, if the amounts
withheld are not greater than they
would be if the retiree claimed all
dependents he or she was entitled to
claim; or
(vii) Already payable to another
person based on a court order
acceptable for processing or a child
abuse judgment enforcement order.
(2) Unless the court order expressly
provides otherwise, net annuity also
includes any lump-sum payments made
to the retiree under 5 U.S.C. 8343a or
8420a.
Phased employment means the lessthan-full-time employment of a phased
retiree, as provided under 5 CFR part
831, subpart Q, or part 848.
Phased retiree. (1) Phased retiree
means a retirement-eligible employee
who—
(i) With the concurrence of an
authorized agency official, enters
phased retirement status in accordance
with 5 CFR part 831, subpart Q, or part
848; and
(ii) Has not entered full retirement
status;
(2) For the purpose of this part, when
the term employee is used it also refers
to a phased retiree.
Phased retirement annuity means the
annuity payable under 5 U.S.C. 8336a or
8412a, and 5 CFR part 831, subpart Q,
or part 848, before full retirement.
Phased retirement status means that a
phased retiree is concurrently employed
in phased employment and eligible to
receive a phased retirement annuity.
*
*
*
*
*
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Retiree means a former employee,
including a phased retiree who has
entered full retirement status, or a
Member who is receiving recurring
payments under CSRS or FERS based on
his or her service as an employee or
Member. Retiree does not include an
employee receiving a phased retirement
annuity or a person receiving an annuity
only as a current spouse, former spouse,
child, or person with an insurable
interest.
Retirement means a retirement other
than a phased retirement.
Retires means enters retirement other
than a phased retirement.
Self-only annuity means the recurring
unreduced payments under CSRS or
FERS to a retiree with no survivor
annuity payable to anyone. Self-only
annuity also includes the recurring
unreduced phased retirement annuity
payments under CSRS or FERS to a
phased retiree before any other
deduction. Unless the court order
expressly provides otherwise, self-only
annuity also includes any lump-sum
payments made to the retiree under 5
U.S.C. 8343a or 8420a.
*
*
*
*
*
§ 838.136
[Removed]
16. Remove § 838.136.
17. Amend § 838.211 by revising
paragraph (a)(1) introductory text,
redesignating paragraph (b) as paragraph
(a)(4), and by adding a new paragraph
(b) to read as follows:
■
■
§ 838.211
orders.
Amounts subject to court
(a)(1) Employee annuities other than
phased retirement annuities are subject
to court orders acceptable for processing
only if all of the conditions necessary
for payment of the employee annuity to
the former employee have been met,
including, but not limited to—
*
*
*
*
*
(b)(1) Phased retirement annuities are
subject to court orders acceptable for
processing only if all of the conditions
necessary for payment of the phased
retirement annuity to the phased retiree
have been met, including, but not
limited to—
(i) Entry of the employee into phased
retirement status under 5 CFR part 831,
subpart Q, or part 848 of this chapter,
respectively;
(ii) Application for payment of the
phased retirement annuity by the
phased retiree; and
(iii) The phased retiree’s entitlement
to a phased retirement annuity.
(2) Money held by an employing
agency or OPM that may be payable at
some future date is not available for
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payment under court orders directed at
phased retirement annuities.
(3) OPM cannot pay a former spouse
a portion of a phased retirement annuity
before the employee annuity begins to
accrue.
(4) Payment to a former spouse under
a court order may not exceed the phased
retirement annuity.
*
*
*
*
*
■ 18. Amend § 838.222 by revising
paragraph (a)(2) introductory text and
paragraphs (b), (c)(1)(ii) and (c)(2)
introductory text, and paragraph (d)
introductory text to read as follows:
§ 838.222 OPM action on receipt of a court
order acceptable for processing.
(a) * * *
(2) The retiree or phased retiree—
*
*
*
*
*
(b) If OPM receives a court order
acceptable for processing that is
directed at an employee annuity but the
employee has died, or if a retiree or
phased retiree dies after payments from
the retiree or phased retiree to a former
spouse have begun, OPM will inform
the former spouse that the employee, or
retiree, or phased retiree has died and
that OPM can only honor court orders
dividing employee annuities during the
lifetime of the retiree or phased retiree.
(c) * * *
(1) * * *
(ii) That benefits cannot begin to
accrue until the employee retires, or
enters phased retirement status; * * *
(2) The employee, separated
employee, retiree, or phased retiree—
*
*
*
*
*
(d) The failure of OPM to provide, or
of the employee, separated employee,
retiree, phased retiree or the former
spouse to receive, the information
specified in this section prior to the
commencing date of a reduction or
accrual does not affect—
*
*
*
*
*
■ 19. Revise § 838.232 to read as
follows:
§ 838.232
Suspension of payments.
(a) Payments from employee annuities
under this part will be discontinued
whenever the employee annuity
payments are suspended or terminated.
If employee annuity payments to the
retiree or phased retiree are restored,
payments to the former spouse will also
resume, subject to the terms of any court
order acceptable for processing in effect
at that time.
(b) Paragraph (a) of this section will
not be applied to permit a retiree or
phased retiree to deprive a former
spouse of payment by causing
suspension of payment of employee
annuity.
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20. Amend § 838.233 by revising
paragraph (d) to read as follows:
§ 838.306 Specifying type of annuity for
application of formula, percentage or
fraction.
§ 838.233
(a) A court order directed at an
employee annuity that states the former
spouse’s share of employee annuity as a
formula, percentage, or fraction is not a
court order acceptable for processing
unless OPM can determine the type of
annuity (i.e., phased retirement annuity,
composite retirement annuity, net
annuity, gross annuity, or self-only
annuity) on which to apply the formula,
percentage, or fraction.
(b) The standard types of annuity to
which OPM can apply the formula,
percentage, or fraction are phased
retirement annuity of a phased retiree,
or net annuity, gross annuity, or selfonly annuity of a retiree. Unless the
court order otherwise directs, OPM will
apply to gross annuity the formula,
percentage, or fraction directed at
annuity payable to either a retiree or a
phased retiree. Section 838.625 contains
information on other methods of
describing these types of annuity.
(c)(1) A court order may include
provisions directed at:
(i) Phased retirement annuity payable
to a phased retiree, to address the
possibility that an employee will enter
phased retirement status;
(ii) Composite retirement annuity
payable to a phased retiree at entry into
full retirement status, to address the
possibility that an employee will enter
phased retirement status and then enter
full retirement status; and
(iii) Annuity payable to an employee
who retires without having elected
phased retirement status.
(2) To separately provide for division
of phased retirement annuity or
composite retirement annuity, a
provision of a court order must
expressly state that it is directed at
‘‘phased retirement annuity’’ or
‘‘composite retirement annuity,’’ and
must meet the requirements of
paragraph (a) of this section. That is, it
must state the type of annuity to be
divided (e.g., ‘‘net phased retirement
annuity’’). If such a provision is unclear
as to whether it is directed at gross, net,
or self-only phased retirement annuity
or composite retirement annuity, the
provision will be applied to gross
phased retirement annuity or gross
composite retirement annuity, as
described in paragraph (b) of this
section.
(3) Unless a court order expressly
states that phased retirement annuity or
composite retirement annuity is not to
be divided, a court order meeting the
requirements of paragraph (a) of this
section and that generally provides for
division of annuity, without meeting the
■
Termination of payments.
*
*
*
*
*
(d) The last day of the month
immediately preceding the month in
which the retiree or phased retiree dies;
or
*
*
*
*
*
■ 21. Amend § 838.237 by revising
paragraphs (a) and (b)(4) to read as
follows:
§ 838.237
Death of the former spouse.
(a) Unless the court order acceptable
for processing expressly provides
otherwise, the former spouse’s share of
an employee annuity terminates on the
last day of the month immediately
preceding the death of the former
spouse, and the former spouse’s share of
employee annuity reverts to the retiree
or phased retiree.
(b) * * *
(4) One or more of the retiree’s or
phased retiree’s children as defined in
5 U.S.C. 8342(c) or 8424(d).
■ 22. Amend § 838.242 by revising
paragraph (b) to read as follows:
§ 838.242
Computing length of service.
*
*
*
*
*
(b) Unused sick leave is counted as
‘‘creditable service’’ on the date of
separation for an immediate CSRS
annuity. The unused sick leave of a
phased retiree is counted as ‘‘creditable
service’’ on the date of separation of the
phased retiree to enter full retirement
status. Unused sick leave is not
apportioned over the time when earned.
■ 23. Amend § 838.305 by revising
paragraph (e) introductory text to read
as follows:
§ 838.305
OPM computation of formulas.
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*
*
*
*
*
(e) A court order directed at employee
annuity is not a court order acceptable
for processing if the court order directs
OPM to determine a rate of employee
annuity that would require OPM to
determine a salary or average salary,
other than a salary or average salary
actually used in computing the
employee annuity, as of a date prior to
the date of the employee’s entry into
phased retirement or separation and to
adjust that salary for use in computing
the former spouse share unless the
adjustment is by—
*
*
*
*
*
■ 24. Revise § 838.306 to read as
follows:
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requirements of paragraph (c)(2) of this
section, regarding the specific type of
annuity being divided, will be applied
to divide any employee annuity,
including phased retirement annuity
and composite retirement annuity.
■ 25. Revise § 838.612 to read as
follows:
§ 838.612 Distinguishing between
annuities and contributions.
(a) A court order that uses terms such
as ‘‘annuities,’’ ‘‘pensions,’’ ‘‘retirement
benefits,’’ or similar terms, without
distinguishing between phased
retirement annuity payable to a phased
retiree, or composite retirement annuity
payable to a phased retiree upon entry
into full retirement status, and
employee annuity payable to a retiree,
satisfies the requirements of
§§ 838.303(b)(2) and 838.502(b)(2) for
purposes of dividing any employee
annuity or a refund of employee
contributions.
(b)(1) A court order using
‘‘contributions,’’ ‘‘deductions,’’
‘‘deposits,’’ ‘‘retirement accounts,’’
‘‘retirement fund,’’ or similar terms
satisfies the requirements of
§ 838.502(b)(2) and may be used only to
divide the amount of contributions that
the employee has paid into the Civil
Service Retirement and Disability Fund.
(2) Unless the court order specifically
states otherwise, when an employee
annuity is payable, a court order using
the terms specified in paragraph (b)(1)
of this section satisfies the requirements
of § 838.303(b)(2) and awards the former
spouse a benefit to be paid in equal
monthly installments at 50 percent of
the gross annuity beginning on the date
the employee annuity commences or the
date of the court order, whichever
comes later, until the specific dollar
amount is reached.
■ 26. Amend § 838.621 by revising
paragraphs (a) and (c) to read as follows:
§ 838.621
Pro rata share.
(a) Pro rata share means one-half of
the fraction whose numerator is the
number of months of Federal civilian
and military service that the employee
performed during the marriage and
whose denominator is the total number
of months of Federal civilian and
military service performed by the
employee through the day before the
effective date of phased retirement or
separation for retirement, as applicable
to the annuity calculation. In the
computation of the division of phased
retirement annuity and a composite
retirement annuity, a pro rata share will
be computed through the day before the
effective date of an employee’s phased
retirement for the computation of the
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division of a phased retirement annuity
and then recomputed for division of the
composite retirement annuity under
§ 831.1742 and § 848.502.
*
*
*
*
*
(c) A court order that awards a portion
of an employee annuity as of a specified
date before the employee’s phased
retirement or retirement awards the
former spouse a pro rata share as
defined in paragraph (a) of this section.
*
*
*
*
*
■ 27. Amend § 838.622 by revising
paragraphs (a) and (c)(2) to read as
follows:
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§ 838.622 Cost-of-living and salary
adjustments.
(a)(1) A court order that awards
adjustments to a former spouse’s portion
of an employee annuity stated in terms
such as ‘‘cost-of-living adjustments’’ or
‘‘COLA’s’’ occurring after the date of the
decree but before the date of phased
retirement or retirement provides
increases equal to the adjustments
described in or effected under 5 U.S.C.
8340 or 8462.
(2) A court order that awards
adjustments to a former spouse’s portion
of an employee annuity stated in terms
such as ‘‘salary adjustments’’ or ‘‘pay
adjustments’’ occurring after the date of
the decree provides increases equal to
the adjustments described in or effected
under 5 U.S.C. 5303, until the date the
individual enters phased retirement
status or retires.
*
*
*
*
*
(c) * * *
(2)(i) Except as provided in paragraph
(b) of this section, a court order that
requires OPM to compute a benefit as of
a specified date before the employee’s
phased retirement or retirement, and
specifically instructs OPM not to apply
salary adjustments after the specified
date in computing the former spouse’s
share of an employee annuity, provides
that the former spouse is entitled to the
application of cost-of-living adjustments
after the date the individual enters
phased retirement status or retires (if the
employee does not enter phased
retirement status first), in the manner
described in § 838.241.
(ii) To award cost-of-living
adjustments between a specified date
and the employee’s phased retirement
or retirement, the court order must
specifically instruct OPM to adjust the
former spouse’s share of the employee
annuity by any cost-of-living
adjustments occurring between the
specified date and the date the
employee enters phased retirement
status or retires (if the employee does
not enter phased retirement status first).
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(iii) To prevent the application of
cost-of-living adjustments that occur
after the employee annuity begins to
accrue to the former spouse’s share of
the employee annuity, the decree must
either state the exact dollar amount of
the award to the former spouse or
specifically instruct OPM not to apply
cost-of-living adjustments occurring
after the date the employee enters
phased retirement status or retires (if the
employee does not enter phased
retirement status first).
■ 28. Amend § 838.623 by revising
paragraphs (c)(1), (c)(2) introductory
text, (d)(1), and (d)(2) introductory text,
and by adding paragraph (e) to read as
follows:
§ 838.623
Computing lengths of service.
*
*
*
*
*
(c)(1) When a court order directed at
employee annuity (other than a phased
retirement annuity or a composite
retirement annuity) contains a formula
for dividing employee annuity that
requires a computation of service
worked as of a date prior to separation
and using terms such as ‘‘years of
service,’’ ‘‘total service,’’ ‘‘service
performed,’’ or similar terms, the time
attributable to unused sick leave will
not be included.
(2) When a court order directed at
employee annuity other than a phased
retirement annuity or a composite
retirement annuity contains a formula
for dividing employee annuity that
requires a computation of ‘‘creditable
service’’ (or some other phrase using
‘‘credit’’ or its equivalent) as of a date
prior to retirement, unused sick leave
will be included in the computation as
follows:
*
*
*
*
*
(d)(1) General language such as
‘‘benefits earned as an employee with
the U.S. Postal Service * * *’’ provides
only that CSRS or FERS retirement
benefits are subject to division and does
not limit the period of service included
in the computation (i.e., service
performed with other Government
agencies will be included).
(2) To limit the computation of
benefits other than a phased retirement
annuity or a composite retirement
annuity to a particular period of
employment, the court order must—
*
*
*
*
*
(e) A court order directed at a phased
retirement annuity or a composite
retirement annuity cannot limit the
computation and division of a phased
retirement annuity or composite
retirement annuity to a particular period
of employment or service. A phased
retirement annuity is based on an
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employee’s service as of phased
retirement and a ‘‘fully retired phased
component,’’ described in §§ 831.1742
and 848.502, of a composite retirement
annuity is based on a phased retiree’s
service as of his or her full retirement.
A court order that attempts to limit the
computation of a phased retirement
annuity or a composite retirement
annuity to a particular period of
employment or service is not a court
order acceptable for processing. If the
former spouse’s award of a portion of
phased retirement annuity or a
composite retirement annuity is to be
limited, the limitation of the division
must be accomplished in a manner
other than by limiting the service to be
used in the computation.
■ 29. Amend Appendix A to subpart F
of part 838 by revising the table of
contents, adding model paragraphs 212–
217, and by revising model paragraph
232 and the introductory text for the 300
series paragraphs to read as follows:
Appendix A to Subpart F of Part 838—
Recommended Language for Court
Orders Dividing Employee Annuities
*
*
*
*
*
Table of Contents
000 Series—Special technical provisions.
¶001 Language required in Qualified
Domestic Relations Orders.
100 Series—Identification of the benefits
and instructions that OPM pay the
former spouse.
¶101 Identifying retirement benefits and
directing OPM to pay the former spouse.
¶102–110 [Reserved]
¶111 Protecting a former spouse entitled
to military retired pay.
200 Series—Computing the amount of the
former spouse’s benefit.
¶¶ 201–211—General award of employee
annuity.
¶201 Award of a fixed monthly amount.
¶202 Award of a percentage.
¶203 Award of a fraction.
¶204 Award of a pro rata share.
¶205–210 [Reserved]
¶211 Award based on a stated formula.
¶¶212–217 Award of phased retirement
annuity or composite retirement annuity.
¶212 Award of phased retirement annuity
and composite retirement annuity while
providing for the possibility that the
employee retires in the usual manner
without entering phased retirement
status before fully retiring.
¶213 Award of composite retirement
annuity while providing for the
possibility that the employee retires in
the usual manner without entering
phased retirement status, but not
providing for award of phased retirement
annuity.
¶214 Award of employee annuity when
the employee retires in the usual
manner, without providing for the
possibility that the employee enters
phased retirement status and full
retirement status.
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¶215 Award of phased retirement annuity
and composite retirement annuity,
without providing for the possibility that
the employee retires in the usual manner
without having entered phased
retirement status and full retirement
status.
¶216 Award of only phased retirement
annuity, but not awarding composite
retirement annuity when the employee
enters full retirement status or providing
for the possibility that the employee
retires in the usual manner without
entering phased retirement status before
fully retiring.
¶217 Award of only composite retirement
annuity when employee enters full
retirement status following phased
retirement, but not awarding phased
retirement annuity when the employee
enters phased retirement status or
providing for the possibility that the
employee retires in the usual manner
without entering phased retirement
status before fully retiring.
¶218–230 [Reserved]
¶¶231–232 Awarding or excluding
COLA’s.
¶231 Awarding COLA’s on fixed monthly
amounts.
¶232 Excluding COLA’s on awards other
than fixed monthly amounts.
300 Series—Type of annuity.
¶301 Awards based on benefits actually
paid.
¶302–310 [Reserved]
¶311 Awards of earned annuity in cases
where the actual annuity is based on
disability.
400 Series—Refunds of employee
contributions.
¶401 Barring payment of a refund of
employee contributions.
¶402 Dividing a refund of employee
contributions.
500 Series—Death of the former spouse.
¶501 Full annuity restored to the retiree.
¶502 Former spouse share paid to
children.
¶503 Former spouse share paid to the
court.
*
*
*
*
*
200 Series—Computing the amount of the
former spouse’s benefits.
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*
*
*
*
*
¶¶212–217 Award of phased retirement
annuity or composite retirement annuity.
A court order may include an award
directed at phased retirement annuity
payable to a phased retiree, to address the
possibility that an employee will enter
phased retirement status; composite
retirement annuity payable to a phased
retiree at entry into full retirement status, to
address the possibility that an employee will
enter phased retirement status and then enter
full retirement status; or annuity payable to
an employee who retires without having
elected phased retirement status.
A general non-specific award will apply to
any employee annuity payable, including
phased retirement annuity and composite
retirement annuity (see ¶¶ 201–211). For
example, an award dividing employee
annuity that uses terms such as ‘‘annuities,’’
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‘‘pensions,’’ ‘‘retirement benefits,’’ or similar
general terms, would apply to all types of
employee annuity.
To separately provide for division of
phased retirement annuity or composite
retirement annuity, a provision of a court
order must expressly state that it is directed
at ‘‘phased retirement annuity’’ or
‘‘composite retirement annuity,’’ and must
indicate the share of employee annuity as a
formula, percentage, or fraction. That is, it
must state the type of annuity to be divided
(e.g., ‘‘net phased retirement annuity’’). If
such a provision is unclear as to whether it
is directed at gross, net, or self-only phased
retirement annuity or composite retirement
annuity, the provision will be applied to
gross phased retirement annuity or gross
composite retirement annuity.
It should be noted that a former spouse
survivor annuity cannot be awarded from a
phased retirement annuity; therefore, a
phased retirement annuity is not subject to
reduction to provide a former spouse
survivor annuity. As a consequence, an
award dividing either ‘‘self-only phased
retirement annuity’’ or a ‘‘gross phased
retirement annuity’’ would be directed at
identical annuities. However, a former
spouse survivor annuity can be awarded from
a composite retirement annuity payable to a
phased retiree at entry into full retirement
status (i.e., when the ‘‘phased retiree’’ enters
full retirement status and becomes a
‘‘retiree’’); therefore, there would be a
difference between an award of a share of
‘‘self-only composite retirement annuity’’ and
an award of a share of ‘‘gross composite
retirement annuity.’’
Due to the complexity of the benefits, care
should be taken in drafting separate awards
of phased retirement annuity or composite
retirement annuity. It should also be noted,
for example, that an award directed only at
the division of phased retirement annuity or
composite retirement annuity payable to a
phased retiree will not be effective to divide
annuity payable to an employee who retires
in the usual manner, without having entered
phased retirement status first. If separate
awards of phased retirement annuity or
composite retirement annuity are to be
provided, consideration should be given to
including provisions in the paragraph
addressing the possibility that the employee
may retire in the usual manner without
entering phased retirement status before fully
retiring. Similarly, if employee annuity is
only to be awarded in the event the employee
retires in the usual manner, without entering
phased retirement status before fully retiring,
consideration should be given to including
specific language to that effect.
¶212 Award of phased retirement annuity
and composite retirement annuity while
providing for the possibility that the
employee retires in the usual manner without
entering phased retirement status before fully
retiring.
Using the following paragraph will award
phased retirement annuity and composite
retirement annuity and provides for the
possibility that the employee retires in the
usual manner without entering phased
retirement status:
‘‘[Employee] is (or will be) eligible for
retirement benefits under the Civil Service
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Retirement System based on employment
with the United States Government. If
[employee] enters phased retirement status,
the [former spouse] is entitled to a [insert
description of percentage, fraction, formula,
or insert term ‘pro rata share’] of [employee]’s
[insert ‘gross,’ ‘net,’ or ‘self-only’] monthly
phased retirement annuity under the Civil
Service Retirement System. When [employee]
enters full retirement status and receives a
composite retirement annuity, [former
spouse] is awarded [insert language awarding
fraction, formula, or ‘pro rata share’] of
[employee]’s monthly [insert ‘‘gross,’’ ‘‘net’’
or ‘‘self-only’’] composite retirement annuity
under the Civil Service Retirement System. If
[employee] retires from employment with the
United States Government without entering
phased retirement status before fully retiring,
[former spouse] is entitled to [insert
appropriate language from 200 series or 300
series paragraphs] under the Civil Service
Retirement System. The marriage began on
[insert date]. The United States Office of
Personnel Management is directed to pay
[former spouse]’s share directly to [former
spouse].’’
¶213 Award of composite retirement
annuity while providing for the possibility
that the employee retires in the usual manner
without entering phased retirement status,
but not providing for award of phased
retirement annuity.
Using the following will award composite
retirement annuity when an employee enters
phased retirement status and subsequently
enters full retirement status, and provides for
the possibility that the employee retires in
the usual manner without having entered
phased retirement status; however, the
paragraph will not award a phased retirement
annuity when the employee enters phased
retirement status:
‘‘[Employee] is (or will be) eligible for
retirement benefits under the Civil Service
Retirement System based on employment
with the United States Government. If
[employee] enters phased retirement status
and subsequently enters full retirement
status, the [former spouse] is entitled to a
[insert description of percentage, fraction,
formula, or insert term ‘pro rata share’] of
[employee]’s [insert ‘gross,’ ‘net,’ or ‘selfonly’] monthly composite retirement annuity
under the Civil Service Retirement System. If
[employee] retires from employment with the
United States Government without entering
phased retirement status before fully retiring,
[former spouse] is entitled to [insert
appropriate language from 200 series or 300
series paragraphs] under the Civil Service
Retirement System. The marriage began on
[insert date]. The United States Office of
Personnel Management is directed to pay
[former spouse]’s share directly to [former
spouse].’’
¶214 Award of employee annuity when
the employee retires in the usual manner,
without providing for the possibility that the
employee enters phased retirement status
and full retirement status.
Use the following paragraph if the former
spouse is only to be awarded a portion of the
employee’s annuity when the employee
retires in the usual manner, without an
award of a portion of the employee’s phased
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retirement annuity or composite retirement
annuity in the event that the employee enters
phased retirement status. It should be noted,
however, that if this conditional clause
provided below is used in an appropriate 200
or 300 series paragraph without a conditional
award of a portion of phased retirement
annuity and composite retirement annuity,
the former spouse will not receive a portion
of the employee’s annuity if the employee
enters phased retirement status and then
enters full retirement status:
‘‘If [employee] retires from employment
with the United States Government without
entering phased retirement status before fully
retiring, [former spouse] is awarded [insert
remaining language for the paragraph from
the appropriate 200 series or 300 series] . . .
The marriage began on [insert date]. The
United States Office of Personnel
Management is directed to pay [former
spouse]’s share directly to [former spouse].’’
¶215 Award of phased retirement annuity
and composite retirement annuity, without
providing for the possibility that the
employee retires in the usual manner without
having entered phased retirement status and
full retirement status.
Use the following paragraph to award only
phased retirement annuity and composite
retirement annuity. This paragraph will not
award benefits if the employee retires in the
usual manner without entering phased
retirement status:
‘‘[Employee] is (or will be) eligible for
retirement benefits under the Civil Service
Retirement System based on employment
with the United States Government. If
[employee] enters phased retirement status,
the [former spouse] is entitled to a [insert
description of percentage, fraction, formula,
or insert term ‘pro rata share’] of [employee]’s
monthly [insert ‘gross,’ ‘net,’ or ‘self-only’]
phased retirement annuity under the Civil
Service Retirement System. When [employee]
enters full retirement status and receives a
composite retirement annuity, [former
spouse] is awarded [insert language awarding
percentage, fraction, formula, or pro rata
share] of [employee]’s monthly [insert
‘‘gross,’’ ‘‘net’’ or ‘‘self-only’’] composite
retirement annuity under the Civil Service
Retirement System. The marriage began on
[insert date]. The United States Office of
Personnel Management is directed to pay
[former spouse]’s share directly to [former
spouse].’’
¶216 Award of only phased retirement
annuity, but not awarding composite
retirement annuity when the employee enters
full retirement status or providing for the
possibility that the employee retires in the
usual manner without entering phased
retirement status before fully retiring.
Using the following will award only
phased retirement annuity. This paragraph
will not award composite retirement annuity
when the employee enters full retirement
status nor will it provide for the possibility
that the employee retires in the usual manner
without entering phased retirement status. It
should be noted that if this paragraph is
used, the former spouse will not receive a
portion of the employee’s annuity benefits if
the employee retires in the usual manner
without entering phased retirement status
first:
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‘‘[Employee] is (or will be) eligible for
retirement benefits under the Civil Service
Retirement System based on employment
with the United States Government. If
[employee] enters phased retirement status,
the [former spouse] is entitled to a [insert
description of percentage, fraction, formula,
or insert term ‘pro rata share’] of [employee]’s
[insert ‘gross,’ ‘net,’ or ‘self-only’] monthly
phased retirement annuity under the Civil
Service Retirement System. The marriage
began on [insert date]. The United States
Office of Personnel Management is directed
to pay [former spouse]’s share directly to
[former spouse].’’
¶217 Award of only composite retirement
annuity when employee enters full
retirement status following phased
retirement, but not awarding phased
retirement annuity when the employee enters
phased retirement status or providing for the
possibility that the employee retires in the
usual manner without entering phased
retirement status before fully retiring.
Using the following will award only
composite retirement annuity when the
employee enters full retirement status
following phased retirement. This paragraph
will not award phased retirement annuity
when the employee enters phased retirement
status nor will it provide for the possibility
that the employee retires in the usual manner
without entering phased retirement status. It
should be noted that if this paragraph is
used, the former spouse will not receive a
portion of the employee’s annuity benefits if
the employee retires without entering full
retirement status from phased retirement
status:
‘‘[Employee] is (or will be) eligible for
retirement benefits under the Civil Service
Retirement System based on employment
with the United States Government. If
[employee] enters phased retirement status
and enters full retirement status, the [former
spouse] is entitled to a [insert description of
percentage, fraction, formula, or insert term
‘pro rata share’] of [employee]’s [insert
‘gross,’ ‘net,’ or ‘self-only’] monthly
composite retirement annuity under the Civil
Service Retirement System. The marriage
began on [insert date]. The United States
Office of Personnel Management is directed
to pay [former spouse]’s share directly to
[former spouse].’’
¶218–230 [Reserved]
¶¶231–232 Awarding or excluding
COLA’s.
*
*
*
*
*
¶232 Excluding COLA’s on awards other
than fixed monthly amounts.
Using the following paragraph will prevent
application of COLA’s to a former spouse’s
share of an employee annuity in cases where
the former spouse has been awarded a
percentage, fraction or pro rata share of the
employee annuity, rather than a fixed dollar
amount.
‘‘[Employee] is (or will be) eligible for
retirement benefits under the Civil Service
Retirement System based on employment
with the United States Government. [Insert
language for computing the former spouse’s
share from ¶ 202, ¶ 203, ¶ 204, ¶ 211, or ¶¶
212–217 of this appendix.] The United States
Office of Personnel Management is directed
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to determine the amount of [former spouse]’s
share on the date [insert ‘when [employee]
retires or enters phased retirement status’ or
if the employee has not retired or entered
phased retirement status, or ‘of this order’ if
the employee is already retired or entered
phased retirement status] and not to apply
COLA’s to that amount. The United States
Office of Personnel Management is directed
to pay [former spouse]’s share directly to
[former spouse].’’
300 Series—Type of Annuity
Awards of employee annuity to a former
spouse (other than awards of fixed dollar
amounts) must specify whether OPM will use
the ‘‘phased retirement annuity,’’ ‘‘composite
retirement annuity,’’ ‘‘gross annuity,’’ ‘‘net
annuity,’’ or ‘‘self-only annuity’’ as defined
in § 838.103 (see also § 838.306) in
determining the amount of the former
spouse’s entitlement. The court order may
contain a formula that has the effect of
creating other types of annuity, but the court
order may only do this by providing a
formula that starts from ‘‘phased retirement
annuity,’’ ‘‘composite retirement annuity,’’
‘‘gross annuity,’’ ‘‘net annuity,’’ or ‘‘self-only
annuity’’ as defined in § 838.103.
*
*
*
*
*
30. Amend § 838.803 by adding
paragraph (c) to read as follows:
■
§ 838.803 Language not acceptable for
processing.
*
*
*
*
*
(c) A court order that attempts to
award a former spouse survivor annuity
based on a phased retirement annuity or
to reduce a phased retirement annuity to
provide survivor benefits is not a court
order acceptable for processing.
■ 31. Amend § 838.806 by revising
paragraph (d)(2) to read as follows:
§ 838.806
Amended court orders.
*
*
*
*
*
(d) * * *
(2) The effective commencing date for
the employee’s annuity other than the
commencing date of a phased retirement
annuity.
*
*
*
*
*
■ 32. Amend § 838.807 by revising
paragraphs (a), (b)(1), (b)(2), and (c), and
adding paragraph (b)(3) to read as
follows:
§ 838.807 Cost must be paid by annuity
reduction.
(a) A court order awarding a former
spouse survivor annuity is not a court
order acceptable for processing unless it
permits OPM to collect the annuity
reduction required by 5 U.S.C. 8339(j)(4)
or 8419 from annuity paid by OPM to
a retiree. OPM will not honor a court
order that provides for the retiree or
former spouse to pay OPM the amount
of the annuity reduction by any other
means.
(b) * * *
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(1) By reduction of the former
spouse’s entitlement under a court order
acceptable for processing that is
directed at employee annuity payable to
a retiree;
(2) By reduction of the employee
annuity payable to a retiree; or
(3) By actuarial reduction of the
former spouse survivor annuity in the
event the reduction of the employee
annuity is not made for any reason prior
to the death of the annuitant.
(c) Unless the court order otherwise
directs, OPM will collect the annuity
reduction required by 5 U.S.C. 8339(j)(4)
or 8419 from the employee annuity
payable to a retiree.
■ 33. Amend § 838.1111 by
redesignating paragraph (b) as paragraph
(c), by revising paragraph (a)(1)
introductory text, and by adding new
paragraph (b) to read as follows:
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§ 838.1111 Amounts subject to child abuse
judgment enforcement orders.
(a)(1) Employee annuities, other than
phased retirement annuities, and
refunds of employee contributions are
subject to child abuse enforcement
orders only if all of the conditions
necessary for payment of the employee
annuity or refund of employee
contributions to the former employee
have been met, including, but not
limited to—
*
*
*
*
*
(b)(1) Phased retirement annuities are
subject to child abuse enforcement
orders only if all of the conditions
necessary for payment of the phased
retirement annuity to the phased retiree
have been met, including, but not
limited to—
(i) Entry of the employee into phased
retirement status under subpart Q of
part 831 of this chapter or part 848 of
this chapter, respectively;
(ii) Application for payment of the
phased retirement annuity by the
phased retiree; and
(iii) The phased retiree’s immediate
entitlement to a phased retirement
annuity.
(2) Money held by an employing
agency or OPM that may be payable at
some future date is not available for
payment under child abuse judgment
enforcement orders.
(3) OPM cannot pay a child abuse
creditor a portion of a phased retirement
annuity before the employee annuity
begins to accrue.
*
*
*
*
*
PART 841—FEDERAL EMPLOYEES
RETIREMENT SYSTEM—GENERAL
ADMINISTRATION
34. The authority citation for part 841
continues to read as follows:
■
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Authority: 5 U.S.C. 8461; Sec. 841.108 also
issued under 5 U.S.C. 552a; Secs. 841.110
and 841.111 also issued under 5 U.S.C.
8470(a); subpart D also issued under 5 U.S.C.
8423; Sec. 841.504 also issued under 5 U.S.C.
8422; Sec. 841.507 also issued under section
505 of Pub. L. 99–335; subpart J also issued
under 5 U.S.C. 8469; Sec. 841.506 also issued
under 5 U.S.C. 7701(b)(2); Sec. 841.508 also
issued under section 505 of Pub. L. 99–335;
Sec. 841.604 also issued under Title II, Pub.
L. 106–265, 114 Stat. 780.
35. Amend § 841.102 as follows:
a. Add paragraph (b)(6), and
b. Redesignate paragraphs (c)(6)
through (11) as paragraphs (c)(7)
through (12), and
■ c. Add new paragraph (c)(6).
■
■
■
§ 841.102 Regulatory structure for the
Federal Employees Retirement System.
*
*
*
*
*
(b) * * *
(6) Part 848 of this chapter contains
information about phased retirement
under FERS.
(c) * * *
(6) Part 850 of this chapter contains
information about CSRS and FERS
electronic retirement processing.
*
*
*
*
*
■ 36. Amend § 841.104 by revising
paragraph (a) and paragraph (b)
introductory text to read as follows:
§ 841.104
Special terms defined.
(a) Unless otherwise defined for use
in any subpart, as used in connection
with FERS (parts 841 through 850 of
this chapter), terms defined in 5 U.S.C.
8401 have the same meanings assigned
to them by that section.
(b) Unless otherwise defined for use
in any subpart, as used in connection
with FERS (parts 841 through 850 of
this chapter)—
*
*
*
*
*
PART 842—FEDERAL EMPLOYEES
RETIREMENT SYSTEM— BASIC
ANNUITY
37. The authority citation for part 842
continues to read as follows:
■
Authority: 5 U.S.C. 8461(g); Secs. 842.104
and 842.106 also issued under 5 U.S.C.
8461(n); Sec. 842.104 also issued under Secs.
3 and 7(c) of Pub. L. 105–274, 112 Stat. 2419;
Sec. 842.105 also issued under 5 U.S.C.
8402(c)(1) and 7701(b)(2); Sec. 842.106 also
issued under Sec. 102(e) of Pub. L. 104–8,
109 Stat. 102, as amended by Sec. 153 of Pub.
L. 104–134, 110 Stat. 1321–102; Sec. 842.107
also issued under Secs. 11202(f), 11232(e),
and 11246(b) of Pub. L. 105–33, 111 Stat.
251, and Sec. 7(b) of Pub. L. 105–274, 112
Stat. 2419; Sec. 842.108 also issued under
Sec. 7(e) of Pub. L. 105–274, 112 Stat. 2419;
Sec. 842.109 also issued under Sec. 1622(b)
of Public Law 104–106, 110 Stat. 515; Sec.
842.208 also issued under Sec. 535(d) of Title
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33933
V of Division E of Pub. L. 110–161, 121 Stat.
2042; Sec. 842.213 also issued under 5 U.S.C.
8414(b)(1)(B) and Sec.1313(b)(5) of Pub. L.
107–296, 116 Stat. 2135; Secs. 842.304 and
842.305 also issued under Sec. 321(f) of Pub.
L. 107–228, 116 Stat. 1383, Secs. 842.604 and
842.611 also issued under 5 U.S.C. 8417; Sec.
842.607 also issued under 5 U.S.C. 8416 and
8417; Sec. 842.614 also issued under 5 U.S.C.
8419; Sec. 842.615 also issued under 5 U.S.C.
8418; Sec. 842.703 also issued under Sec.
7001(a)(4) of Pub. L. 101–508, 104 Stat. 1388;
Sec. 842.707 also issued under Sec. 6001 of
Pub. L. 100–203, 101 Stat. 1300; Sec. 842.708
also issued under Sec. 4005 of Pub. L. 101–
239, 103 Stat. 2106 and Sec. 7001 of Pub. L.
101–508, 104 Stat. 1388; Subpart H also
issued under 5 U.S.C. 1104; Sec. 842.810 also
issued under Sec. 636 of Appendix C to Pub.
L. 106–554 at 114 Stat. 2763A–164; Sec.
842.811 also issued under Sec. 226(c)(2) of
Public Law 108–176, 117 Stat. 2529; Subpart
J also issued under Sec. 535(d) of Title V of
Division E of Pub. L. 110–161, 121 Stat. 2042.
38. Amend § 842.402 to revise the
definition of ‘‘full-time service’’ as
follows:
■
§ 842.402
Definitions.
*
*
*
*
*
Full-time service means service
performed by an employee who has—
(1) An officially established recurring
basic workweek consisting of 40 hours
within the employee’s administrative
workweek (as established under
§ 610.111 of this chapter or similar
authority);
(2) An officially established recurring
basic work requirement of 80 hours per
biweekly pay period (as established for
employees with a flexible or
compressed work schedule under 5
U.S.C. chapter 61, subchapter II, or
similar authority);
(3) For a firefighter covered by 5
U.S.C. 5545b(b) who does not have a 40hour basic workweek, a regular tour of
duty averaging at least 106 hours per
biweekly pay period; or
(4) A work schedule that is
considered to be full-time by express
provision of law, including a work
schedule established for certain nurses
under 38 U.S.C. 7456 or 7456A that is
considered by law to be a full-time
schedule for all purposes.
*
*
*
*
*
PART 843—FEDERAL EMPLOYEES
RETIREMENT SYSTEM—DEATH
BENEFITS AND EMPLOYEE REFUNDS
39. The authority citation for part 843
continues to read as follows:
■
Authority: 5 U.S.C. 8461; §§ 843.205,
843.208, and 843.209 also issued under 5
U.S.C. 8424; § 843.309 also issued under 5
U.S.C. 8442; § 843.406 also issued under 5
U.S.C. 8441.
40. Amend § 843.202 by revising
paragraph (b) to read as follows:
■
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§ 843.202 Eligibility for payment of the
unexpended balance to a separated
employee.
*
*
*
*
*
(b)(1) For a retirement based on a
separation before October 28, 2009,
periods of service for which employee
contributions have been refunded are
not creditable service in determining
whether the employee has sufficient
service to have title to an annuity or for
any other purpose.
(2) For a retirement based on a
separation on or after October 28, 2009,
periods of service for which employee
contributions have been refunded are—
(i) Creditable service in determining
whether the employee has sufficient
service to have title to an annuity; and
(ii) Not creditable without deposit for
any other purpose, except for average
pay computation purposes.
■ 41. Add part 848 to read as follows:
Subpart A—General Provisions
Subpart A—General Provisions
§ 848.101
Subpart B—Entering Phased Retirement
848.201 Eligibility.
848.202 Working percentage and officially
established hours for phased
employment.
848.203 Application for phased retirement.
848.204 Effective date of phased
employment and phased retirement
annuity commencing date.
848.205 Effect of phased retirement.
Subpart C—Returning to Regular
Employment Status
Subpart D—Entering Full Retirement Status
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848.401 Application for full retirement
status.
848.402 Commencing date of composite
retirement annuity.
Subpart E—Computation of Phased
Retirement Annuity at Phased Retirement
and Composite Retirement Annuity at Full
Retirement
848.501 Computation of phased retirement
annuity.
848.502 Computation of composite annuity
at final retirement.
848.503 Cost-of-living adjustments.
848.504 Non-eligibility for annuity
supplement.
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Applicability and purpose.
This subpart contains the regulations
implementing provisions of 5 U.S.C.
8412a authorizing phased retirement.
This subpart establishes the eligibility
requirements for making an election to
enter phased retirement status, the
procedures for making an election, the
record-keeping requirements, and the
methods to be used for certain
computations not addressed elsewhere
in parts 841–843 and 845.
§ 848.102
848.301 Ending phased retirement status to
return to regular employment status.
848.302 Effective date of end of phased
retirement status to return to regular
employment status.
848.303 Effect of ending phased retirement
status to return to regular employment
status.
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Subpart H—Reemployment After Separation
From Phased Retirement Status
848.801 Reemployment of an individual
who has separated from phased
employment and who dies before
submitting an application for a
composite retirement annuity.
Authority: 5 U.S.C. 8461; 5 U.S.C. 8412a.
Applicability and purpose.
Definitions.
Implementing directives.
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Subpart G—Death Benefits
848.701 Death of phased retiree during
phased employment.
848.702 Death of an individual who has
separated from phased employment and
who dies before submitting an
application for a composite retirement
annuity.
848.703 Lump-sum credit.
Subpart I—Mentoring
848.901 Mentoring.
PART 848—PHASED RETIREMENT
Sec.
848.101
848.102
848.103
Subpart F—Opportunity of a Phased Retiree
to Pay Deposit or Redeposit for Civilian or
Military Service
848.601 Deposit for civilian service for
which no retirement deductions were
withheld and redeposit for civilian
service for which retirement deductions
were refunded to the individual.
848.602 Deposit for military service.
Definitions.
In this subpart—
Authorized agency official means—
(1) For the executive branch agencies,
the head of an Executive agency as
defined in 5 U.S.C. 105;
(2) For the legislative branch, the
Secretary of the Senate, the Clerk of the
House of Representatives, or the head of
any other legislative branch agency;
(3) For the judicial branch, the
Director of the Administrative Office of
the U.S. Courts;
(4) For the Postal Service, the
Postmaster General;
(5) For any other independent
establishment that is an entity of the
Federal Government, the head of the
establishment; or
(6) An official who is authorized to
act for an official named in paragraphs
(1)–(5) in the matter concerned.
Composite retirement annuity means
the annuity computed when a phased
retiree attains full retirement status.
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Director means the Director of the
Office of Personnel Management.
Full retirement status means that a
phased retiree has ceased employment
and is entitled, upon application, to a
composite retirement annuity.
Full-time means—
(1) An officially established recurring
basic workweek consisting of 40 hours
within the employee’s administrative
workweek (as established under
§ 610.111 of this chapter or similar
authority); or
(2) An officially established recurring
basic work requirement of 80 hours per
biweekly pay period (as established for
employees with a flexible or
compressed work schedule under 5
U.S.C. chapter 61, subchapter II, or
similar authority).
Phased employment means the lessthan-full-time employment of a phased
retiree.
Phased retiree means a retirementeligible employee who—
(1) With the concurrence of an
authorized agency official, enters
phased retirement status; and
(2) Has not entered full retirement
status;
Phased retirement annuity means the
annuity payable under 5 U.S.C. 8412a
before full retirement.
Phased retirement percentage means
the percentage which, when added to
the working percentage for a phased
retiree, produces a sum of 100 percent.
Phased retirement period means the
period beginning on the date on which
an individual becomes entitled to
receive a phased retirement annuity and
ending on the date on which the
individual dies or separates from
phased employment.
Phased retirement status means that a
phased retiree is concurrently employed
in phased employment and eligible to
receive a phased retirement annuity.
Working percentage has the meaning
given that term in § 848.202(a).
§ 848.103
Implementing directives.
The Director may prescribe, in the
form he or she deems appropriate, such
detailed procedures as are necessary to
carry out the purpose of this subpart.
Subpart B—Entering Phased
Retirement
§ 848.201
Eligibility.
(a) A retirement-eligible employee, as
defined in paragraphs (b) and (c), may
elect to enter phased retirement status if
the employee has been employed on a
full-time basis for not less than the 3year period ending on the effective date
of phased retirement status under
§ 848.203.
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(b) Except as provided in paragraph
(c) of this section, a retirement-eligible
employee means an employee who, if
separated from the service, would meet
the requirements for retirement under
subsection (a) or (b) of 5 U.S.C. 8412.
(c) A retirement-eligible employee
does not include—
(1) A member of the Capitol Police or
Supreme Court Police, or an employee
occupying a law enforcement officer,
firefighter, nuclear materials courier, air
traffic controller, or customs and border
protection officer position, except a
customs and border protection officer
who is exempt from mandatory
separation and retirement under 5
U.S.C. 8325 pursuant to section
535(e)(2)(A) of Division E of the
Consolidated Appropriations Act, 2008,
Public Law 110–161;
(2) An individual eligible to retire
under 5 U.S.C. 8412(d) or (e): or
(3) An employee covered by a special
work schedule authority that does not
allow for a regularly recurring part-time
schedule, such as a firefighter covered
by 5 U.S.C. 5545b or a nurse covered by
38 U.S.C. 7456 or 7456A.
§ 848.202 Working percentage and
officially established hours for phased
employment.
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(a) For the purpose of this subpart,
working percentage means the
percentage of full-time equivalent
employment equal to the quotient
obtained by dividing—
(1) The number of officially
established hours per pay period to be
worked by a phased retiree, as described
in paragraph (b) of this section; by
(2) The number of hours per pay
period to be worked by an employee
serving in a comparable position on a
full-time basis.
(b) The number of officially
established hours per pay period to be
worked by an employee in phased
retirement status must equal one-half
the number of hours the phased retiree
would have been scheduled to work had
the phased retiree remained in a fulltime work schedule and not elected to
enter phased retirement status. These
hours make up +- the officially
established part-time work schedule of
the phased retiree and exclude any
additional hours worked under
§ 848.205(j).
§ 848.203 Application for phased
retirement.
(a) To elect to enter phased retirement
status, a retirement-eligible employee
covered by § 848.201 must—
(1) Submit to an authorized agency
official a written and signed request to
enter phased employment, on a form
prescribed by OPM;
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(2) Obtain the signed written approval
of an authorized agency official to enter
phased employment; and
(3) File an application for phased
retirement, in accordance with
§ 841.202.
(b) Except as provided in paragraph
(c) of this section, an applicant for
phased retirement may withdraw his or
her application any time before the
election becomes effective, but not
thereafter.
(c) An applicant for phased retirement
may not withdraw his or her application
after OPM has received a certified copy
of a court order (under part 581 or part
838 of this chapter) affecting the
benefits.
(d) (1) An employee and an agency
approving official may agree to a time
limit to the employee’s period of phased
employment as a condition of approval
of the employee’s request to enter
phased employment and phased
retirement, or by mutual agreement after
the employee enters phased
employment status.
(2) To enter into such an agreement,
the employee and the approving official
must complete a written and signed
agreement.
(3) The written agreement must
include the following:
(i) The date the employee’s period of
phased employment will terminate;
(ii) A statement that the employee can
request the approving official’s
permission to return to regular
employment status at any time or within
three days after the expiration of the
agreement as provided in § 848.301. The
agreement must also explain how
returning to regular employment status
would affect the employee, as described
in §§ 848.301–848.302.
(iii) A statement that the employee
has a right to elect to fully retire at any
time as provided in § 848.401;
(iv) A statement that the employee
may accept a new appointment at
another agency, with or without the new
agency’s approval of phased
employment, at any time before the
expiration of the agreement or within 3
days of the expiration of the agreement;
the agreement must also explain how
accepting an appointment at a new
agency as a regular employee would
affect the employee, as described in
§§ 848.301–848.302;
(v) An explanation that when the
agreed term of phased employment
ends, the employee will be separated
from employment and that such
separation will be considered voluntary,
based on the written agreement; and
(vi) An explanation that if the
employee is separated from phased
employment and is not employed
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within 3 days (i.e., the employee has a
break in service of greater than 3 days),
the employee will be deemed to have
elected full retirement.
(4) The agency approving official and
the employee may rescind an existing
agreement, or enter into a new
agreement to extend or reduce the term
of phased employment agreed to in an
existing agreement, by entering into a
new written agreement meeting the
requirements of this paragraph, before
the expiration of the agreement
currently in effect.
§ 848.204 Effective date of phased
employment and phased retirement annuity
commencing date.
(a) Phased employment is effective
the first day of the first pay period
beginning after phased employment is
approved by an authorized agency
official under § 848.203(a), or the first
day of a later pay period specified by
the employee with the authorized
agency official’s concurrence.
(b) The commencing date of a phased
retirement annuity (i.e., the beginning
date of the phased retirement period) is
the first day of the first pay period
beginning after phased employment is
approved by an authorized agency
official under § 848.203(a), or the first
day of a later pay period specified by
the employee with the authorized
agency official’s concurrence.
§ 848.205
Effect of phased retirement.
(a)(1) A phased retiree is deemed to be
a full-time employee for the purpose of
5 U.S.C. chapter 89 and 5 CFR part 890
(related to health benefits), as required
by 5 U.S.C. 8412a(i). The normal rules
governing health benefits premiums for
part-time employees in 5 U.S.C.
8906(b)(3) do not apply.
(2) A phased retiree is deemed to be
receiving basic pay at the rate applicable
to a full-time employee holding the
same position for the purpose of
determining a phased retiree’s annual
rate of basic pay used in calculating
premiums (employee withholdings and
agency contributions) and benefits
under 5 U.S.C. chapter 87 and 5 CFR
part 870 (dealing with life insurance), as
required by 5 U.S.C. 8412a(o). The
deemed full-time schedule will consist
of five 8-hour workdays each workweek,
resulting in a 40-hour workweek. Only
basic pay for hours within the deemed
full-time schedule will be considered,
consistent with 5 U.S.C. 8412a(o) and
the definition of ‘‘full-time’’ in
§ 848.102. Any premium pay creditable
as basic pay for life insurance purposes
under 5 CFR 870.204 for overtime work
or hours outside the full-time schedule
that an employee was receiving before
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phased retirement, such as standby duty
pay under 5 U.S.C. 5545(c)(1) or
customs officer overtime pay under 19
U.S.C. 267(a), may not be considered in
determining a phased retiree’s deemed
annual rate of basic pay under this
paragraph.
(b) A phased retiree may not be
appointed to more than one position at
the same time.
(c) A phased retiree may move to
another position in the agency or
another agency during phased
retirement status only if the change
would not result in a change in the
working percentage. To move to another
agency during phased retirement status
and continue phased employment and
phased retirement status, the phased
retiree must submit a written and signed
request and obtain the signed written
approval, in accordance with
§ 848.203(a)(1) and (2), of the authorized
agency official to which the phased
retiree is moving. Notwithstanding the
provisions of § 848.204, if the
authorized agency official approves the
request, the phased retiree’s phased
employment and phased retirement
status will continue without
interruption at the agency to which the
phased retiree moves. If the authorized
agency official at the agency to which
the phased retiree moves does not
approve the request, phased
employment and phased retirement
status terminates in accordance with
§ 848.302(b).
(d) A phased retiree may be detailed
to another position or agency if the
working percentage of the position to
which detailed is the same as the
working percentage of the phased
retiree’s position of record.
(e) A retirement-eligible employee
who makes an election under this
subpart may not elect an alternative
annuity under 5 U.S.C. 8420a.
(f) If the employee’s election of
phased retirement status becomes
effective, the employee is barred from
electing phased retirement status again.
Ending phased retirement status or
entering full retirement status does not
create a new opportunity for the
individual to elect phased retirement
status.
(g) With the exception of § 841.803(f),
a phased retiree is deemed to be an
annuitant for the purpose of subpart H
of 5 CFR part 841.
(h) A phased retiree is deemed to be
an annuitant for the purpose of subpart
J of 5 CFR part 841.
(i) Except as otherwise expressly
provided by law or regulation, a phased
retiree is treated as any other employee
on a part-time tour of duty for all other
purposes.
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(j)(1) A phased retiree may not be
assigned hours of work in excess of the
officially established part-time schedule
(reflecting the working percentage),
except under the conditions specified in
paragraph (j)(2) of this section.
(2) An authorized agency official may
order or approve a phased retiree to
perform hours of work in excess of the
officially established part-time schedule
only in rare and exceptional
circumstances meeting all of the
following conditions:
(i) The work is necessary to respond
to an emergency posing a significant,
immediate, and direct threat to life or
property;
(ii) The authorized agency official
determines that no other qualified
employee is available to perform the
required work;
(iii) The phased retiree is relieved
from performing excess work as soon as
reasonably possible (e.g., by
management assignment of work to
other employees); and
(iv) When an emergency situation can
be anticipated in advance, agency
management made advance plans to
minimize any necessary excess work by
the phased retiree.
(3) Employing agencies must inform
each phased retiree and his or her
supervisor of—
(i) The limitations on hours worked in
excess of the officially established parttime schedule;
(ii) The requirement to maintain
records documenting that the
exceptions met all required conditions;
(iii) The fact that, by law and
regulation, any basic pay received for
hours outside the employee’s officially
established part-time work schedule (as
described in § 848.202(a)(1) and (b)) is
subject to retirement deductions and
agency contributions, in accordance
with 5 U.S.C. 8412a(d), but is not used
in computing retirement benefits; and
(iv) The fact that, by law and
regulation, any premium pay received
for overtime work or hours outside the
full-time schedule that would otherwise
be basic pay for retirement, such as
customs officer overtime pay under 19
U.S.C. 267(a), will not be subject to
retirement deductions or agency
contributions, in accordance with 5
U.S.C. 8412a(d), and that any such
premium pay received will not be
included in computing retirement
benefits.
(4) Employing agencies must maintain
records documenting that exceptions
granted under paragraph (j)(2) of this
section meet the required conditions.
These records must be retained for at
least 6 years and be readily available to
auditors. OPM may require periodic
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agency reports on the granting of
exceptions and of any audit findings.
(5) If OPM finds that an agency (or
subcomponent) is granting exceptions
that are not in accordance with the
requirements of this paragraph (j), OPM
may administratively withdraw the
agency’s (or subcomponent’s) authority
to grant exceptions and require OPM
approval of any exception.
(6) If OPM finds that a phased retiree
has been working a significant amount
of excess hours beyond the officially
established part-time schedule to the
degree that the intent of the phased
retirement law is being undermined,
OPM may require that the agency end
the individual’s phased retirement by
unilateral action, notwithstanding the
normally established methods of ending
phased retirement. This finding does
not need to be based on a determination
that the granted exceptions failed to
meet the required conditions in
paragraph (j)(2) of this section. With the
ending of an individual’s phased
retirement, that individual must be
returned to regular employment status
on the same basis as a person making an
election under § 848.301—unless that
individual elects to fully retire as
provided under § 848.401.
(7) A phased retiree must be
compensated for excess hours of work
in accordance with the normally
applicable pay rules.
(8) Any premium pay received for
overtime work or hours outside the fulltime schedule that would otherwise be
basic pay for retirement, such as
customs officer overtime pay under 19
U.S.C. 267(a), is not subject to
retirement deductions or agency
contributions, in accordance with 5
U.S.C. 8412a(d).
Subpart C—Returning to Regular
Employment Status
§ 848.301 Ending phased retirement status
to return to regular employment status.
(a) Election to end phased retirement
status to return to regular employment
status. (1) A phased retiree may elect,
with the permission of an authorized
agency official, to end phased
employment at any time to return to
regular employment status. The election
is deemed to meet the requirements of
5 U.S.C. 8412a(g) regardless of the
employee’s work schedule. The
employee is not subject to any working
percentage limitation (i.e., full-time, 50
percent of full-time, or any other
working percentage) upon electing to
end phased retirement status.
(2) To elect to end phased retirement
status to return to regular employment
status, a phased retiree must—
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(i) Submit to an authorized agency
official, on a form prescribed by OPM,
a written and signed request to end
phased retirement status to return to
regular employment status; and
(ii) Obtain the signed written approval
of an authorized agency official for the
request.
(3) An employee may cancel an
approved election to end phased
retirement status to return to regular
employment status by submitting a
signed written request to the agency and
obtaining the approval of an authorized
agency official before the effective date
of return to regular employment status.
(4) The employing agency must notify
OPM that the employee’s phased
retirement status has ended by
submitting to OPM a copy of the
completed election to end phased
retirement status to return to regular
employment status within 15 days of its
approval.
(b) Mandated return to regular
employment status. A phased retiree
may be returned to regular employment
status as provided under § 848.205(j)(6).
(c) Bar on reelection of phased
retirement. Once an election to end
phased retirement status to return to
regular employment status is effective,
the employee may not reelect phased
retirement status.
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§ 848.302 Effective date of end of phased
retirement status to return to regular
employment status.
(a) (1) Except as provided in
paragraph (b) of this section, if a request
to end phased retirement status to
return to regular employment status is
approved by an authorized agency
official under § 848.301 on any date on
or after the first day of a month through
the fifteenth day of a month, the phased
retiree’s resumption of regular
employment status is effective the first
day of the first full pay period of the
month following the month in which
the election to end phased retirement
status to return to regular employment
status is approved.
(2) If a request to end phased
retirement status to return to regular
employment status is approved by an
authorized agency official under
§ 848.301 on any date on or after the
sixteenth day of a month through the
last day of a month, the phased retiree’s
resumption of regular employment
status is effective on the first day of the
first full pay period of the second month
following the month in which the
election to end phased retirement status
to return to regular employment status
is approved.
(3) The phased retirement annuity
terminates on the date determined
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under paragraph (a)(1) or (2) of this
section.
(b) When a phased retiree moves from
the agency that approved his or her
phased employment and phased
retirement status to another agency and
the authorizing official at the agency to
which the phased retiree moves does
not approve a continuation of phased
employment and phased retirement
status, phased employment and phased
retirement status terminates when
employment ends at the current
employing agency.
§ 848.303 Effect of ending phased
retirement status to return to regular
employment status.
(a) After phased retirement status
ends under § 848.302, the employee’s
rights under subchapter III of chapter 83
or chapter 84 of title 5, United States
Code, are determined based on the law
in effect at the time of any subsequent
separation from service.
(b) After an individual ends phased
retirement status to return to regular
employment status, for the purposes of
subchapter III of chapter 83 or chapter
84 of title 5, United States Code, at the
time of the subsequent separation from
service, the phased retirement period
will be treated as if it had been a period
of part-time employment with the work
schedule described in § 848.202(a)(1)
and (b). The part-time proration
adjustment for the phased retirement
period will be based upon the
individual’s officially established parttime work schedule, with no credit for
extra hours worked. In determining the
individual’s deemed rate of basic pay
during the phased retirement period,
only basic pay for hours within the
individual’s officially established parttime work schedule may be considered.
No pay received for other hours during
the phased retirement period may be
included as part of basic pay for the
purpose of computing retirement
benefits, notwithstanding the normally
applicable rules.
(c) The restrictions in §§ 848.601 and
848.602 regarding when an individual
must complete a deposit for civilian
service, a redeposit for civilian service,
or a deposit for military service do not
apply when a phased retiree ends
phased retirement status to return to
regular employment status under this
section.
Subpart D—Entering Full Retirement
Status
§ 848.401
status.
Application for full retirement
(a) Election of full retirement. (1) A
phased retiree may elect to enter full
retirement status at any time by
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submitting to OPM an application for
full retirement in accordance with
§ 841.202. This includes an election
made under § 848.205(j)(6) in lieu of a
mandated return to regular employment
status. Upon making such an election, a
phased retiree is entitled to a composite
retirement annuity.
(2) A phased retiree may cancel an
election of full retirement status and
withdraw an application for full
retirement by submitting a signed
written request with the agency and
obtaining the approval of an authorized
agency official before the commencing
date of the composite retirement
annuity.
(b) Deemed election of full retirement.
A phased retiree who is separated from
phased employment for more than 3
days enters full retirement status. The
individual’s composite retirement
annuity will begin to accrue on the
commencing date of the composite
annuity, as provided in § 848.402, and
payment will be made after he or she
submits an application in accordance
with § 841.202 of this chapter for the
composite retirement annuity.
(c) Survivor election provisions. An
individual applying for full retirement
status under this section is subject to the
survivor election provisions of subpart F
of 5 CFR part 842.
§ 848.402 Commencing date of composite
retirement annuity.
(a) The commencing date of the
composite retirement annuity of a
phased retiree who enters full
retirement status is the day after
separation.
(b) A phased retirement annuity
terminates upon separation from
service.
Subpart E—Computation of Phased
Retirement Annuity at Phased
Retirement and Composite Retirement
Annuity at Full Retirement
§ 848.501 Computation of phased
retirement annuity.
A phased retiree’s phased retirement
annuity equals the product obtained by
multiplying the amount of annuity
computed under 5 U.S.C. 8415,
excluding reduction for survivor
annuity, that would have been payable
to the phased retiree if, on the date on
which the phased retiree enters phased
retirement, the phased retiree had
separated from service and retired under
5 U.S.C. 8412(a) or (b), by the phased
retirement percentage for the phased
retiree.
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§ 848.502 Computation of composite
annuity at final retirement.
§ 848.503
(a) Subject to the adjustment
described in paragraph (c) of this
section, a phased retiree’s composite
retirement annuity at final retirement
equals the sum obtained by adding—
(1) The amount computed under
§ 848.501(a), increased by cost-of-living
adjustments under § 848.503(c); and
(2) The ‘‘fully retired phased
component’’ computed under paragraph
(b) of this section.
(b)(1) Subject to the requirements
described in paragraphs (b)(2) and (b)(3)
of this section, a ‘‘fully retired phased
component’’ equals the product
obtained by multiplying—
(i) The working percentage; by
(ii) The amount of an annuity
computed under 5 U.S.C. 8415 that
would have been payable at the time of
full retirement if the individual had not
elected phased retirement status and as
if the individual was employed on a
full-time basis in the position occupied
during the phased retirement period and
before any reduction for survivor
annuity.
(2) In applying paragraph (b)(1)(ii) of
this section, the individual must be
deemed to have a full-time schedule
during the period of phased retirement.
The deemed full-time schedule will
consist of five 8-hour workdays each
workweek, resulting in a 40-hour
workweek. In determining the
individual’s deemed rate of basic pay
during phased retirement, only basic
pay for hours within the deemed fulltime schedule will be considered,
consistent with the definition of ‘‘fulltime’’ in § 848.102. Any premium pay
creditable as basic pay for retirement
purposes for overtime work or hours
outside the full-time schedule that an
employee was receiving before phased
retirement, such as standby duty pay
under 5 U.S.C. 5545(c)(1) or customs
officer overtime pay under 19 U.S.C.
267(a), may not be considered in
determining a phased retiree’s deemed
rate of basic pay during phased
retirement.
(3) In computing the annuity amount
under paragraph (b)(1) of this section,
the amount of unused sick leave credit
equals the result of dividing the
applicable percentage under 5 U.S.C.
8415(l) of the days of unused sick leave
to the employee’s credit at separation
for full retirement, by the working
percentage.
(c) The composite retirement annuity
computed under paragraph (a) of this
section is adjusted by applying any
reduction for any survivor annuity
benefit.
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Jkt 229001
Cost-of-living adjustments.
(a) The phased retirement annuity
under § 848.501 is increased by cost-ofliving adjustments in accordance with 5
U.S.C. 8462.
(b) A composite retirement annuity
under § 848.502 is increased by cost-ofliving adjustments in accordance with 5
U.S.C. 8462, except that 5 U.S.C.
8462(c)(1) does not apply.
(c)(1) For the purpose of computing
the amount of phased retirement
annuity used in the computation under
§ 848.502(a)(1), the initial cost-of-living
adjustment applied is prorated in
accordance with 5 U.S.C. 8462(c)(1).
(2) If the individual enters full
retirement status on the same day as the
effective date of a cost-of-living
adjustment (usually December 1st), that
cost-of-living adjustment, if applicable
under 5 U.S.C. 8462, is applied to
increase the phased retirement annuity
used in the computation under
§ 848.502(a)(1).
§ 848.504 Non-eligibility for annuity
supplement.
A phased retiree is not eligible to
receive an annuity supplement under 5
U.S.C. 8421.
Subpart F—Opportunity of a Phased
Retiree to Pay Deposit or Redeposit for
Civilian or Military Service
§ 848.601 Deposit for civilian service for
which no retirement deductions were
withheld and redeposit for civilian service
for which retirement deductions were
refunded to the individual.
Any deposit under § 842.304 and
§ 842.305 of this chapter, or redeposit
under 5 U.S.C. 8422(i), that an employee
entering phased retirement wishes to
make for civilian service must be paid
within 30 days from the date OPM
notifies the employee of the amount of
the deposit or redeposit, during the
processing of the employee’s
application for phased retirement. The
deposit or redeposit amount will
include interest, computed to the
effective date of phased retirement. No
deposit or redeposit payment may be
made by the phased retiree when
entering full retirement status.
§ 848.602
Deposit for military service.
(a) A phased retiree who wishes to
make a military service credit deposit
under § 842.307 of this chapter for
military service performed prior to
entering phased retirement status must
complete such a deposit no later than
the day before the effective date of his
or her phased employment and the
commencing date of the phased
retirement annuity. A military service
credit deposit for military service
PO 00000
Frm 00028
Fmt 4701
Sfmt 4702
performed prior to an individual’s entry
into phased retirement status cannot be
made after the effective date of phased
employment and the commencing date
of phased retirement annuity.
(b) A phased retiree who wishes to
make a military service credit deposit
under § 842.307 of this chapter for
military service performed after the
effective date of phased employment
and the commencing date of phased
retirement annuity and before the
effective date of the composite
retirement annuity (e.g., due to the callup of the employee for active military
service) must complete such a deposit
no later than the day before the effective
date of his or her composite retirement
annuity.
Subpart G—Death Benefits
§ 848.701 Death of phased retiree during
phased employment.
For the purpose of 5 U.S.C. chapter
84, subchapter IV—
(a) The death of a phased retiree is
deemed to be a death in service of an
employee; and
(b) The phased retirement period is
deemed to have been a period of parttime employment with the work
schedule described in § 848.202(a)(1)
and (b) for the purpose of determining
survivor benefits. The part-time
proration adjustment for the phased
retirement period will be based upon
the employee’s officially established
part-time work schedule, with no credit
for extra hours worked. In determining
the employee’s deemed rate of basic pay
during the phased retirement period,
only basic pay for hours within the
employee’s officially established parttime work schedule may be considered.
No pay received for other hours during
the phased retirement period may be
included as part of basic pay for the
purpose of computing retirement
benefits, notwithstanding the normally
applicable rules.
§ 848.702 Death of an individual who has
separated from phased employment and
who dies before submitting an application
for a composite retirement annuity.
(a) For the purpose of 5 U.S.C. chapter
84, subchapter IV, an individual who
dies after separating from phased
employment and before submitting an
application for composite retirement
annuity is deemed to have filed an
application for composite retirement
annuity with OPM.
(b) The composite retirement annuity
of a phased retiree described in
paragraph (a) of this section is deemed
to have accrued from the day after
separation through the date of death.
Any unpaid composite annuity accrued
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Federal Register / Vol. 78, No. 108 / Wednesday, June 5, 2013 / Proposed Rules
during such period, minus any phased
retirement annuity paid during that
period, will be paid as a lump-sum
payment of accrued and unpaid
annuity, in accordance with 5 U.S.C.
8424(d) and (g).
§ 848.703
Lump-sum credit.
If an individual performs phased
employment, the lump-sum credit as
defined in 5 U.S.C. 8401(19) will be
reduced by any annuity that is paid or
accrued during phased employment.
Subpart H—Reemployment After
Separation from Phased Retirement
Status
§ 848.801 Reemployment of an individual
who has separated from phased
employment and who dies before
submitting an application for a composite
retirement annuity.
A phased retiree who has been
separated from employment for more
than 3 days and who has entered full
retirement status, but who has not
submitted an application for composite
retirement annuity, is deemed to be an
annuitant receiving annuity from the
Civil Service Retirement and Disability
Fund during any period of employment
in an appointive or elective position in
the Federal Government.
Subpart I—Mentoring
§ 848.901
Mentoring.
TKELLEY on DSK3SPTVN1PROD with PROPOSALS2
(a) A phased retiree, other than an
employee of the United States Postal
Service, must spend at least 20 percent
of his or her working hours in
mentoring activities as defined by an
authorized agency official. For purposes
of this section, mentoring need not be
limited to mentoring of an employee
who is expected to assume the phased
retiree’s duties when the phased retiree
fully retires.
(b) An authorized agency official may
waive the requirement under paragraph
(a) of this section in the event of an
emergency or other unusual
circumstances (including active duty in
the armed forces) that, in the authorized
agency official’s discretion, would make
it impracticable for a phased retiree to
fulfill the mentoring requirement.
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PART 870—FEDERAL EMPLOYEES’
GROUP LIFE INSURANCE PROGRAM
42. The authority citation for part 870
continues to read as follows:
■
Authority: 5 U.S.C. 8716; Subpart J also
issued under section 599C of Pub. L. 101–
513, 104 Stat. 2064, as amended; Sec.
870.302(a)(3)(ii) also issued under section
153 of Pub. L. 104–134, 110 Stat. 1321; Sec.
870.302(a)(3) also issued under sections
11202(f), 11232(e), and 11246(b) and (c) of
Pub. L. 105–33, 111 Stat. 251, and section
7(e) of Pub. L. 105–274, 112 Stat. 2419; Sec.
870.302(a)(3) also issued under section 145 of
Pub. L. 106–522, 114 Stat. 2472; Secs.
870.302(b)(8), 870.601(a), and 870.602(b) also
issued under Pub. L. 110–279, 122 Stat. 2604;
Subpart E also issued under 5 U.S.C. 8702(c);
Sec. 870.601(d)(3) also issued under 5 U.S.C.
8706(d); Sec. 870.703(e)(1) also issued under
section 502 of Pub. L. 110–177, 121 Stat.
2542; Sec. 870.705 also issued under 5 U.S.C.
8714b(c) and 8714c(c); Public Law 104–106,
110 Stat. 521.
43. Amend § 870.101 by revising the
definition of ‘‘date of retirement’’ to
read as follows:
■
§ 870.101
Definitions.
*
*
*
*
*
Date of retirement, as used in 5 U.S.C.
8706(b)(1)(A), means the starting date of
annuity. For phased retirees, as defined
in 5 U.S.C. 8336a and 8412a, the date
of retirement is the date the individual
enters full retirement status.
*
*
*
*
*
■ 44. Amend § 870.204 by adding
paragraph (h) to read as follows:
§ 870.204
Annual rates of pay.
*
*
*
*
*
(h) Notwithstanding any other
provision of this section, the annual pay
for a phased retiree, as defined in 5
U.S.C. 8336a and 8412a, is deemed to be
the rate of a full-time employee in the
position to which the phased retiree is
appointed, as determined under 5 CFR
831.1715(a)(2) or 848.205(a)(2), as
applicable.
PART 890—FEDERAL EMPLOYEES
HEALTH BENEFITS PROGRAM
45. The authority citation for part 890
continues to read as follows:
■
PO 00000
Frm 00029
Fmt 4701
Sfmt 9990
33939
Authority: 5 U.S.C. 8913; Sec. 890.301 also
issued under sec. 311 of Pub. L. 111–03, 123
Stat. 64; Sec. 890.111 also issued under
section 1622(b) of Pub. L. 104–106, 110 Stat.
521; Sec. 890.112 also issued under section
1 of Pub. L. 110–279, 122 Stat. 2604; 5 U.S.C.
8913; Sec. 890.803 also issued under 50
U.S.C. 403p, 22 U.S.C. 4069c and 4069c–1;
subpart L also issued under sec. 599C of Pub.
L. 101–513, 104 Stat. 2064, as amended; Sec.
890.102 also issued under sections 11202(f),
11232(e), 11246(b) and (c) of Pub. L. 105–33,
111 Stat. 251; and section 721 of Pub. L. 105–
261, 112 Stat. 2061.
46. Amend § 890.101 by revising the
definition of ‘‘immediate annuity’’ to
read as follows:
■
§ 890.101
Definitions; time computations.
*
*
*
*
*
Immediate annuity means an annuity
which begins to accrue not later than 1
month after the date enrollment under
a health benefits plan would cease for
an employee or member of family if he
or she were not entitled to continue
enrollment as an annuitant.
Notwithstanding the foregoing, an
annuity which commences on the birth
of the posthumous child of an employee
or annuitant is an immediate annuity.
For an individual who separates from
service upon meeting the requirements
for an annuity under § 842.204(a)(1) of
this chapter, immediate annuity
includes an annuity for which the
commencing date is postponed under
§ 842.204(c). For phased retirees, as
defined in 5 U.S.C. 8336a and 8412a, a
composite retirement annuity is an
immediate annuity.
*
*
*
*
*
■ 47. Amend § 890.501 by adding
paragraph (h) to read as follows:
§ 890.501
Government contributions.
*
*
*
*
*
(h) Notwithstanding 5 U.S.C. 8906,
the Government contribution for phased
retirees, as defined in 5 U.S.C. 8336a
and 8412a, is the same as that for
employees and annuitants as fixed by
paragraphs (a) and (b) of this section.
[FR Doc. 2013–13182 Filed 6–4–13; 8:45 am]
BILLING CODE 6325–39–P
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Agencies
[Federal Register Volume 78, Number 108 (Wednesday, June 5, 2013)]
[Proposed Rules]
[Pages 33911-33939]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-13182]
[[Page 33911]]
Vol. 78
Wednesday,
No. 108
June 5, 2013
Part III
Office of Personnel Management
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5 CFR Parts 581, 582, 831, et al.
Phased Retirement; Proposed Rule
Federal Register / Vol. 78 , No. 108 / Wednesday, June 5, 2013 /
Proposed Rules
[[Page 33912]]
-----------------------------------------------------------------------
OFFICE OF PERSONNEL MANAGEMENT
5 CFR Parts 581, 582, 831, 838, 841, 842, 843, 848, 870 and 890
RIN 3206-AM71
Phased Retirement
AGENCY: Office of Personnel Management.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Office of Personnel Management (OPM) is proposing to
implement phased retirement, a new human resources tool that allows
full-time employees to work a part-time schedule while beginning to
draw retirement benefits. Section 100121 of the ``Moving Ahead for
Progress in the 21st Century Act,'' or ``MAP-21,'' authorizes phased
retirement under the Civil Service Retirement System and the Federal
Employees' Retirement System and requires OPM to publish regulations
implementing phased retirement. The purpose of phased retirement is to
allow the Federal Government to continue to benefit from the services
of experienced employees who might otherwise choose to retire. These
proposed regulations inform agencies and employees about who may elect
phased retirement, what benefits are provided in phased retirement, how
an annuity is computed during and after phased retirement, and how
employees fully retire from phased retirement.
DATES: We must receive your comments by August 5, 2013.
ADDRESSES: You may submit comments, identified by docket number and/or
RIN number 3206-AM71 by any of the following methods:
Federal eRulemaking Portal: https://www.regulations.gov.
Follow the instructions for submitting comments.
Email: combox@opm.gov. Include RIN number 3206-AM71 in the
subject line of the message.
Mail: Kristine Prentice, Retirement Policy, Retirement
Services, Office of Personnel Management, 1900 E Street NW.,
Washington, DC 20415-3200.
FOR FURTHER INFORMATION CONTACT: Kristine Prentice, (202) 606-0299.
SUPPLEMENTARY INFORMATION: OPM proposes to amend parts 581, 582, 831,
838, 841, 842, 843, 870 and 890, and add a new 5 CFR part 848 to
implement phased retirement as required by section 100121, the ``Moving
Ahead for Progress in the 21st Century Act,'' or ``MAP-21,'' Public Law
112-141.
Background
Phased retirement is a new human resources management tool made
possible by section 100121 of MAP-21, which amended chapters 83 and 84
of title 5, United States Code, by adding provisions, at 5 U.S.C. 8336a
and 8412a, for phased retirement. The phased retirement provisions of
law require OPM to publish final regulations to implement phased
retirement.
Phased retirement will in essence permit an individual to retire
from part of his or her employment, while continuing employment on a
part-time basis and continuing to earn additional retirement benefits
proportionately based upon the additional part-time employment. An
eligible employee who enters phased retirement, which requires the
approval of an authorized agency official, will work half-time and will
receive one half of what his or her annuity would have been had the
individual retired completely from Federal service. During phased
retirement, he or she is a part-time employee, not a reemployed
annuitant.
Phased retirement will encourage the most experienced Federal
employees to extend their contributions to the Nation, and will operate
as a tool to ensure continuity of operations and to facilitate
knowledge management. The main purpose of phased retirement is to
enhance mentoring and training of the employees who will be filling the
positions of more experienced employees who are preparing for full
retirement. It is intended to encourage experienced employees to
remain, in at least a part-time capacity, while less experienced
employees are preparing to assume the duties of the employees who are
planning to retire.
An effective phased retirement plan has been a long-sought goal.
However, under prior law, the problem was that an individual who was
retirement eligible but wished to continue employment on a part-time
basis generally had little economic incentive to do so because an
employee's potential retirement benefits would often be equal to or
greater than his or her salary would be for part-time employment.
A person who enters phased retirement (hereafter a ``phased
retiree,'') would receive more income than he or she would earn by
simply changing to a part-time work schedule or by simply retiring,
while continuing to share knowledge and expertise with the next
generation of Federal leaders via mentoring and role-modeling. Once
these individuals fully retire, they will be entitled to a greater
annuity than if they had fully retired at the time of transition to
phased retirement, but less than if they had continued employment on a
full-time basis.
Eligibility
Participation is entirely voluntary, and requires the mutual
consent of both the employee and employing agency. An employee does not
have an entitlement to phased retirement. In order to participate, an
individual must have been employed on a full-time basis for the
preceding three years. Under the Civil Service Retirement System
(CSRS), the individual must be eligible for immediate retirement with
at least 30 years of service at age 55, or with 20 years of service at
age 60. Under the Federal Employees' Retirement System (FERS), the
individual must be eligible for immediate retirement with at least 30
years of service at MRA (minimum retirement age, which ranges between
age 55 and 57 depending upon year of birth), or with 20 years of
service at age 60.
The law provides that employees subject to mandatory retirement
(including Law Enforcement Officers, Firefighters, Nuclear Materials
Couriers, Air Traffic Controllers, Customs and Border Protection
Officers, or members of the Capitol Police or Supreme Court Police) may
not participate. However, certain employees who are exempt from
mandatory separation and retirement (such as Customs and Border
Protection Officers exempted from mandatory retirement when special
retirement provisions for Customs and Border Protection Officers were
first enacted) may participate. This exemption does not apply to
individuals for whom mandatory retirement has been waived, but only to
individuals not subject to mandatory retirement by statute.
It is noteworthy that while the statutory provisions concerning
employees subject to mandatory retirement could have been more clearly
drafted, the legislative history makes the intent both clear and
specific. The language was taken directly from a different free-
standing phased retirement bill, H.R. 4363, reported out of the House
of Representatives Committee on Oversight and Government Reform on June
15, 2012. That report, H.R. Rep. No. 535, 112th Congress, 2nd Sess. 4
(2012), discussed this provision, with this explanation in the section-
by-section analysis:
Subsection (a) of 5 U.S.C. 8336a defines the terms that are used
in the new section. Individuals subject to mandatory retirement,
such as law enforcement, firefighters, nuclear materials couriers,
air traffic controllers, customs and border protection officers, or
members of the Capitol Police or Supreme Court Police, may not elect
phased retirement.
[[Page 33913]]
Moreover, the Conference Report, H.R. Rep. No. 557, 112th Congress,
2nd Sess. 667 (2012), further describes details of the provisions
including the exemption:
The Senate amendment excludes from eligibility law enforcement
officers, firefighters, nuclear materials couriers, air traffic
controllers, customs and border protection officers, or members of
the Capital Police or Supreme Court Police.
* * * * *
Second, the provision provides that certain law enforcement officers
such as Customs and Border Protection Officers hired before 2008
(when they were granted law-enforcement type status which makes them
ineligible for phased retirement under the Senate Amendment because
they are subject to mandatory retirement) are eligible for phased
retirement.
Withdrawing From Phased Retirement To Resume Regular Employee Status
After entering phased retirement, a phased retiree can end his or
her phased retirement to return to being a regular full-time employee,
if the employing agency agrees to the change. The phased retirement
annuity will then terminate. Upon later full retirement, the
individual's retirement will be calculated under the laws then in
effect, with the period of phased retirement treated as part-time
service. Once an individual has gone back to being a full-time
employee, the individual cannot elect to go back into phased
retirement.
Transition From Phased Retirement to Full Retirement
A phased retiree may voluntarily apply for full retirement in the
same manner as other employees. The employee does not have to obtain
the permission of his or her agency to fully retire.
Benefits and Computation
Eligible employees who enter phased retirement will work half-time
and will receive additional credit for that service toward their full
retirement. While working part-time during phased retirement, employees
will also receive annuity payments, consistent with the retirement
benefits they were entitled to prior to entering phased retirement
status, divided by the ``phased retirement percentage'' (i.e., 50
percent).
Deposits and redeposits for service credit (including for military
service) must be satisfied (either by payments or annuity reduction as
applicable) prior to entry into phased retirement status; however, if
an individual ends phased retirement status to return to regular
employee status, deposits and redeposits for service credit would again
be permitted. Any reduction in annuity or loss of service credit at the
time of entry into phased retirement will be permanent for the
employee, unless the individual ends phased retirement status by
returning to full-time employment and has a new opportunity to make
deposits or redeposits for service credit. Employees wishing to make a
deposit or redeposit for civilian service may submit a request to make
the service credit payment with their applications for phased
retirement. They will then be given a final opportunity to pay the
deposit or redeposit before processing of the phased retirement benefit
is completed. No deposits or redeposits can be made by the employee
after the phased retirement application has been processed (unless the
employee elects to opt out of phased retirement status and return to
regular employment). If a phased retiree dies while in phased
employment status, the survivors can make deposits or redeposits on the
same basis as if the decedent had not been a phased retiree.
Phased retirement annuities will be subject to court orders
providing for division, allotment, assignment, execution, levy,
attachment, garnishment, or other legal process on the same basis as
other annuities. At the same time, phased retirees' pay from their
half-time employment is subject to garnishment and other legal process
on the same basis as other Federal employee pay.
During phased retirement, Federal Employee Health Benefits (FEHB)
and Federal Employees' Group Life Insurance (FEGLI) enrollment will
stay with the employing agency. FEGLI benefit coverage amounts will be
based upon the full-time salary for the position. The FEHB employer
contribution will be the same as for full-time employees.
When the phased retiree fully retires immediately after the phased
retirement period, the individual will receive a ``composite retirement
annuity.'' The composite retirement annuity will be the amount of
phased retirement annuity as of the commencing date of full retirement,
plus one-half of the amount of annuity that would have been payable at
the time of full retirement if the individual had not elected phased
retirement and as if the individual was employed on a full-time basis
in the position occupied during the phased retirement period. If, at
the time of full retirement, the employee meets the participation
requirements to continue FEHB and FEGLI during retirement, his or her
FEHB and FEGLI enrollments will transfer to OPM when the phased retiree
enters full retirement.
No unused sick leave can be used in the computation of the phased
retirement annuity. However, at full retirement the unused sick leave
will be taken into account. While the computational provisions are
somewhat complex, the value of the sick leave in that computation will
be the same as for an individual retiring from a full-time position.
Survivor Benefits
No survivor benefits can be based upon a phased retirement annuity.
If the phased retiree dies prior to full retirement, survivor benefits
will be those applicable for an employee who died in service, with
provision for minor computational adjustments necessitated by the
unique nature of phased retirement. If the individual dies during
phased retirement, the period of phased retirement will be treated as a
period of part-time service in the computation of the survivor annuity.
However, the FERS Basic Employee Death Benefit will be based upon the
full-time salary of the position.
Garnishment and Phased Retirees
Garnishment orders for phased retirees will be treated much the
same way as those for reemployed annuitants. The rules that typically
apply to garnishment of annuities will continue to apply to the phased
retirement annuity a phased retiree receives, and the rules that
typically apply to pay will continue to apply to the salary a phased
retiree receives during phased employment. For instance, phased
retirement annuities, like regular Federal annuities, will not be
subject to commercial garnishments under 5 CFR part 582, but the part-
time pay received during phased employment will continue to be subject
to commercial garnishment.
Section-by-Section Description of Proposed Regulations
Part 581--Processing Garnishment Orders for Child Support And/Or
Alimony
Phased retirement annuities and pay are subject to the same rules
for processing garnishment orders for child support and/or alimony as
regular annuities and other Federal pay. Technical changes are made to
add two definitions in Sec. 581.102. Paragraph (l) adds a definition
for ``phased retirement status'' and paragraph (m) adds a definition
for ``phased retirement annuity.'' Both terms are defined by cross-
reference to Sec. 838.103, which
[[Page 33914]]
provides new terms for processing court orders for phased retirees.
The current Sec. 581.306 explains the obligation of governmental
entities when in receipt of a garnishment order for child support and/
or alimony and when there is not money due to the employee-obligor or
when the obligor moves to a different governmental entity. Paragraph
(d) is added to Sec. 581.306 to account for employees who enter phased
retirement status. Governmental entities will still be obligated to
honor the garnishment order as it pertains to ongoing part-time pay.
However, paragraph (d) imposes an additional obligation on the
governmental entity, similar to current paragraph (c), to notify the
party who caused the legal process to be served that the obligor is now
entitled to a phased retirement annuity and to direct the party to the
designated agent at the Office of Personnel Management who is
responsible for the disbursement of retirement benefits. The title of
Sec. 581.306 was also amended to add ``transfer of service of legal
process to another governmental entity'' to account for the provisions
in paragraphs (c) and (d).
Part 582--Commercial Garnishment of Federal Employees' Pay
Phased retirees' pay is treated the same way as other Federal pay
for purposes of commercial garnishment orders. Technical changes are
made to Sec. 582.102, paragraph (2). In paragraph (2), the definition
of ``employee or employee-obligor'' is amended to add ``individuals
engaged in phased employment.''
Subpart Q of Part 831
OPM is proposing to add subpart Q to part 831 to set out the
requirements for entering, exiting, and retiring under the new phased
retirement option under CSRS. Subpart Q establishes the eligibility
requirements for making an election of phased retirement, the
procedures for electing phased retirement, the requirements for
agencies to notify OPM of phased retirement actions, and the
methodology OPM intends to use to compute phased retirement annuities
under 5 U.S.C. 8336a.
Sections 831.1701 through 831.1703 explain the purpose and scope of
the regulations, define terms used in subpart Q, and provide that the
Director of OPM may issue implementing directives regarding the phased
retirement program. In particular, Sec. 831.1702 provides a definition
of ``full-time.'' This definition does not include certain categories
of full-time employees listed in the definition of ``full-time
service'' in Sec. 831.703--namely, certain firefighters compensated
under 5 U.S.C. 5545b and certain employees with less-than-full-time
schedules who are deemed to be full-time employees by express provision
of law (e.g., nurses with special work schedules under 38 U.S.C. 7456
or 7456A). Employees with these special work schedules may not elect
phased retirement, since regularly recurring part-time employment is
not a possibility under the applicable law. (Almost all firefighters
compensated under 5 U.S.C. 5545b would also be ineligible for phased
retirement on the additional basis that they are eligible for an early
and enhanced retirement with mandatory separation provisions.)
Section 831.1711 sets out the eligibility requirements for entering
phased retirement. Eligibility for phased retirement is limited to
employees who have been employed on a full-time basis for not less than
the 3-year period ending on the effective date of the employee's
election of phased retirement. Under CSRS, these employees must also be
eligible for immediate retirement with at least 30 years of service at
age 55, or with 20 years of service at age 60. Employees who do not
meet these requirements will be excluded from electing phased
retirement.
For the purposes of phased retirement, a retirement-eligible
employee is an employee who, if separated from the service, would meet
the requirements for retirement under subsection (a) or (b) of 5 U.S.C.
8336. As discussed above, a retirement-eligible employee in this
context does not include an employee subject to mandatory retirement,
with limited exceptions. There is no reason for such employees to wish
to participate in phased retirement because 5 U.S.C. 8336a requires
that the phased retirement computations are made using the general
formula applicable to regular employee service.
In addition, since the phased retirement law requires that an
employee be converted from full-time to part-time, Sec. 831.1711 makes
clear that phased retirement may not be elected by employees covered by
a special work schedule authority that does not allow for a regularly
recurring part-time schedule, such as a firefighter covered by 5 U.S.C.
5545b or a nurse covered by 38 U.S.C. 7456 or 7456A.
Section 831.1712 describes how ``working percentage'' would be
defined. The law uses the term ``working percentage'' to refer to the
percentage of a full-time schedule that a phased retiree would be
scheduled to work. The statute permits a working percentage of 50
percent (i.e., a half-time work schedule) and contemplates additional
working percentages, at OPM's discretion. Although a working percentage
of 50 percent would be the only working percentage permitted under
Sec. 831.1712, the section has been drafted using general descriptive
language to easily allow OPM to amend the regulations in the future to
allow working percentages other than 50 percent, if and when OPM
determines that such an amendment is appropriate. Unless and until OPM
evaluates the phased retirement program and publishes regulations
permitting a different ``working percentage,'' a phased retiree will
not be permitted to have a working percentage other than 50 percent.
Section 831.1712 defines ``working percentage'' as the percentage of
full-time equivalent employment equal to the quotient obtained by
dividing (1) the number of officially established hours per pay period
to be worked by a phased retiree by (2) the number of hours per pay
period to be worked by an employee serving in a comparable position on
a full-time basis. In other words, the number of hours per pay period
in a phased retiree's officially established part-time work schedule
must equal one-half the number of hours the phased retiree would have
worked had the phased retiree remained in a full-time work schedule and
not elected to enter phased retirement status. The phased retiree's
officially established part-time work schedule excludes any additional
(excess) hours worked under the special exception authority in Sec.
831.1715(h) (discussed below).
Sections 831.1713 through 831.1715 set out the requirements for an
employee to elect phased retirement, establish the commencing date of
the phased annuity (and therefore the effective date of the half-time
work schedule, or what we are calling ``phased employment''), and state
the effect of phased retirement. Section 831.1713 provides that an
authorized agency official must give the potential phased retiree
written approval for the change. Section 831.1713(d) allows an agency
to establish a time limit on the phased retirement election of any
employee as a condition of approving the election to phased retirement.
To implement such a time limit, the agency and the employee requesting
phased retirement must complete a written and signed agreement. The
agency is responsible for drafting an agreement that meets the
requirements enumerated
[[Page 33915]]
in Sec. 831.1713(d)(3). The agency is also responsible for defending
any challenges to an agreement made with an employee under Sec.
831.1713(d). The election must be accompanied by a retirement
application, in accordance with Sec. 831.104.
Section 831.1715(a)(1) provides, consistent with 5 U.S.C. 8336a(i),
that a phased retiree is deemed to be a full-time employee for the
purpose of the Federal Employees Health Benefits Program. Section
831.1715(a)(2) has provisions for determining the amount of deemed
basic pay and the deemed full-time schedule for determining Federal
Employees' Life Insurance benefits and premiums. Any premium pay
normally creditable as basic pay under 5 CFR 870.204 for overtime work
outside of a full-time schedule may not be considered in determining a
phased retiree's deemed annual rate of basic pay for life insurance
purposes. A conforming change is also being made to 5 CFR 870.204.
Section 831.1715(h) describes the conditions under which a phased
retiree may, in rare and exceptional circumstances, work hours in
excess of officially established hours, as well as related agency
responsibilities and OPM authorities. The limitations and controls on
excess hours are necessary and proper to carry out the intent of the
phased retirement law and ensure that phased retirees do not work
significant hours beyond the working percentage used to compute the
phased retirement annuity. In promulgating Sec. 831.1715(h), we are
relying on OPM's broad regulatory authority in 5 U.S.C. 8347(a), as
well as the authority in 5 U.S.C. 8336a(b)(1) to prescribe regulations
governing the phased retirement resulting from employee elections.
Sections 831.1721 through 831.1723 describe how a phased retiree
may return to regular employment status, the effective date of the
decision to end phased retirement, and what happens to the phased
annuity as a result of returning to a regular employment status.
Section 831.1721(a) provides that an authorized agency official must
give the phased retiree written permission to return to regular
employment on a form prescribed by OPM. With an authorized agency
official's approval, the employee may enter into any type of work
schedule after returning to regular employment. When an individual in
phased retirement status returns to regular employment status, the
phased retirement annuity terminates; therefore, agencies are required
to immediately notify OPM of a phased retiree's return to regular
employee status to prevent improper payments. Section 831.1721(b) also
includes provisions concerning the return of a phased retiree to
regular employment status. For a phased retiree who returns to regular
employment under Sec. 831.1721(a) or (b), Sec. 831.1723 provides that
the period of phased employment will be treated as a period of part-
time service under subchapter III, chapter 83, of title 5, United
States Code. Consistent with 5 U.S.C. 8336a(g)(3), the phased
retirement period will be deemed to have been a period of part-time
employment with the work schedule described in Sec. 831.1712. The
part-time proration adjustment will be based upon the individual's
officially established part-time work schedule, with no credit for
extra hours worked. In determining the individual's deemed rate of
basic pay during the phased retirement period, only basic pay for hours
within the individual's officially established part-time work schedule
may be considered. No pay received for other hours during the phased
retirement period may be included as part of basic pay for the purpose
of computing retirement benefits, notwithstanding the normally
applicable rules. A phased retiree who returns to regular employee
status would not be entitled to a composite retirement annuity upon
subsequent retirement; the employee's rights under subchapter III of
chapter 83 or chapter 84 of title 5, United States Code, would be
determined based on the law in effect at the time of any subsequent
separation from service.
Sections 831.1731 and 831.1732 describe how an employee may elect
to fully retire and how OPM will determine the commencing date of the
employee's composite retirement annuity. These sections also discuss
how OPM will treat an employee who has separated from phased employment
and the criteria by which OPM will either continue to pay a phased
retirement annuity or terminate payment as required by law.
Sections 831.1741 through 831.1744 establish how OPM intends to
compute the phased retirement annuity and the composite annuity payable
at full retirement under CSRS. Section 831.1741 provides that, subject
to any adjustments for unpaid deposits of retirement contributions and
Social Security old-age benefits, the phased retirement annuity equals
(1) the amount of annuity computed under 5 U.S.C. 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, (2) adjusted by the phased
retirement percentage for the phased retiree. Phased retirement
annuities will be increased by cost-of-living adjustments. Section
831.1742 establishes the computation of the composite retirement
annuity. Subject to any reduction to provide a survivor annuity and
adjustments for unpaid deposits of retirement contributions and Social
Security old-age benefits, the composite retirement annuity consists of
the phased retirement annuity, increased by cost-of-living adjustments,
plus the ``fully retired phased component.'' The ``fully retired phased
component'' is (1) the amount of an annuity computed under 5 U.S.C.
8339 that would have been payable at the time of full retirement if the
individual had not elected phased retirement status and as if the
individual was employed on a full-time basis in the position occupied
during the phased retirement period and before any reduction for
survivor annuity multiplied by (2) the working percentage. Section
831.1742(b) establishes rules for deemed full-time and deemed basic pay
for the purposes of computing the ``fully retired phased component.''
The law requires phased retirees to be deemed to be full-time for the
purpose of determining basic pay for life insurance and composite
annuity, and also limits pay subject to retirement deductions based on
the concept of full-time. For those purposes, we have taken a
consistent approach of defining full-time to be 40 hours a week and to
exclude overtime hours; thus, any pay for overtime hours (hours beyond
the full-time schedule--which normally should not be worked by a phased
retiree) is not considered basic pay for life insurance or retirement
purposes. The deemed full-time schedule is five 8-hour workdays each
workweek, resulting in a 40-hour workweek, consistent with other
provisions in the regulations. In determining the individual's deemed
rate of basic pay during phased retirement, only basic pay for hours
within the deemed full-time schedule will be considered for the
computation of the composite retirement annuity at full retirement.
Similarly, Sec. Sec. 831.1721 and 831.1761 include provisions
concerning deemed part-time (see discussion of those sections).
Sections 831.1751 through 831.1753 describe how OPM intends to
treat civilian deposits and redeposits, as well as military service
deposits. Section 831.1751 outlines the process OPM will follow with
regard to deposits for civilian service for which no retirement
deductions were withheld and for redeposits owed for civilian service
previously refunded to the employee.
[[Page 33916]]
Deposits and redeposits will not be possible at the point where a
phased retiree elects to enter full retirement status. Section 831.1752
refers specifically to how OPM will treat military service deposits,
whether for military service prior to phased retirement or military
service after phased retirement begins. Section 831.1753 describes how
OPM intends to treat civilian and military service of individual
employees affected by erroneous retirement coverage determinations.
Sections 831.1761 through 831.1763 set out how OPM plans to
administer death benefits for employees who die while in phased
retirement and for employees who die after separation from phased
employment without having submitted an application for a composite
retirement annuity. Consistent with 5 U.S.C. 8336a(h)(2), Sec.
831.1761(a)(2) provides that when a phased retiree dies in service, the
phased retiree is deemed to have had a part-time schedule consistent
with the working percentage. Any hours beyond that part-time schedule
and any pay associated with such hours would not be creditable for
retirement purposes.
Section 831.1771 addresses reemployment of an individual who has
separated from phased employment and who dies before submitting an
application for a composite retirement annuity.
Section 831.1781, as provided by MAP-21, requires a phased retiree
(other than an employee of the U.S. Postal Service) to spend at least
20 percent of his or her working hours in mentoring activities. It is
up to the phased retiree's employing agency to determine what types of
mentoring activities satisfy this requirement and how to ensure this
requirement is being fulfilled. The phased retiree may mentor one or
more employees of the agency and need not mentor the same employees
throughout the period of phased retirement. Although it would clearly
be desirable in many instances for the phased retiree to mentor the
employee or employees who are expected to assume his or her duties when
the phased retiree fully retires, the law does not provide that this is
the only way to implement the mentoring requirement. An authorized
agency official may waive the mentoring requirement in the event of an
emergency or other unusual circumstances that would make it
impracticable, such as when the individual is called to active-duty
military service. OPM expects waivers of the mentoring requirement to
be very rare.
Part 848--Federal Employees' Retirement System
Part 848 is being added to 5 CFR, to set out the requirements for
entering, exiting, and retiring under the new phased retirement option
under the Federal Employees' Retirement System (FERS). Part 848
establishes the eligibility requirements for making an election of
phased retirement, the procedures for electing phased retirement, the
requirements for agencies to notify OPM of phased retirement actions,
and the methodology OPM intends to use to compute phased retirement
annuities under 5 U.S.C. 8412a.
Sections 848.101 through 848.103 explain the purpose and scope of
the regulations, define terms used in part 848, and provide that the
Director of OPM may issue implementing directives regarding the phased
retirement program. In particular, Sec. 848.102 provides a definition
of ``full-time.'' This definition does not include certain categories
of full-time employees listed in the definition of ``full-time
service'' in Sec. 842.402--namely, certain firefighters compensated
under 5 U.S.C. 5545b and certain employees with less-than-full-time
schedules who are deemed to be full-time employees by express provision
of law (e.g., nurses with special work schedules under 38 U.S.C. 7456
or 7456A). Employees with these special work schedules may not elect
phased retirement, since regularly recurring part-time employment is
not a possibility under the applicable law. (Almost all firefighters
compensated under 5 U.S.C. 5545b would also be ineligible for phased
retirement on the additional basis that they are eligible for an early
and enhanced retirement with mandatory separation provisions.)
Section 848.201 sets out the eligibility requirements for entering
phased retirement. Eligibility for phased retirement is limited to
employees who have been employed on a full-time basis for not less than
the 3-year period ending on the effective date of the employee's
election of phased retirement. Under FERS, these employees must also be
eligible for immediate retirement with at least 30 years of service at
their minimum retirement age, or with 20 years of service at age 60.
Employees who do not meet these requirements will be excluded from
electing phased retirement.
For the purposes of phased retirement, a retirement-eligible
employee is an employee who, if separated from the service, would meet
the requirements for retirement under subsection (a) or (b) of 5 U.S.C.
8412. As discussed above, a retirement-eligible employee will not
include an employee subject to mandatory retirement, with limited
exceptions. There is no reason for such employees to wish to
participate in phased retirement because 5 U.S.C. 8412a requires that
the phased retirement computations be made using the general formula
applicable to regular employee service.
In addition, since the phased retirement law requires that an
employee be converted from full-time to part-time, Sec. 848.201 makes
clear that phased retirement may not be elected by employees covered by
a special work schedule authority that does not allow for a regularly
recurring part-time schedule, such as a firefighter covered by 5 U.S.C.
5545b or a nurse covered by 38 U.S.C. 7456 or 7456A.
Section 848.202 describes how ``working percentage'' would be
defined. The law uses the term ``working percentage'' to refer to the
percentage of a full-time schedule that a phased retiree would be
scheduled to work. The statute permits a working percentage of 50
percent- that is, a half-time work schedule--and contemplates
additional working percentages, at OPM's discretion. Although a working
percentage of 50 percent would be the only working percentage permitted
under Sec. 848.202, the section has been drafted using general
descriptive language to easily allow OPM to amend the regulations in
the future to allow working percentages other than 50 percent, if and
when OPM determines that such an amendment is appropriate. Unless and
until OPM evaluates the phased retirement program and publishes
regulations permitting a different ``working percentage,'' a phased
retiree will not be permitted to have a working percentage other than
50 percent. Section 848.202 defines ``working percentage'' as the
percentage of full-time equivalent employment equal to the quotient
obtained by dividing (1) the number of officially established hours per
pay period to be worked by a phased retiree by (2) the number of hours
per pay period to be worked by an employee serving in a comparable
position on a full-time basis. In other words, the number of hours per
pay period in a phased retiree's officially established part-time work
schedule must equal one-half the number of hours the phased retiree
would have worked had the phased retiree remained in a full-time work
schedule and not elected to enter phased retirement status. The phased
retiree's officially established part-time work schedule excludes any
additional
[[Page 33917]]
(excess) hours worked under the special exception authority in Sec.
848.205(j).
Sections 848.203 through 848.205 set out the requirements for an
employee to elect phased retirement, establish the effective date of
phased employment and the commencing date of phased annuity, and state
the effect of phased retirement. Section 848.203 provides that an
authorized agency official must give the potential phased retiree
written approval for the change. Section 848.203(d) allows an agency to
establish a time limit on the phased retirement election of any
employee as a condition of approving the election to phased retirement.
To implement such a time limit, the agency and the employee requesting
phased retirement must complete a written and signed agreement. The
agency is responsible for drafting an agreement that meets the
requirements enumerated in Sec. 848.203(d)(3). The agency is also
responsible for defending any challenges to an agreement made with an
employee under Sec. 848.203(d). The election must be accompanied by a
retirement application, in accordance with Sec. 841.202.
Section 848.205(a)(1) provides, consistent with 5 U.S.C. 8412a(i),
that a phased retiree is deemed to be a full-time employee for the
purpose of the Federal Employees Health Benefits Program. Section
848.205(a)(2) has provisions for determining the amount of deemed basic
pay and the deemed full-time schedule for determining Federal
Employees' Life Insurance benefits and premiums. Any premium pay
normally creditable as basic pay under 5 CFR 870.204 for overtime work
outside of a full-time schedule may not be considered in determining a
phased retiree's deemed annual rate of basic pay for life insurance
purposes. A conforming change is also being made to 5 CFR 870.204.
Section 848.205(j) describes the conditions under which a phased
retiree may, in rare and exceptional circumstances, work hours in
excess of officially established hours, as well as related agency
responsibilities and OPM authorities. The limitations and controls on
excess hours are necessary and proper to carry out the intent of the
phased retirement law and ensure that phased retirees do not work
significant hours beyond the working percentage used to compute the
phased retirement annuity. In promulgating Sec. 848.205(j), we are
relying on OPM's broad regulatory authority in 5 U.S.C. 8461(g), as
well as the authority in 5 U.S.C. 8412a(b)(1) to prescribe regulations
governing the phased retirement resulting from employee elections.
Sections 848.301 through 848.303 describe how a phased retiree may
return to regular employment status, the effective date of the decision
to end phased retirement, and what happens to the phased annuity as a
result of returning to a regular employment status. Section 848.301(a)
provides that an authorized agency official must give the phased
retiree written permission to return to regular employment on a form
prescribed by OPM. With an authorized agency official's approval, the
employee may enter into any type of work schedule after returning to
regular employment. When an individual in phased retirement status
returns to regular employment status, the phased retirement annuity
terminates; therefore, agencies are required to immediately notify OPM
of these changes to prevent improper payments. Section 848.301(b) also
includes provisions concerning the return of a phased retiree to
regular employment status. For a phased retiree who returns to regular
employment under Sec. 848.301(a) and (b), Sec. 848.303 provides that
the period of phased employment will be treated as a period of part-
time service under chapter 84 of title 5, United States Code.
Consistent with 5 U.S.C. 8412a(g)(3), the phased retirement period will
be deemed to have been a period of part-time employment with the work
schedule described in Sec. 848.202. The part-time proration adjustment
will be based upon the individual's officially established part-time
work schedule, with no credit for extra hours worked. In determining
the individual's deemed rate of basic pay during the phased retirement
period, only basic pay for hours within the individual's officially
established part-time work schedule may be considered. No pay received
for other hours during the phased retirement period may be included as
part of basic pay for the purpose of computing retirement benefits,
notwithstanding the normally applicable rules. A phased retiree who
returns to regular employee status would not be entitled to a composite
retirement annuity upon subsequent retirement; the employee's rights
under subchapter III of chapter 83 or chapter 84 of title 5, United
States Code, would be determined based on the law in effect at the time
of any subsequent separation from service.
Sections 848.401 and 848.402 describe how an employee may elect to
fully retire and how OPM will determine the commencing date of the
employee's composite retirement annuity. These sections also discuss
how OPM will treat an employee who has separated from phased employment
and the criteria by which OPM will either continue to pay a phased
retirement annuity or terminate payment as required by law.
Sections 848.501 through 848.503 cover how OPM intends to compute
the phased retirement annuity and the composite annuity payable at full
retirement under FERS. Section 848.501 provides that the phased
retirement annuity equals (1) the amount of annuity computed under 5
U.S.C. 8412 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, (2) adjusted
by the phased retirement percentage for the phased retiree. Phased
retirement annuities will be subject to FERS cost-of-living adjustment
provisions. Section 848.502 establishes the computation of the
composite retirement annuity. Subject to any reduction to provide a
survivor annuity, the composite retirement annuity consists of the
phased retirement annuity, increased by cost-of-living adjustments,
plus the ``fully retired phased component.'' The ``fully retired phased
component'' is (1) the amount of an annuity computed under 5 U.S.C.
8412 that would have been payable at the time of full retirement if the
individual had not elected phased retirement status and as if the
individual was employed on a full-time basis in the position occupied
during the phased retirement period and before any reduction for
survivor annuity multiplied by (2) the working percentage. Section
831.502(b) establishes rules for deemed full-time and deemed basic pay
for the purposes of computing the ``fully retired phased component.''
The law requires phased retirees to be deemed to be full-time for the
purpose of determining basic pay for life insurance and composite
annuity, and also limits pay subject to retirement deductions based on
the concept of full-time. For those purposes, we have taken a
consistent approach of defining full-time to be 40 hours a week and to
exclude overtime hours; thus, any pay for overtime hours (hours beyond
the full-time schedule--which normally should not be worked by a phased
retiree) is not considered basic pay for life insurance or retirement
purposes. The deemed full-time schedule is five 8-hour workdays each
workweek, resulting in a 40-hour workweek, consistent with other
provisions in the regulations. In determining the individual's deemed
rate of basic pay during phased retirement, only basic pay for hours
within the deemed full-
[[Page 33918]]
time schedule will be considered for the computation of the composite
retirement annuity at full retirement. Similarly, Sec. Sec. 848.301
and 848.701 include provisions concerning deemed part-time (see
discussion of those sections).
Section 848.504 specifically states that FERS phased retirees will
not receive an annuity supplement under 5 U.S.C. 8421.
Sections 848.601 and 848.602 describe how OPM intends to treat
civilian deposits and redeposits as well as military service deposits.
Section 848.601 states that deposits for civilian service for which no
retirement deductions were withheld and redeposits owed for civilian
service previously refunded to the employee must be paid within 30 days
of the employee receiving OPM's notice. Deposits and redeposits will
not be possible at the point where a phased retiree elects to enter
full retirement status. Section 848.602 refers specifically to how OPM
will treat military service deposits, whether for military service
prior to phased retirement or military service after phased retirement
begins.
Sections 848.701 through 848.703 set out how OPM plans to
administer death benefits for employees who die while in phased
retirement and for employees who die after separation from phased
employment without having submitted an application for a composite
retirement annuity. Consistent with 5 U.S.C. 8412a(h)(2), Sec.
848.701(a)(2) provides that when a phased retiree dies in service, the
phased retiree is deemed to have had a part-time schedule consistent
with the working percentage. Any hours beyond that part-time schedule
and any pay associated with such hours would not be creditable for
retirement purposes.
Section 848.801 addresses reemployment of an individual who has
separated from phased employment and who dies before submitting an
application for a composite retirement annuity.
Section 848.901, as provided by MAP-21, requires a FERS phased
retiree (other than an employee of the U.S. Postal Service) to spend at
least 20 percent of his or her working hours in mentoring activities.
It is up to the phased retiree's employing agency to determine what
types of mentoring activities satisfy this requirement and how to
ensure this requirement is being fulfilled. The phased retiree may
mentor one or more employees of the agency and need not mentor the same
employees throughout the period of phased retirement. Although it would
clearly be desirable in many instances for the phased retiree to mentor
the employee or employees who are expected to assume his or her duties
when the phased retiree fully retires, the law does not provide that
this is the only way to implement the mentoring requirement. An
authorized agency official may waive the mentoring requirement in the
event of an emergency or other unusual circumstances that would make it
impracticable (such as when the phased retiree is called to active duty
military service). OPM expects waivers of the mentoring requirement to
be very rare.
Other Technical Conforming Amendments to Existing Regulations
Because a phased retiree is both an annuitant and an employee, and
is treated as an annuitant for some purposes, but an employee for
others, certain regulatory changes are necessary to inform agencies and
employees about how phased retirement is structured, how the phased
retirement annuity and the composite annuity will be computed, and how
certain benefits and obligations will be treated during and after
phased retirement.
Part 831
The Civil Service Retirement System (CSRS) regulations located in
part 831 are being updated where specific references to phased
retirement are necessary as a result of the passage of MAP-21. The
authority to update part 831 is found in title 5, United States Code,
section 8336a. Therefore, OPM is updating certain definitions and
cross-references to the new phased retirement provisions which will be
located in subpart Q.
In Sec. 831.402 we propose to revise the definition of ``applicant
for retirement'' and add a definition of ``phased retiree.'' Section
831.501, pertaining to the time for filing applications for retirement,
is amended to include a reference to subpart Q for employees and
agencies considering phased retirement. We also are inserting in Sec.
831.701 a cross-reference regarding the effective date of an annuity
with a phased retirement component. In Sec. 831.703, under which we
compute part-time service, we propose to clarify the definition of
``full-time service'' by specifically describing categories of full-
time employees. While this definition is outside the phased retirement
area, we are taking this opportunity to make applicable paragraphs
consistent with the clearer language in the definition of ``full-time''
in the phased retirement regulations in subpart Q. (See Sec.
831.1702.)
Part 838
OPM is proposing amendments to 5 CFR part 838, concerning court
orders affecting retirement benefits, to allow a court order acceptable
for processing that is directed at employee annuity to apportion phased
retirement annuity or composite retirement annuity between an employee
and his or her former spouse.
Section 838.103 would be amended by changing and adding definitions
relating to phased retirement. These changes include (1) defining
``employee annuity'' to include recurring payments of phased retirement
annuity and composite retirement annuity; (2) defining ``gross
annuity,'' ``net annuity,'' and ``self-only annuity'' as including
phased retirement annuity amounts paid to phased retirees; and (3)
defining ``retiree'' to include a phased retiree who has entered full
retirement status.
Section 838.211 would be amended by adding paragraph (b), which
would subject phased retirement annuity to division by a court order
acceptable for processing.
Sections 838.222, 838.232, 838.233, and 838.237 are being amended
by including references to phased retirees and phased retirement.
Section 838.242(b) would be amended to conform to the rule at
Sec. Sec. 831.1742 and 848.502 concerning crediting unused sick leave
in the computation of a composite retirement annuity.
Section 838.305(e) would be amended by adding language providing
that a court order directed at the division of phased retirement
annuity or composite retirement annuity is not a court order acceptable
for processing if it includes unacceptable instructions concerning the
computation of an employee's salary or average salary.
Section 838.306 would be revised to allow a court order to include
express provisions specifically directed at division of phased
retirement annuity, composite retirement annuity, or annuity payable to
an employee who retires without having elected phased retirement
status. Paragraph (b) of Sec. 838.306 would be amended to provide
that, unless a court order otherwise directs, OPM will apply to gross
annuity a formula, percentage, or fraction directed at annuity payable
to either a retiree or a phased retiree. Paragraph (c)(2) of Sec.
838.306 would provide that for a court order to separately provide for
division of phased retirement annuity or composite retirement annuity,
a provision of a court order must expressly state that it is directed
at ``phased retirement annuity'' or ``composite retirement annuity,''
and
[[Page 33919]]
should state the type of annuity to be divided (e.g., ``net phased
retirement annuity''). If such a provision is unclear as to whether it
is directed at gross, net, or self-only phased retirement annuity or
composite retirement annuity, the provision will be applied to gross
phased retirement annuity or gross composite retirement annuity, as
described in Sec. 838.306(b). Paragraph (c)(3) of Sec. 838.306 would
provide that unless a court order expressly states that phased
retirement annuity or composite retirement annuity is not to be
divided, a court order meeting the requirements of Sec. 838.306(a) and
that generally provides for division of annuity without meeting the
requirements of paragraph (c)(2), regarding the specific type of
annuity being divided, will be applied to divide any employee annuity,
including phased retirement annuity and composite retirement annuity.
Thus, paragraph (c)(3) of Sec. 838.306 would allow OPM to honor
provisions in court orders on file with OPM, which were issued before
MAP-21 was enacted. Parties to a divorce could also submit a new court
order providing for a different apportionment of annuity than provided
under Sec. 838.306(c)(3).
Sections 838.612, 838.621, and 838.622 would be amended to add
references to phased retirement annuity and composite retirement
annuity.
Section 838.623 would be amended to add references to phased
retirement annuity and composite retirement annuity. Paragraph (e) of
Sec. 838.623 would provide that a court order directed at phased
retirement annuity or a composite retirement annuity cannot limit the
computation and division of a phased retirement annuity or composite
retirement annuity to a particular period of employment or service. The
amount of service that is included in the computation of phased
retirement annuity and composite retirement annuity is established by
statute. Any adjustment in a court order of the division of annuity
will have to be accomplished through other means.
Appendix A to subpart F of 5 CFR part 838, has been amended by
adding model paragraphs for dividing phased retirement annuity and
composite retirement annuity.
Section 838.803 would be amended by adding paragraph (c), which
would provide that a court order that attempts to award a former spouse
survivor annuity based on a phased retirement annuity or to reduce a
phased retirement annuity to provide survivor benefits is not a court
order acceptable for processing.
Section 838.806(d)(2) would be amended to allow a former spouse
survivor annuity to be awarded or a change to an award of a former
spouse survivor annuity during an employee's phased retirement status,
before the commencing date of a composite retirement annuity.
Section 838.807 would be amended to make it clear that only
employee annuity payable to a retiree and not a phased retiree is
subject to reduction to provide a survivor annuity.
Sections 838.1111 would be amended to make phased retirement
annuities subject to child abuse judgment enforcement orders.
Part 841
The Federal Employees' Retirement System (FERS) regulations located
in parts 841, 842, and 843 are being updated where specific references
to phased retirement are necessary as a result of the passage of MAP-
21. The authority for these updates is found in title 5, United States
Code, section 8412a. Therefore, OPM is updating certain definitions and
cross-references to the new phased retirement provisions which will be
located in part 848.
In Sec. 841.102, we add references to parts 848 and part 850. In
Sec. 841.104 we revise how we define special terms throughout the
regulations pertaining to FERS in parts 841 through 850.
Part 842
The definition of ``full-time service'' in Sec. 842.402, under
which we compute part-time service, would be clarified by specifically
describing categories of full-time employees. While this definition is
outside the phased retirement area, we are taking this opportunity to
make applicable paragraphs consistent with the clearer language in the
definition of ``full-time'' in the phased retirement regulations in
part 848. (See Sec. 848.102.)
Part 843
In Sec. 843.202 we are revising paragraph (b) to reflect the
change in law affecting the consequences of employee refunds.
Part 870
The change to Sec. 870.101 clarifies that, for FEGLI purposes, the
date of retirement for a phased retiree is the date the individual
enters full retirement status.
The proposed rules provide in Sec. 870.204, for a phased retiree,
the annual rate of pay used to calculate Basic and Optional coverage
amounts is the full-time basic pay rate as fixed by applicable law and
regulation for the position in which the individual serves.
Part 890
The changes to Sec. 890.101 provide that in the case of a phased
retiree, a composite retirement annuity is an immediate annuity for
purposes of eligibility to continue FEHB into retirement. This
clarifies that a phased retiree who retires on a composite retirement
annuity must meet the requirement to retire on an immediate annuity in
order to continue FEHB coverage into retirement.
The proposed rules provide that, for a phased retiree, the FEHB
Government contribution amount is the full-time employer contribution
as fixed by applicable law and regulation for the position in which the
individual serves. These changes can be found in Sec. 890.501(h).
Executive Order 13563 and Executive Order 12866
The Office of Management and Budget has reviewed this rule in
accordance with E.O. 13563 and E.O. 12866.
Regulatory Flexibility Act
I certify that this regulation will not have a significant economic
impact on a substantial number of small entities because the regulation
will only affect retirement payments to Federal employees who elect
phased retirement status.
List of Subjects
5 CFR Part 581
Alimony, Child support, Government employees, Wages.
5 CFR Part 582
Claims, Government employees, Wages.
5 CFR Part 831
Administrative practice and procedure, Alimony, Claims, Disability
benefits, Firefighters, Government employees, Income taxes,
Intergovernmental relations, Law enforcement officers, Pensions,
Reporting and recordkeeping requirements, Retirement.
5 CFR Part 838
Alimony, Claims, Courts, Government employees, Pensions,
Retirement.
5 CFR Part 841
Administrative practice and procedure, Air traffic controllers,
Claims, Disability benefits, Firefighters, Government employees, Income
taxes, Intergovernmental relations, Law enforcement officers, Pensions,
Retirement.
5 CFR Part 842
Air traffic controllers, Alimony, Firefighters, Government
employees,
[[Page 33920]]
Law enforcement officers, Pensions, Retirement.
5 CFR Part 843
Air traffic controllers, Disability benefits, Firefighters,
Government employees, Law enforcement officers, Pensions, Retirement.
5 CFR Part 848
Air traffic controllers, Alimony, Firefighters, Government
employees, Law enforcement officers, Pensions, Retirement.
5 CFR Part 870
Administrative practice and procedure, Government employees,
Hostages, Iraq, Kuwait, Lebanon, Life insurance, Retirement.
5 CFR Part 890
Administrative practice and procedure, Government employees, Health
facilities, Health insurance, Health professions, Hostages, Iraq,
Kuwait, Lebanon, Military personnel, Reporting and recordkeeping
requirements, Retirement.
Office of Personnel Management.
Elaine Kaplan,
Acting Director.
For the reasons discussed in the preamble, the Office of Personnel
Management is proposing to amend 5 CFR parts 581, 582, 831, 838, 841,
842, 843, 870, and 890 and add a new part 848 as follows:
PART 581--PROCESSING GARNISHMENT ORDERS FOR CHILD SUPPORT AND/OR
ALIMONY
0
1. The authority citation for part 581 is revised to read as follows:
Authority: 42 U.S.C. 659; 15 U.S.C. 1673; E.O. 12105 (43 FR
59465 and 3 CFR 262)(1979). Secs. 581.102 and 581.306 also issued
under 5 U.S.C. 8336a and 8412a.
0
2. Amend Sec. 581.102 to add paragraphs (l) and (m) to read as
follows:
Sec. 581.102 Definitions.
* * * * *
(l) Phased retirement status has the same meaning given that term
in Sec. 838.103 of this chapter; and
(m) Phased retirement annuity has the same meaning given that term
in Sec. 838.103 of this chapter.
0
3. Amend Sec. 581.306 by revising the section heading and by adding
paragraph (d) to read as follows:
Sec. 581.306 Lack of moneys due from, or payable by, a governmental
entity served with legal process; transfer of service of legal process
to another governmental entity.
* * * * *
(d) In instances where an employee obligor, who is employed by a
governmental entity which is honoring a continuing legal process,
enters phased retirement status in accordance with part 831, subpart Q,
and part 848 of this chapter, the entity must inform the party who
caused the legal process to be served, or the party's representative,
and the court or other authority, that remuneration for employment will
continue at a reduced rate and that the employee obligor will be
receiving a phased retirement annuity. The governmental entity must
provide the party with the designated agent at the Office of Personnel
Management who is responsible for the disbursement of retirement
benefits.
PART 582--COMMERCIAL GARNISHMENT OF FEDERAL EMPLOYEES' PAY
0
4. The authority citation for part 582 is revised to read as follows:
Authority: 5 U.S.C. 5520a; 15 U.S.C. 1673; E.O. 12897; Sec.
582.102 also issued under 5 U.S.C. 8336a and 8412a.
0
5. Amend Sec. 582.102 by revising paragraph (2) to read as follows:
Sec. 582.102 Definitions.
* * * * *
(2) Employee or employee-obligor means an individual who is
employed by an agency as defined in this section, including a
reemployed annuitant, an individual engaged in phased employment as
defined in part 831, subpart Q, and part 848 of this chapter, and a
retired member of the uniformed services who is employed by an agency.
Employee does not include a retired employee, a member of the uniformed
services, a retired member of the uniformed services, or an individual
whose service is based on a contract, including an individual who
provides personal services based on a contract with an agency.
* * * * *
PART 831--RETIREMENT
0
6. The authority citation for part 831 is revised to read as follows:
Authority: 5 U.S.C. 8347; Sec. 831.102 also issued under 5
U.S.C. 8334; Sec. 831.106 also issued under 5 U.S.C. 552a; Sec.
831.108 also issued under 5 U.S.C. 8336(d)(2); Sec. 831.114 also
issued under 5 U.S.C. 8336(d)(2), and Sec. 1313(b)(5) of Pub. L.
107-296, 116 Stat. 2135; Sec. 831.201(b)(1) also issued under 5
U.S.C. 8347(g); Sec. 831.201(b)(6) also issued under 5 U.S.C.
7701(b)(2); Sec. 831.201(g) also issued under Secs. 11202(f),
11232(e), and 11246(b) of Pub. L. 105-33, 111 Stat. 251; Sec.
831.201(g) also issued under Secs. 7(b) and (e) of Pub. L. 105-274,
112 Stat. 2419; Sec. 831.201(i) also issued under Secs. 3 and 7(c)
of Pub. L. 105-274, 112 Stat. 2419; Sec. 831.204 also issued under
Sec. 102(e) of Pub. L. 104-8, 109 Stat. 102, as amended by Sec. 153
of Pub. L. 104-134, 110 Stat. 1321; Sec. 831.205 also issued under
Sec. 2207 of Pub. L. 106-265, 114 Stat. 784; Sec. 831.206 also
issued under Sec. 1622(b) of Pub. L. 104-106, 110 Stat. 515; Sec.
831.301 also issued under Sec. 2203 of Pub. L. 106-265, 114 Stat.
780; Sec. 831.303 also issued under 5 U.S.C. 8334(d)(2) and Sec.
2203 of Pub. L. 106-235, 114 Stat. 780; Sec. 831.502 also issued
under 5 U.S.C. 8337, and under Sec. 1(3), E.O. 11228, 3 CFR 1965-
1965 Comp. p. 317; Sec. 831.663 also issued under 5 U.S.C. 8339(j)
and (k)(2); Secs. 831.663 and 831.664 also issued under Sec.
11004(c)(2) of Pub. L. 103-66, 107 Stat. 412; Sec. 831.682 also
issued under Sec. 201(d) of Pub. L. 99-251, 100 Stat. 23; Sec.
831.912 also issued under Sec. 636 of Appendix C to Pub. L. 106-554,
114 Stat. 2763A-164; Subpart P also issued under Sec. 535(d) of
Title V of Division E of Pub. L. 110-161, 121 Stat. 2042; Subpart Q
also issued under 5 U.S.C. 8336a; Subpart V also issued under 5
U.S.C. 8343a and Sec. 6001 of Pub. L. 100-203, 101 Stat. 1330-275;
Sec. 831.2203 also issued under Sec. 7001(a)(4) of Public Law 101-
508, 104 Stat. 1388-328.
0
7. Amend Sec. 831.303 by revising paragraph (c)(1) to read as follows:
Sec. 831.303 Civilian service.
* * * * *
(c)(1)(i) An employee or Member whose retirement is based on a
separation before October 28, 2009, and who has not completed payment
of a redeposit for refunded deductions based on a period of service
that ended before October 1, 1990, will receive credit for that service
in computing the nondisability annuity for which the individual is
eligible under subchapter III of chapter 83 of title 5, United States
Code, provided the nondisability annuity commences after December 1,
1990; and
(ii) An employee or Member whose retirement is based on a
separation on or after October 28, 2009, and who has not completed
payment of a redeposit for refunded deductions based on a period of
service that ended before March 1, 1991, will receive credit for that
service in computing the nondisability annuity for which the individual
is eligible under subchapter III of chapter 83 of title 5, United
States Code.
* * * * *
0
8. Amend Sec. 831.402 to revise the definition of ``applicant for
retirement'' and to add the definitions of ``full
[[Page 33921]]
retirement status'', and ``phased retiree'' in alphabetical order as
follows:
Sec. 831.402 Definitions.
* * * * *
Applicant for retirement means a person who is currently eligible
to retire under CSRS on an immediate or deferred annuity, and who has
filed an application to retire, other than an application for phased
retirement status, that has not been finally adjudicated.
* * *
Full retirement status means the status of a phased retiree who has
ceased employment and is entitled, upon application, to a composite
retirement annuity.
* * *
Phased retiree means a retirement-eligible employee who--
(1) Has entered phased retirement status under subpart Q of this
part; and
(2) Has not entered full retirement status.
* * * * *
0
9. Amend Sec. 831.403 by revising paragraph (a) to read as follows:
Sec. 831.403 Eligibility to make voluntary contributions.
(a) Voluntary contributions may be made only by--
(1) Employees (including phased retirees) or Members currently
subject to CSRS, and
(2) Applicants for retirement, including phased retirees who apply
for full retirement status under subpart Q of this part.
* * * * *
0
10. Revise Sec. 831.501 to read as follows:
Sec. 831.501 Time for filing application.
An employee or Member who is eligible for retirement must file a
retirement application with his or her agency. A former employee or
Member who is eligible for retirement must file a retirement
application with OPM. The application should not be filed more than 60
days before becoming eligible for benefits. If the application is for
disability retirement, the applicant and the employing agency should
refer to subpart L of this part. If the application is for phased
retirement status, the employee and the employing agency should refer
to subpart Q of this part.
0
11. Amend Sec. 831.701 as follows:
0
a. Revise paragraph (a) introductory text;
0
b. Redesignate paragraphs (d) through (f) as paragraphs (e) through
(g);
0
c. Add paragraph (d).
Sec. 831.701 Effective dates of annuities.
(a) Except as provided in paragraphs (b) through (d) of this
section, an annuity of an employee or Member commences on the first day
of the month after--
* * * * *
(d) A phased retirement annuity and a composite retirement annuity
granted to an employee under section 8336a of title 5, United States
Code, and defined under Sec. 831.1702, commences as provided in
subpart Q of this part.
* * * * *
0
12. Amend Sec. 831.703 to revise the definition of ``full-time
service'' in paragraph (b) as follows:
Sec. 831.703 Computation of annuities for part-time service.
* * * * *
(b) * * *
Full-time service means service performed by an employee who has--
(1) An officially established recurring basic workweek consisting
of 40 hours within the employee's administrative workweek (as
established under Sec. 610.111 of this chapter or similar authority);
(2) An officially established recurring basic work requirement of
80 hours per biweekly pay period (as established for employees with a
flexible or compressed work schedule under 5 U.S.C. chapter 61,
subchapter II, or similar authority);
(3) For a firefighter covered by 5 U.S.C. 5545b(b) who does not
have a 40-hour basic workweek, a regular tour of duty averaging at
least 106 hours per biweekly pay period; or
(4) A work schedule that is considered to be full-time by express
provision of law, including a work schedule established for certain
nurses under 38 U.S.C. 7456 or 7456A that is considered by law to be a
full-time schedule for all purposes.
* * * * *
0
13. Add subpart Q to part 831 to read as follows:
Subpart Q--Phased Retirement
Sec.
831.1701 Applicability and purpose.
831.1702 Definitions.
831.1703 Implementing directives.
Entering Phased Retirement
831.1711 Eligibility.
831.1712 Working percentage and officially established hours for
phased employment.
831.1713 Application for phased retirement.
831.1714 Effective date of phased employment and phased retirement
annuity commencing date.
831.1715 Effect of phased retirement.
Returning to Regular Employment Status
831.1721 Ending phased retirement status to return to regular
employment status.
831.1722 Effective date of end of phased retirement status to return
to regular employment status.
831.1723 Effect of ending phased retirement status to return to
regular employment status.
Entering Full Retirement Status
831.1731 Application for full retirement status.
831.1732 Commencing date of composite retirement annuity.
Computation of Phased Retirement Annuity at Phased Retirement and
Composite Retirement Annuity at Full Retirement
831.1741 Computation of phased retirement annuity.
831.1742 Computation of composite annuity at final retirement.
831.1743 Cost-of-living adjustments.
Opportunity of a Phased Retiree to Pay a Deposit or Redeposit for
Civilian or Military Service
831.1751 Deposit for civilian service for which no retirement
deductions were withheld and redeposit for civilian service for
which retirement deductions were refunded to the individual.
831.1752 Deposit for military service.
831.1753 Civilian and military service of an individual affected by
an erroneous retirement coverage determination.
Death Benefits
831.1761 Death of phased retiree during phased employment.
831.1762 Death of an individual who has separated from phased
employment and who dies before submitting an application for a
composite retirement annuity.
831.1763 Lump-sum credit.
Reemployment After Separation From Phased Retirement Status
831.1771 Reemployment of an individual who has separated from phased
employment and who dies before submitting an application for a
composite retirement annuity.
Mentoring
831.1781 Mentoring.
Subpart Q--Phased Retirement
Sec. 831.1701 Applicability and purpose.
This subpart contains the regulations implementing provisions of 5
U.S.C. 8336a authorizing phased retirement. This subpart establishes
the eligibility requirements for making an election to enter phased
retirement status, the procedures for making an election, the record-
keeping requirements, and the methods to be used for certain
computations not addressed elsewhere in part 831.
Sec. 831.1702 Definitions.
In this subpart--
Authorized agency official means--
[[Page 33922]]
(1) For the executive branch agencies, the head of an Executive
agency as defined in 5 U.S.C. 105;
(2) For the legislative branch, the Secretary of the Senate, the
Clerk of the House of Representatives, or the head of any other
legislative branch agency;
(3) For the judicial branch, the Director of the Administrative
Office of the U.S. Courts;
(4) For the Postal Service, the Postmaster General;
(5) For any other independent establishment that is an entity of
the Federal Government, the head of the establishment; or
(6) An official who is authorized to act for an official named in
paragraphs (1) through (5) of this definition in the matter concerned.
Composite retirement annuity means the annuity computed when a
phased retiree attains full retirement status.
Director means the Director of the Office of Personnel Management.
Full retirement status means that a phased retiree has ceased
employment and is entitled, upon application, to a composite retirement
annuity.
Full-time means--
(1) An officially established recurring basic workweek consisting
of 40 hours within the employee's administrative workweek (as
established under Sec. 610.111 of this chapter or similar authority);
or
(2) An officially established recurring basic work requirement of
80 hours per biweekly pay period (as established for employees with a
flexible or compressed work schedule under 5 U.S.C. chapter 61,
subchapter II, or similar authority).
Phased employment means the less-than-full-time employment of a
phased retiree.
Phased retiree means a retirement-eligible employee who--
(1) With the concurrence of an authorized agency official, enters
phased retirement status; and
(2) Has not entered full retirement status.
Phased retirement annuity means the annuity payable under 5 U.S.C.
8336a before full retirement.
Phased retirement percentage means the percentage which, when added
to the working percentage for a phased retiree, produces a sum of 100
percent.
Phased retirement period means the period beginning on the date on
which an individual becomes entitled to receive a phased retirement
annuity and ending on the date on which the individual dies or
separates from phased employment.
Phased retirement status means that a phased retiree is
concurrently employed in phased employment and eligible to receive a
phased retirement annuity.
Working percentage has the meaning given that term in Sec.
831.1712(a).
Sec. 831.1703 Implementing directives.
The Director may prescribe, in the form he or she deems
appropriate, such detailed procedures as are necessary to carry out the
purpose of this subpart.
Entering Phased Retirement
Sec. 831.1711 Eligibility.
(a) A retirement-eligible employee, as defined in paragraphs (b)
and (c), may elect to enter phased retirement status if the employee
has been employed on a full-time basis for not less than the 3-year
period ending on the effective date of phased retirement status, under
Sec. 831.1714(a).
(b) Except as provided in paragraph (c) of this section, a
retirement-eligible employee means an employee who, if separated from
the service, would meet the requirements for retirement under
subsection (a) or (b) of 5 U.S.C. 8336.
(c) A retirement-eligible employee does not include--
(1) A member of the Capitol Police or Supreme Court Police, or an
employee occupying a law enforcement officer, firefighter, nuclear
materials courier, air traffic controller, or customs and border
protection officer position, except a customs and border protection
officer who is exempt from mandatory separation and retirement under 5
U.S.C. 8335 pursuant to section 535(e)(2)(A) of Division E of the
Consolidated Appropriations Act, 2008, Public Law 110-161;
(2) An individual eligible to retire under 5 U.S.C. 8336(c), (m),
or (n); or
(3) An employee covered by a special work schedule authority that
does not allow for a regularly recurring part-time schedule, such as a
firefighter covered by 5 U.S.C. 5545b or a nurse covered by 38 U.S.C.
7456 or 7456A.
Sec. 831.1712 Working percentage and officially established hours for
phased employment.
(a) For the purpose of this subpart, working percentage means the
percentage of full-time equivalent employment equal to the quotient
obtained by dividing--
(1) The number of officially established hours per pay period to be
worked by a phased retiree, as described in paragraph (b) of this
section; by
(2) The number of hours per pay period to be worked by an employee
serving in a comparable position on a full-time basis.
(b) The number of officially established hours per pay period to be
worked by an employee in phased retirement status must equal one-half
the number of hours the phased retiree would have been scheduled to
work had the phased retiree remained in a full-time work schedule and
not elected to enter phased retirement status. These hours make up the
officially established part-time work schedule of the phased retiree
and exclude any additional hours worked under Sec. 831.1715(h).
Sec. 831.1713 Application for phased retirement.
(a) To elect to enter phased retirement status, a retirement-
eligible employee covered by Sec. 831.1711 must--
(1) Submit to an authorized agency official a written and signed
request to enter phased employment, on a form prescribed by OPM;
(2) Obtain the signed written approval of an authorized agency
official to enter phased employment; and
(3) File an application for phased retirement, in accordance with
Sec. 831.104.
(b) Except as provided in paragraph (c) of this section, an
applicant for phased retirement may withdraw his or her application any
time before the election becomes effective, but not thereafter.
(c) An applicant for phased retirement may not withdraw his or her
application after OPM has received a certified copy of a court order
(under part 581 or part 838 of this chapter) affecting the benefits.
(d) (1) An employee and an agency approving official may agree to a
time limit to the employee's period of phased employment as a condition
of approval of the employee's request to enter phased employment and
phased retirement, or by mutual agreement after the employee enters
phased employment status.
(2) To enter into such an agreement, the employee and the approving
official must complete a written and signed agreement.
(3) The written agreement must include the following:
(i) The date the employee's period of phased employment will
terminate;
(ii) A statement that the employee can request the approving
official's permission to return to regular employment status at any
time as provided in Sec. 831.1721; the agreement must also explain how
returning to regular employment status would affect the employee, as
described in Sec. Sec. 831.1721 through 831.1723.
(iii) A statement that the employee has a right to elect to fully
retire at any time as provided in Sec. 831.1731;
(iv) A statement that the employee may accept a new appointment at
[[Page 33923]]
another agency, with or without the new agency's approval of phased
employment, at any time before the expiration of the agreement or
within 3 days of the expiration of the agreement; the agreement must
also explain how accepting an appointment at a new agency as a regular
employee would affect the employee, as described in Sec. Sec. 831.1721
through 831.1723;
(v) An explanation that when the agreed term of phased employment
ends, the employee will be separated from employment and that such
separation will be considered voluntary based on the written agreement;
and
(vi) An explanation that if the employee is separated from phased
employment and is not employed within 3 days (i.e., the employee has a
break in service of greater than 3 days), the employee will be deemed
to have elected full retirement.
(4) The agency approving official and the employee may rescind an
existing agreement, or enter into a new agreement to extend or reduce
the term of phased employment agreed to in an existing agreement, by
entering into a new written agreement meeting the requirements of this
paragraph, before the expiration of the agreement currently in effect.
Sec. 831.1714 Effective date of phased employment and phased
retirement annuity commencing date.
(a) Phased employment is effective the first day of the first pay
period beginning after phased employment is approved by the authorized
agency official under Sec. 831.1713(a), or the first day of a later
pay period specified by the employee with an authorized agency
official's concurrence.
(b) The commencing date of a phased retirement annuity (i.e., the
beginning date of the phased retirement period) is the first day of the
first pay period beginning after phased employment is approved by an
authorized agency official under Sec. 831.1713(a), or the first day of
a later pay period specified by the employee with the authorized agency
official's concurrence.
Sec. 831.1715 Effect of phased retirement.
(a)(1) A phased retiree is deemed to be a full-time employee for
the purpose of 5 U.S.C. chapter 89 and 5 CFR part 890 (related to
health benefits), as required by 5 U.S.C. 8336a(i). The normal rules
governing health benefits premiums for part-time employees in 5 U.S.C.
8906(b)(3) do not apply.
(2) A phased retiree is deemed to be receiving basic pay at the
rate applicable to a full-time employee holding the same position for
the purpose of determining a phased retiree's annual rate of basic pay
used in calculating premiums (employee withholdings and agency
contributions) and benefits under 5 U.S.C. chapter 87 and 5 CFR part
870 (dealing with life insurance), as required by 5 U.S.C. 8336a(n).
The deemed full-time schedule will consist of five 8-hour workdays each
workweek, resulting in a 40-hour workweek. Only basic pay for hours
within the deemed full-time schedule will be considered, consistent
with 5 U.S.C. 8336a(n) and the definition of ``full-time'' in Sec.
831.1702. Any premium pay creditable as basic pay for life insurance
purposes under 5 CFR 870.204 for overtime work or hours outside the
full-time schedule that an employee was receiving before phased
retirement, such as standby duty pay under 5 U.S.C. 5545(c)(1) or
customs officer overtime pay under 19 U.S.C. 267(a), may not be
considered in determining a phased retiree's deemed annual rate of
basic pay under this paragraph.
(b) A phased retiree may not be appointed to more than one position
at the same time.
(c) A phased retiree may move to another position in the agency or
another agency during phased retirement status only if the change would
not result in a change in the working percentage. To move to another
agency during phased retirement status and continue phased employment
and phased retirement status, the phased retiree must submit a written
and signed request and obtain the signed written approval, in
accordance with Sec. 831.1713(a)(1) and (2), of the authorized agency
official of the agency to which the phased retiree is moving.
Notwithstanding the provisions of Sec. 831.1714, if the authorized
agency official approves the request, the phased retiree's phased
employment and phased retirement status will continue without
interruption at the agency to which the phased retiree moves. If the
authorized agency official at the agency to which the phased retiree
moves does not approve the request, phased employment and phased
retirement status terminates in accordance with Sec. 831.1722(b).
(d) A phased retiree may be detailed to another position or agency,
subject to 5 CFR part 300, subpart C, if the working percentage of the
position to which detailed is the same as the working percentage of the
phased retiree's position of record.
(e) A retirement-eligible employee who makes an election under this
subpart may not elect an alternative annuity under 5 U.S.C. 8343a.
(f) If the employee's election of phased retirement status becomes
effective, the employee is barred from electing phased retirement
status again. Ending phased retirement status or entering full
retirement status does not create a new opportunity for the individual
to elect phased retirement status.
(g) Except as otherwise expressly provided by law or regulation, a
phased retiree is treated as any other employee on a part-time tour of
duty for all other purposes.
(h)(1) A phased retiree may not be assigned hours of work in excess
of the officially established part-time schedule (reflecting the
working percentage), except under the conditions specified in paragraph
(h)(2) of this section.
(2) An authorized agency official may order or approve a phased
retiree to perform hours of work in excess of the officially
established part-time schedule only in rare and exceptional
circumstances meeting all of the following conditions:
(i) The work is necessary to respond to an emergency posing a
significant, immediate, and direct threat to life or property;
(ii) The authorized agency official determines that no other
qualified employee is available to perform the required work;
(iii) The phased retiree is relieved from performing excess work as
soon as reasonably possible (e.g., by management assignment of work to
other employees); and
(iv) When an emergency situation can be anticipated in advance,
agency management made advance plans to minimize any necessary excess
work by the phased retiree.
(3) Employing agencies must inform each phased retiree and his or
her supervisor of--
(i) The limitations on hours worked in excess of the officially
established part-time schedule;
(ii) The requirement to maintain records documenting that
exceptions met all required conditions;
(iii) The fact that, by law and regulation, any basic pay received
for hours outside the employee's officially established part-time work
schedule (as described in Sec. 831.1712(a)(1) and (b)) is subject to
retirement deductions and agency contributions, in accordance with 5
U.S.C. 8336a(d), but is not used in computing retirement benefits; and
(iv) The fact that, by law and regulation, any premium pay received
for overtime work or hours outside the full-time schedule, that would
otherwise be basic pay for retirement, such as customs officer overtime
pay
[[Page 33924]]
under 19 U.S.C. 267(a), will not be subject to retirement deductions or
agency contributions, in accordance with 5 U.S.C. 8336a(d), and that
any such premium pay received will not be included in computing
retirement benefits.
(4) Employing agencies must maintain records documenting that
exceptions granted under paragraph (h)(2) of this section meet the
required conditions. These records must be retained for at least 6
years and be readily available to auditors. OPM may require periodic
agency reports on the granting of exceptions and of any audit findings.
(5) If OPM finds that an agency (or subcomponent) is granting
exceptions that are not in accordance with the requirements of this
paragraph (h), OPM may administratively withdraw the agency's (or
subcomponent's) authority to grant exceptions and require OPM approval
of any exception.
(6) If OPM finds that a phased retiree has been working a
significant amount of excess hours beyond the officially established
part-time schedule to the degree that the intent of the phased
retirement law is being undermined, OPM may require that the agency end
the individual's phased retirement by unilateral action,
notwithstanding the normally established methods of ending phased
retirement. This finding does not need to be based on a determination
that the granted exceptions failed to meet the required conditions in
paragraph (h)(2) of this section. With the ending of an individual's
phased retirement, that individual must be returned to regular
employment status on the same basis as a person making an election
under Sec. 831.1721--unless that individual elects to fully retire as
provided under Sec. 831.1731.
(7) A phased retiree must be compensated for excess hours of work
in accordance with the normally applicable pay rules.
(8) Any premium pay received for overtime work or hours outside the
full-time schedule that would otherwise be basic pay for retirement,
such as customs officer overtime pay under 19 U.S.C. 267(a), is not
subject to retirement deductions or agency contributions, in accordance
with 5 U.S.C. 8336a(d).
(i) A phased retiree is deemed to be an annuitant for the purpose
of subpart S of this part.
Returning to Regular Employment Status
Sec. 831.1721 Ending phased retirement status to return to regular
employment status.
(a) Election to end phased retirement status to return to regular
employment status. (1) A phased retiree may elect, with the permission
of an authorized agency official, to end phased employment at any time
to return to regular employment status. The election is deemed to meet
the requirements of 5 U.S.C. 8336a(g) regardless of the employee's work
schedule. The employee is not subject to any working percentage
limitation (i.e., full-time, 50 percent of full-time, or any other
working percentage) upon electing to end phased retirement status.
(2) To elect to end phased retirement status to return to regular
employment status, a phased retiree must--
(i) Submit to the authorized agency official, on a form prescribed
by OPM, a written and signed request to end phased retirement status to
return to regular employment status; and
(ii) Obtain the signed written approval of the authorized agency
official for the request.
(3) An employee may cancel an approved election to end phased
retirement status to return to regular employment status by submitting
a signed written request to the agency and obtaining the approval of an
authorized agency official before the effective date of return to
regular employment status.
(4) The employing agency must notify OPM that the employee's phased
retirement status has ended by submitting to OPM a copy of the
completed election to end phased retirement status to return to regular
employment status within 15 days of its approval.
(b) Mandated return to regular employment status. A phased retiree
may be returned to regular employment status as provided under Sec.
831.1715(h)(6).
(c) Bar on reelection of phased retirement. Once an election to end
phased retirement status to return to regular employment status is
effective, the employee may not reelect phased retirement status.
Sec. 831.1722 Effective date of end of phased retirement status to
return to regular employment status.
(a) (1) Except as provided in paragraph (b) of this section, if a
request to end phased retirement status to return to regular employment
status is approved by an authorized agency official under Sec.
831.1721 on any date on or after the first day of a month through the
fifteenth day of a month, the phased retiree's resumption of regular
employment status is effective the first day of the first full pay
period of the month following the month in which the election to end
phased retirement status to return to regular employment status is
approved.
(2) If a request to end phased retirement status to return to
regular employment status is approved by an authorized agency official
under Sec. 831.1721 on any date on or after the sixteenth day of a
month through the last day of a month, the phased retiree's resumption
of regular employment status is effective on the first day of the first
full pay period of the second month following the month in which the
election to end phased retirement status to return to regular
employment status is approved.
(3) The phased retirement annuity terminates on the date determined
under paragraph (a)(1) or (2) of this section.
(b) When a phased retiree moves from the agency that approved his
or her phased employment and phased retirement status to another agency
and the authorizing official at the agency to which the phased retiree
moves does not approve a continuation of phased employment and phased
retirement status, phased employment and phased retirement status
terminates when employment ends at the current employing agency.
Sec. 831.1723 Effect of ending phased retirement status to return to
regular employment status.
(a) After phased retirement status ends under Sec. 831.1722, the
employee's rights under subchapter III of chapter 83 or chapter 84 of
title 5, United States Code, are determined based on the law in effect
at the time of any subsequent separation from service.
(b) After an individual ends phased retirement status to return to
regular employment status, for the purposes of subchapter III of
chapter 83 or chapter 84 of title 5, United States Code, at the time of
the subsequent separation from service, the phased retirement period
will be treated as if it had been a period of part-time employment with
the work schedule described in Sec. 831.1712(a)(1) and (b). The part-
time proration adjustment for the phased retirement period will be
based upon the individual's officially established part-time work
schedule, with no credit for extra hours worked. In determining the
individual's deemed rate of basic pay during the phased retirement
period, only basic pay for hours within the
[[Page 33925]]
individual's officially established part-time work schedule may be
considered. No pay received for other hours during the phased
retirement period may be included as part of basic pay for the purpose
of computing retirement benefits, notwithstanding the normally
applicable rules.
(c) The restrictions in Sec. Sec. 831.1751 and 831.1752 regarding
when an individual must complete a deposit for civilian service, a
redeposit for civilian service that ended on or after March 1, 1991, or
a deposit for military service do not apply when a phased retiree ends
phased retirement status to return to regular employment status under
this section.
(d) When a phased retiree whose phased retirement annuity was
subject to an actuarial reduction for unpaid redeposit service, in
accordance with Sec. 831.303(c) and (d), ends phased retirement status
to return to regular employment status, the annuity the individual
becomes entitled to at retirement is subject to the actuarial
reduction, increased by cost-of-living adjustments under Sec.
831.1743(d). For the purpose of applying the provisions of Sec.
831.1743(d) under this paragraph, cost-of-living adjustments are
applied through the annuity commencing date.
Entering Full Retirement Status
Sec. 831.1731 Application for full retirement status.
(a) Election of full retirement. (1) A phased retiree may elect to
enter full retirement status at any time by submitting to OPM an
application for full retirement in accordance with Sec. 831.104. This
includes an election made under Sec. 831.1715(h)(6) in lieu of a
mandated return to regular employment status. Upon making such an
election, a phased retiree is entitled to a composite retirement
annuity.
(2) A phased retiree may cancel an election of full retirement
status and withdraw an application for full retirement by submitting a
signed written request with the agency and obtaining the approval of an
authorized agency official before the commencing date of the composite
retirement annuity.
(b) Deemed election of full retirement. A phased retiree who is
separated from phased employment for more than 3 days enters full
retirement status. The individual's composite retirement annuity will
begin to accrue on the commencing date of the composite annuity as
provided in Sec. 831.1732, and payment will be made after he or she
submits an application in accordance with Sec. 831.104 for the
composite retirement annuity.
(c) Survivor election provisions. An individual applying for full
retirement status under this section is subject to the survivor
election provisions of subpart F of this part.
Sec. 831.1732 Commencing date of composite retirement annuity.
(a) The commencing date of the composite retirement annuity of a
phased retiree who enters full retirement status is the day after
separation.
(b) A phased retirement annuity terminates upon separation from
service.
Computation of Phased Retirement Annuity at Phased Retirement and
Composite Retirement Annuity at Full Retirement
Sec. 831.1741 Computation of phased retirement annuity.
(a) Subject to adjustments described in paragraphs (b) and (c) of
this section, a phased retiree's phased retirement annuity equals the
product obtained by multiplying--
(1) The amount of annuity computed under 5 U.S.C. 8339, including
any reduction for any unpaid deposit for non-deduction service
performed before October 1, 1982, but excluding reduction for survivor
annuity, 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 5 U.S.C.
8336(a) or (b); by
(2) The phased retirement percentage for the phased retiree.
(b)(1) The monthly installment of annuity derived from the
computation of the annuity under paragraph (a) of this section is
reduced by any actuarial reduction for unpaid redeposit service in
accordance with Sec. 831.303(c) and (d).
(2) For the purpose of applying Sec. 831.303(c) and (d) in
paragraph (b)(1) of this section, the term ``time of retirement'' in
Sec. 831.303(c)(2) and (d)(2)(i) means the commencing date of the
phased retiree's phased retirement annuity.
(c) The monthly installment of annuity derived from the computation
of the annuity under paragraph (a) of this section is also subject to
any offset under Sec. 831.1005, adjusted by multiplying the offset
that would otherwise apply had the phased retiree fully retired under 5
U.S.C. 8336(a) or (b) by the phased retirement percentage.
Sec. 831.1742 Computation of composite annuity at final retirement.
(a) Subject to the adjustment described in paragraph (c) of this
section, a phased retiree's composite retirement annuity at final
retirement equals the sum obtained by adding--
(1) The amount computed under Sec. 831.1741(a) without adjustment
under Sec. 831.1741(b) and (c), increased by cost-of-living
adjustments under Sec. 831.1743(c); and
(2) The ``fully retired phased component'' computed under paragraph
(b) of this section.
(b)(1) Subject to the requirements described in paragraphs (b)(2)
and (b)(3) of this section, a ``fully retired phased component'' equals
the product obtained by multiplying--
(i) The working percentage; by
(ii) The amount of an annuity computed under 5 U.S.C. 8339 that
would have been payable at the time of full retirement if the
individual had not elected phased retirement status and as if the
individual was employed on a full-time basis in the position occupied
during the phased retirement period and before any reduction for
survivor annuity.
(2) In applying paragraph (b)(1)(ii) of this section, the
individual must be deemed to have a full-time schedule during the
period of phased retirement. The deemed full-time schedule will consist
of five 8-hour workdays each workweek, resulting in a 40-hour workweek.
In determining the individual's deemed rate of basic pay during phased
retirement, only basic pay for hours within the deemed full-time
schedule will be considered, consistent with the definition of ``full-
time'' in Sec. 831.1702. Any premium pay creditable as basic pay for
retirement purposes for overtime work or hours outside the full-time
schedule that an employee was receiving before phased retirement, such
as standby duty pay under 5 U.S.C. 5545(c)(1) or customs officer
overtime pay under 19 U.S.C. 267(a), may not be considered in
determining a phased retiree's deemed rate of basic pay during phased
retirement.
(3) In computing the annuity amount under paragraph (b)(1) of this
section--
(i) The amount of unused sick leave equals the result of dividing
the days of unused sick leave to the individual's credit at separation
for full retirement by the working percentage; and
(ii) The reduction for any unpaid deposit for non-deduction service
performed before October 1, 1982, is based on the amount of unpaid
deposit, with interest computed to the commencing date of the composite
annuity.
(c) The composite retirement annuity computed under paragraph (a)
of this section is adjusted by applying any
[[Page 33926]]
reduction for any survivor annuity benefit.
(d) The monthly installment derived from a composite retirement
annuity computed under paragraph (a) of this section and adjusted under
paragraph (c) is adjusted by any--
(1) Actuarial reduction applied to the phased retirement annuity
under Sec. 831.1741(b), increased by cost-of-living adjustments under
Sec. 831.1743(d); and
(2) Offset under Sec. 831.1005 (i.e., the offset based on all
service, including service during the phased retirement period,
performed by the individual that was subject to mandatory Social
Security coverage).
Sec. 831.1743 Cost-of-living adjustments.
(a) The phased retirement annuity under Sec. 831.1741 is increased
by cost-of-living adjustments in accordance with 5 U.S.C. 8340.
(b) A composite retirement annuity under Sec. 831.1742 is
increased by cost-of-living adjustments in accordance with 5 U.S.C.
8340, except that 5 U.S.C. 8340(c)(1) does not apply.
(c)(1) For the purpose of computing the amount of phased retirement
annuity used in the computation under Sec. 831.1742(a)(1), the initial
cost-of-living adjustment applied is prorated in accordance with 5
U.S.C. 8340(c)(1).
(2) If the individual enters full retirement status on the same day
as the effective date of a cost-of-living adjustment (usually December
1st), that cost-of-living adjustment is applied to increase the phased
retirement annuity used in the computation under Sec. 831.1742(a)(1).
(d)(1) For the purpose of computing the actuarial reduction used in
the computation under Sec. 831.1742(d)(1), the initial cost-of-living
adjustment applied is prorated in accordance with 5 U.S.C. 8340(c)(1).
(2) If the individual enters full retirement status on the same day
as the effective date of a cost-of-living adjustment (usually December
1st), that cost-of-living adjustment is applied to increase the
actuarial reduction used in the computation under Sec. 831.1742(d)(1).
(3) When applying each cost-of-living adjustment to the actuarial
reduction used in the computation under Sec. 831.1742(d)(1), the
actuarial reduction is rounded up to the next highest dollar.
Opportunity of a Phased Retiree To Pay a Deposit or Redeposit for
Civilian or Military Service
Sec. 831.1751 Deposit for civilian service for which no retirement
deductions were withheld and redeposit for civilian service for which
retirement deductions were refunded to the individual.
(a)(1) Any deposit an employee entering phased retirement status
wishes to make for civilian service for which no retirement deductions
were withheld (i.e., ``non-deduction'' service) must be paid within 30
days from the date OPM notifies the employee of the amount of the
deposit, during the processing of the employee's application for phased
retirement. The deposit amount will include interest under Sec.
831.105, computed to the effective date of phased retirement.
(2) No deposit payment may be made by the phased retiree when
entering full retirement status.
(3) As provided under Sec. 831.1741(a)(1), for the computation of
phased retirement annuity, the amount of any unpaid deposit for non-
deduction service performed before October 1, 1982, including interest
computed to the effective date of phased retirement annuity, will be
the basis for reduction of the phased retirement annuity for such
unpaid deposit.
(4) As provided under Sec. 831.1742(b)(2), the amount of any
unpaid deposit for non-deduction service performed before October 1,
1982, including interest computed to the commencing date of the
composite annuity, will be the basis for reduction of the ``fully
retired phased component'' for such unpaid deposit.
(b)(1) Any redeposit an employee entering phased retirement status
wishes to make for civilian service for which retirement deductions
were refunded to the employee must be paid within 30 days from the date
OPM notifies the employee of the amount of the redeposit, during the
processing of the employee's application for phased retirement. The
redeposit amount will include interest under Sec. 831.105 computed to
the effective date of phased retirement.
(2) No redeposit payment may be made by the phased retiree when
entering full retirement status.
(3) As provided under Sec. 831.1741(b), for the computation of
monthly installment of phased retirement annuity, the amount of any
unpaid redeposit at phased retirement, or unpaid balance thereof,
including interest computed to the effective date of phased retirement,
will be the basis, along with the phased retiree's age, for any
actuarial reduction of the monthly installment of phased retirement
annuity for such unpaid redeposit.
(4) As provided under Sec. 831.1742(d)(1), any actuarial reduction
for unpaid redeposit service applied to the monthly installment of
phased retirement annuity, as described in paragraph (b)(3) of this
section and Sec. 831.1741(b), is increased by cost-of-living
adjustments and applied to the monthly installment derived from the
composite retirement annuity.
Sec. 831.1752 Deposit for military service.
(a) A phased retiree who wishes to make a military service credit
deposit under Sec. 831.2104(a) for military service performed prior to
entering phased retirement status must complete such a deposit no later
than the day before the effective date of his or her phased employment
and the commencing date of the phased retirement annuity. A military
service credit deposit for military service performed prior to an
individual's entry into phased retirement status cannot be made after
the effective date of phased employment and the commencing date of
phased retirement annuity.
(b) A phased retiree who wishes to make a military service credit
deposit under Sec. 831.2104(a) for military service performed after
the effective date of phased employment and the commencing date of the
phased retirement annuity and before the effective date of the
composite retirement annuity (e.g., due to the call-up of the employee
for active military service) must complete such a deposit no later than
the day before the effective date of his or her composite retirement
annuity.
Sec. 831.1753 Civilian and military service of an individual affected
by an erroneous retirement coverage determination.
(a) For the purpose of crediting service for which actuarial
reduction of annuity is permitted under Sec. 831.303(d) for an
employee who enters phased retirement, the deposit amounts under Sec.
831.303(d) form the basis, along with the phased retiree's age, for any
actuarial reduction of the phased retirement annuity for such unpaid
deposits.
(b) No deposit payment for service described under Sec. 831.303(d)
may be made by the phased retiree when entering full retirement status.
(c) As provided under Sec. 831.1741(b), the amount of any deposit
under Sec. 831.303(d) at the commencing date of the individual's
phased retirement annuity, or unpaid balance thereof, including
interest computed to the
[[Page 33927]]
effective date of phased retirement annuity, will be the basis, along
with the phased retiree's age, for any actuarial reduction of the
phased retirement annuity for such unpaid deposit.
(d) As provided under Sec. 831.1742(d)(1), any actuarial reduction
for any unpaid deposit service under Sec. 831.303(d) applied to the
phased retirement annuity, as described in Sec. 831.1741(b), is
increased by cost-of-living adjustments and applied to the monthly
installment derived from the composite retirement annuity.
Death Benefits
Sec. 831.1761 Death of phased retiree during phased employment.
(a) For the purpose of 5 U.S.C. 8341--
(1) The death of a phased retiree is deemed to be a death in
service of an employee; and
(2) The phased retirement period is deemed to have been a period of
part-time employment with the work schedule described in Sec.
831.1712(a)(1) and (b) for the purpose of determining survivor
benefits. The part-time proration adjustment for the phased retirement
period will be based upon the employee's officially established part-
time work schedule, with no credit for extra hours worked. In
determining the employee's deemed rate of basic pay during the phased
retirement period, only basic pay for hours within the employee's
officially established part-time work schedule may be considered. No
pay received for other hours during the phased retirement period may be
included as part of basic pay for the purpose of computing retirement
benefits, notwithstanding the normally applicable rules.
(b) If a phased retiree elects not to make a deposit described in 5
U.S.C. 8334(d)(1), such that his or her annuity is actuarially reduced
under 5 U.S.C. 8334(d)(2) and Sec. 831.1741(b), and that individual
dies in service as a phased retiree, the amount of any deposit upon
which such actuarial reduction was to have been based will be deemed to
have been fully paid.
Sec. 831.1762 Death of an individual who has separated from phased
employment and who dies before submitting an application for a
composite retirement annuity.
(a) For the purpose of 5 U.S.C. 8341, an individual who dies after
separating from phased employment and before submitting an application
for composite retirement annuity is deemed to have filed an application
for full retirement status, and composite retirement annuity, with OPM.
(b) Unless an individual described in paragraph (a) of this section
was reemployed with the Federal Government after separating from phased
employment, the composite retirement annuity of an individual described
in paragraph (a) of this section is deemed to have accrued from the day
after separation through the date of death. Any composite annuity
accrued during such period of time, minus any phased annuity paid
during that period, will be paid as a lump-sum payment of accrued and
unpaid annuity, in accordance with 5 U.S.C. 8342(c) and (f).
Sec. 831.1763 Lump-sum credit.
If an individual performs phased employment, the lump-sum credit
will be reduced by any annuity that is paid or accrued during phased
employment.
Reemployment After Separation From Phased Retirement Status
Sec. 831.1771 Reemployment of an individual who has separated from
phased employment and who dies before submitting an application for a
composite retirement annuity.
(a) Unless eligibility for annuity terminates under 5 U.S.C. 8344,
a phased retiree who has been separated from employment for more than 3
days and who has entered full retirement status, but who has not
submitted an application for composite retirement annuity, is deemed to
be an annuitant receiving annuity from the Civil Service Retirement and
Disability Fund during any period of employment in an appointive or
elective position in the Federal Government.
(b) A phased retiree described in paragraph (a) of this section
whose entitlement to a composite retirement annuity terminates under 5
U.S.C. 8344 due to the employment, is an employee effective upon
employment. The individual is not entitled to a phased retirement
annuity (i.e., phased retirement annuity does not resume) during the
period of employment, and the individual's entitlement to a composite
retirement annuity terminates effective on the date of employment.
Mentoring
Sec. 831.1781 Mentoring.
(a) A phased retiree, other than an employee of the United States
Postal Service, must spend at least 20 percent of his or her working
hours in mentoring activities as defined by an authorized agency
official. For purposes of this section, mentoring need not be limited
to mentoring of an employee who is expected to assume the phased
retiree's duties when the phased retiree fully retires.
(b) An authorized agency official may waive the requirement under
paragraph (a) of this section in the event of an emergency or other
unusual circumstances (including active duty in the armed forces) that,
in the authorized agency official's discretion, would make it
impracticable for a phased retiree to fulfill the mentoring
requirement.
PART 838--COURT ORDERS AFFECTING RETIREMENT BENEFITS
0
14. The authority citation for part 838 continues to read as follows:
Authority: 5 U.S.C. 8347(a) and 8461(g). Subparts B, C, D, E, J,
and K also issued under 5 U.S.C. 8345(j)(2) and 8467(b). Sections
838.221, 838.422, and 838.721 also issued under 5 U.S.C. 8347(b).
0
15. Amend Sec. 838.103 as follows:
0
a. Revise the definitions of ``employee'', ``employee annuity'',
``gross annuity'', ``net annuity'', ``retiree'', and ``self-only
annuity'';
0
b. Add the definitions of ``composite retirement annuity'', ``full
retirement'', ``phased employment'', ``phased retiree'', ``phased
retirement annuity'', ``phased retirement status,'' ``retirement'' and
``retires'' in alphabetical order.
Sec. 838.103 Definitions.
* * * * *
Composite retirement annuity means the annuity computed when a
phased retiree attains full retirement status.
* * * * *
Employee means an employee or Member covered by CSRS or FERS and a
phased retiree as defined under this part.
Employee annuity means the recurring payments under CSRS or FERS
made to a retiree, the recurring phased retirement annuity payments
under CSRS or FERS made to a phased retiree in phased retirement
status, and recurring composite retirement annuity payments under CSRS
or FERS made to a phased retiree when he or she attains full retirement
status. Employee annuity does not include payments of accrued and
unpaid annuity after the death of a retiree or phased retiree under 5
U.S.C. 8342(g) or 8424(h).
* * * * *
Full retirement status means that a phased retiree has ceased
employment and is entitled, upon application, to a composite retirement
annuity, as provided under subpart Q of 5 CFR part 831 or 5 CFR part
848.
Gross annuity means the amount of monthly annuity payable to a
retiree or phased retiree after reducing the self-
[[Page 33928]]
only annuity to provide survivor annuity benefits, if any, but before
any other deduction. Unless the court order expressly provides
otherwise, gross annuity also includes any lump-sum payments made to
the retiree under 5 U.S.C. 8343a or 8420a.
* * * * *
Net annuity. (1) Net annuity means the amount of monthly annuity
payable to a retiree or phased retiree after deducting from the gross
annuity any amounts that are--
(i) Owed by the retiree to the United States;
(ii) Deducted for health benefits premiums under 5 U.S.C. 8906 and
5 CFR 891.401 and 891.402;
(iii) Deducted for life insurance premiums under 5 U.S.C. 8714a(d);
(iv) Deducted for Medicare premiums;
(v) Properly withheld for Federal income tax purposes, if the
amounts withheld are not greater than they would be if the retiree
claimed all dependents he or she was entitled to claim;
(vi) Properly withheld for State income tax purposes, if the
amounts withheld are not greater than they would be if the retiree
claimed all dependents he or she was entitled to claim; or
(vii) Already payable to another person based on a court order
acceptable for processing or a child abuse judgment enforcement order.
(2) Unless the court order expressly provides otherwise, net
annuity also includes any lump-sum payments made to the retiree under 5
U.S.C. 8343a or 8420a.
Phased employment means the less-than-full-time employment of a
phased retiree, as provided under 5 CFR part 831, subpart Q, or part
848.
Phased retiree. (1) Phased retiree means a retirement-eligible
employee who--
(i) With the concurrence of an authorized agency official, enters
phased retirement status in accordance with 5 CFR part 831, subpart Q,
or part 848; and
(ii) Has not entered full retirement status;
(2) For the purpose of this part, when the term employee is used it
also refers to a phased retiree.
Phased retirement annuity means the annuity payable under 5 U.S.C.
8336a or 8412a, and 5 CFR part 831, subpart Q, or part 848, before full
retirement.
Phased retirement status means that a phased retiree is
concurrently employed in phased employment and eligible to receive a
phased retirement annuity.
* * * * *
Retiree means a former employee, including a phased retiree who has
entered full retirement status, or a Member who is receiving recurring
payments under CSRS or FERS based on his or her service as an employee
or Member. Retiree does not include an employee receiving a phased
retirement annuity or a person receiving an annuity only as a current
spouse, former spouse, child, or person with an insurable interest.
Retirement means a retirement other than a phased retirement.
Retires means enters retirement other than a phased retirement.
Self-only annuity means the recurring unreduced payments under CSRS
or FERS to a retiree with no survivor annuity payable to anyone. Self-
only annuity also includes the recurring unreduced phased retirement
annuity payments under CSRS or FERS to a phased retiree before any
other deduction. Unless the court order expressly provides otherwise,
self-only annuity also includes any lump-sum payments made to the
retiree under 5 U.S.C. 8343a or 8420a.
* * * * *
Sec. 838.136 [Removed]
0
16. Remove Sec. 838.136.
0
17. Amend Sec. 838.211 by revising paragraph (a)(1) introductory text,
redesignating paragraph (b) as paragraph (a)(4), and by adding a new
paragraph (b) to read as follows:
Sec. 838.211 Amounts subject to court orders.
(a)(1) Employee annuities other than phased retirement annuities
are subject to court orders acceptable for processing only if all of
the conditions necessary for payment of the employee annuity to the
former employee have been met, including, but not limited to--
* * * * *
(b)(1) Phased retirement annuities are subject to court orders
acceptable for processing only if all of the conditions necessary for
payment of the phased retirement annuity to the phased retiree have
been met, including, but not limited to--
(i) Entry of the employee into phased retirement status under 5 CFR
part 831, subpart Q, or part 848 of this chapter, respectively;
(ii) Application for payment of the phased retirement annuity by
the phased retiree; and
(iii) The phased retiree's entitlement to a phased retirement
annuity.
(2) Money held by an employing agency or OPM that may be payable at
some future date is not available for payment under court orders
directed at phased retirement annuities.
(3) OPM cannot pay a former spouse a portion of a phased retirement
annuity before the employee annuity begins to accrue.
(4) Payment to a former spouse under a court order may not exceed
the phased retirement annuity.
* * * * *
0
18. Amend Sec. 838.222 by revising paragraph (a)(2) introductory text
and paragraphs (b), (c)(1)(ii) and (c)(2) introductory text, and
paragraph (d) introductory text to read as follows:
Sec. 838.222 OPM action on receipt of a court order acceptable for
processing.
(a) * * *
(2) The retiree or phased retiree--
* * * * *
(b) If OPM receives a court order acceptable for processing that is
directed at an employee annuity but the employee has died, or if a
retiree or phased retiree dies after payments from the retiree or
phased retiree to a former spouse have begun, OPM will inform the
former spouse that the employee, or retiree, or phased retiree has died
and that OPM can only honor court orders dividing employee annuities
during the lifetime of the retiree or phased retiree.
(c) * * *
(1) * * *
(ii) That benefits cannot begin to accrue until the employee
retires, or enters phased retirement status; * * *
(2) The employee, separated employee, retiree, or phased retiree--
* * * * *
(d) The failure of OPM to provide, or of the employee, separated
employee, retiree, phased retiree or the former spouse to receive, the
information specified in this section prior to the commencing date of a
reduction or accrual does not affect--
* * * * *
0
19. Revise Sec. 838.232 to read as follows:
Sec. 838.232 Suspension of payments.
(a) Payments from employee annuities under this part will be
discontinued whenever the employee annuity payments are suspended or
terminated. If employee annuity payments to the retiree or phased
retiree are restored, payments to the former spouse will also resume,
subject to the terms of any court order acceptable for processing in
effect at that time.
(b) Paragraph (a) of this section will not be applied to permit a
retiree or phased retiree to deprive a former spouse of payment by
causing suspension of payment of employee annuity.
[[Page 33929]]
0
20. Amend Sec. 838.233 by revising paragraph (d) to read as follows:
Sec. 838.233 Termination of payments.
* * * * *
(d) The last day of the month immediately preceding the month in
which the retiree or phased retiree dies; or
* * * * *
0
21. Amend Sec. 838.237 by revising paragraphs (a) and (b)(4) to read
as follows:
Sec. 838.237 Death of the former spouse.
(a) Unless the court order acceptable for processing expressly
provides otherwise, the former spouse's share of an employee annuity
terminates on the last day of the month immediately preceding the death
of the former spouse, and the former spouse's share of employee annuity
reverts to the retiree or phased retiree.
(b) * * *
(4) One or more of the retiree's or phased retiree's children as
defined in 5 U.S.C. 8342(c) or 8424(d).
0
22. Amend Sec. 838.242 by revising paragraph (b) to read as follows:
Sec. 838.242 Computing length of service.
* * * * *
(b) Unused sick leave is counted as ``creditable service'' on the
date of separation for an immediate CSRS annuity. The unused sick leave
of a phased retiree is counted as ``creditable service'' on the date of
separation of the phased retiree to enter full retirement status.
Unused sick leave is not apportioned over the time when earned.
0
23. Amend Sec. 838.305 by revising paragraph (e) introductory text to
read as follows:
Sec. 838.305 OPM computation of formulas.
* * * * *
(e) A court order directed at employee annuity is not a court order
acceptable for processing if the court order directs OPM to determine a
rate of employee annuity that would require OPM to determine a salary
or average salary, other than a salary or average salary actually used
in computing the employee annuity, as of a date prior to the date of
the employee's entry into phased retirement or separation and to adjust
that salary for use in computing the former spouse share unless the
adjustment is by--
* * * * *
0
24. Revise Sec. 838.306 to read as follows:
Sec. 838.306 Specifying type of annuity for application of formula,
percentage or fraction.
(a) A court order directed at an employee annuity that states the
former spouse's share of employee annuity as a formula, percentage, or
fraction is not a court order acceptable for processing unless OPM can
determine the type of annuity (i.e., phased retirement annuity,
composite retirement annuity, net annuity, gross annuity, or self-only
annuity) on which to apply the formula, percentage, or fraction.
(b) The standard types of annuity to which OPM can apply the
formula, percentage, or fraction are phased retirement annuity of a
phased retiree, or net annuity, gross annuity, or self-only annuity of
a retiree. Unless the court order otherwise directs, OPM will apply to
gross annuity the formula, percentage, or fraction directed at annuity
payable to either a retiree or a phased retiree. Section 838.625
contains information on other methods of describing these types of
annuity.
(c)(1) A court order may include provisions directed at:
(i) Phased retirement annuity payable to a phased retiree, to
address the possibility that an employee will enter phased retirement
status;
(ii) Composite retirement annuity payable to a phased retiree at
entry into full retirement status, to address the possibility that an
employee will enter phased retirement status and then enter full
retirement status; and
(iii) Annuity payable to an employee who retires without having
elected phased retirement status.
(2) To separately provide for division of phased retirement annuity
or composite retirement annuity, a provision of a court order must
expressly state that it is directed at ``phased retirement annuity'' or
``composite retirement annuity,'' and must meet the requirements of
paragraph (a) of this section. That is, it must state the type of
annuity to be divided (e.g., ``net phased retirement annuity''). If
such a provision is unclear as to whether it is directed at gross, net,
or self-only phased retirement annuity or composite retirement annuity,
the provision will be applied to gross phased retirement annuity or
gross composite retirement annuity, as described in paragraph (b) of
this section.
(3) Unless a court order expressly states that phased retirement
annuity or composite retirement annuity is not to be divided, a court
order meeting the requirements of paragraph (a) of this section and
that generally provides for division of annuity, without meeting the
requirements of paragraph (c)(2) of this section, regarding the
specific type of annuity being divided, will be applied to divide any
employee annuity, including phased retirement annuity and composite
retirement annuity.
0
25. Revise Sec. 838.612 to read as follows:
Sec. 838.612 Distinguishing between annuities and contributions.
(a) A court order that uses terms such as ``annuities,''
``pensions,'' ``retirement benefits,'' or similar terms, without
distinguishing between phased retirement annuity payable to a phased
retiree, or composite retirement annuity payable to a phased retiree
upon entry into full retirement status, and employee annuity payable to
a retiree, satisfies the requirements of Sec. Sec. 838.303(b)(2) and
838.502(b)(2) for purposes of dividing any employee annuity or a refund
of employee contributions.
(b)(1) A court order using ``contributions,'' ``deductions,''
``deposits,'' ``retirement accounts,'' ``retirement fund,'' or similar
terms satisfies the requirements of Sec. 838.502(b)(2) and may be used
only to divide the amount of contributions that the employee has paid
into the Civil Service Retirement and Disability Fund.
(2) Unless the court order specifically states otherwise, when an
employee annuity is payable, a court order using the terms specified in
paragraph (b)(1) of this section satisfies the requirements of Sec.
838.303(b)(2) and awards the former spouse a benefit to be paid in
equal monthly installments at 50 percent of the gross annuity beginning
on the date the employee annuity commences or the date of the court
order, whichever comes later, until the specific dollar amount is
reached.
0
26. Amend Sec. 838.621 by revising paragraphs (a) and (c) to read as
follows:
Sec. 838.621 Pro rata share.
(a) Pro rata share means one-half of the fraction whose numerator
is the number of months of Federal civilian and military service that
the employee performed during the marriage and whose denominator is the
total number of months of Federal civilian and military service
performed by the employee through the day before the effective date of
phased retirement or separation for retirement, as applicable to the
annuity calculation. In the computation of the division of phased
retirement annuity and a composite retirement annuity, a pro rata share
will be computed through the day before the effective date of an
employee's phased retirement for the computation of the
[[Page 33930]]
division of a phased retirement annuity and then recomputed for
division of the composite retirement annuity under Sec. 831.1742 and
Sec. 848.502.
* * * * *
(c) A court order that awards a portion of an employee annuity as
of a specified date before the employee's phased retirement or
retirement awards the former spouse a pro rata share as defined in
paragraph (a) of this section.
* * * * *
0
27. Amend Sec. 838.622 by revising paragraphs (a) and (c)(2) to read
as follows:
Sec. 838.622 Cost-of-living and salary adjustments.
(a)(1) A court order that awards adjustments to a former spouse's
portion of an employee annuity stated in terms such as ``cost-of-living
adjustments'' or ``COLA's'' occurring after the date of the decree but
before the date of phased retirement or retirement provides increases
equal to the adjustments described in or effected under 5 U.S.C. 8340
or 8462.
(2) A court order that awards adjustments to a former spouse's
portion of an employee annuity stated in terms such as ``salary
adjustments'' or ``pay adjustments'' occurring after the date of the
decree provides increases equal to the adjustments described in or
effected under 5 U.S.C. 5303, until the date the individual enters
phased retirement status or retires.
* * * * *
(c) * * *
(2)(i) Except as provided in paragraph (b) of this section, a court
order that requires OPM to compute a benefit as of a specified date
before the employee's phased retirement or retirement, and specifically
instructs OPM not to apply salary adjustments after the specified date
in computing the former spouse's share of an employee annuity, provides
that the former spouse is entitled to the application of cost-of-living
adjustments after the date the individual enters phased retirement
status or retires (if the employee does not enter phased retirement
status first), in the manner described in Sec. 838.241.
(ii) To award cost-of-living adjustments between a specified date
and the employee's phased retirement or retirement, the court order
must specifically instruct OPM to adjust the former spouse's share of
the employee annuity by any cost-of-living adjustments occurring
between the specified date and the date the employee enters phased
retirement status or retires (if the employee does not enter phased
retirement status first).
(iii) To prevent the application of cost-of-living adjustments that
occur after the employee annuity begins to accrue to the former
spouse's share of the employee annuity, the decree must either state
the exact dollar amount of the award to the former spouse or
specifically instruct OPM not to apply cost-of-living adjustments
occurring after the date the employee enters phased retirement status
or retires (if the employee does not enter phased retirement status
first).
0
28. Amend Sec. 838.623 by revising paragraphs (c)(1), (c)(2)
introductory text, (d)(1), and (d)(2) introductory text, and by adding
paragraph (e) to read as follows:
Sec. 838.623 Computing lengths of service.
* * * * *
(c)(1) When a court order directed at employee annuity (other than
a phased retirement annuity or a composite retirement annuity) contains
a formula for dividing employee annuity that requires a computation of
service worked as of a date prior to separation and using terms such as
``years of service,'' ``total service,'' ``service performed,'' or
similar terms, the time attributable to unused sick leave will not be
included.
(2) When a court order directed at employee annuity other than a
phased retirement annuity or a composite retirement annuity contains a
formula for dividing employee annuity that requires a computation of
``creditable service'' (or some other phrase using ``credit'' or its
equivalent) as of a date prior to retirement, unused sick leave will be
included in the computation as follows:
* * * * *
(d)(1) General language such as ``benefits earned as an employee
with the U.S. Postal Service * * *'' provides only that CSRS or FERS
retirement benefits are subject to division and does not limit the
period of service included in the computation (i.e., service performed
with other Government agencies will be included).
(2) To limit the computation of benefits other than a phased
retirement annuity or a composite retirement annuity to a particular
period of employment, the court order must--
* * * * *
(e) A court order directed at a phased retirement annuity or a
composite retirement annuity cannot limit the computation and division
of a phased retirement annuity or composite retirement annuity to a
particular period of employment or service. A phased retirement annuity
is based on an employee's service as of phased retirement and a ``fully
retired phased component,'' described in Sec. Sec. 831.1742 and
848.502, of a composite retirement annuity is based on a phased
retiree's service as of his or her full retirement. A court order that
attempts to limit the computation of a phased retirement annuity or a
composite retirement annuity to a particular period of employment or
service is not a court order acceptable for processing. If the former
spouse's award of a portion of phased retirement annuity or a composite
retirement annuity is to be limited, the limitation of the division
must be accomplished in a manner other than by limiting the service to
be used in the computation.
0
29. Amend Appendix A to subpart F of part 838 by revising the table of
contents, adding model paragraphs 212-217, and by revising model
paragraph 232 and the introductory text for the 300 series paragraphs
to read as follows:
Appendix A to Subpart F of Part 838--Recommended Language for Court
Orders Dividing Employee Annuities
* * * * *
Table of Contents
000 Series--Special technical provisions.
]001 Language required in Qualified Domestic Relations Orders.
100 Series--Identification of the benefits and instructions that OPM
pay the former spouse.
]101 Identifying retirement benefits and directing OPM to pay
the former spouse.
]102-110 [Reserved]
]111 Protecting a former spouse entitled to military retired
pay.
200 Series--Computing the amount of the former spouse's benefit.
201-211--General award of employee annuity.
]201 Award of a fixed monthly amount.
]202 Award of a percentage.
]203 Award of a fraction.
]204 Award of a pro rata share.
]205-210 [Reserved]
]211 Award based on a stated formula.
212-217 Award of phased retirement annuity or
composite retirement annuity.
]212 Award of phased retirement annuity and composite retirement
annuity while providing for the possibility that the employee
retires in the usual manner without entering phased retirement
status before fully retiring.
]213 Award of composite retirement annuity while providing for
the possibility that the employee retires in the usual manner
without entering phased retirement status, but not providing for
award of phased retirement annuity.
]214 Award of employee annuity when the employee retires in the
usual manner, without providing for the possibility that the
employee enters phased retirement status and full retirement status.
[[Page 33931]]
]215 Award of phased retirement annuity and composite retirement
annuity, without providing for the possibility that the employee
retires in the usual manner without having entered phased retirement
status and full retirement status.
]216 Award of only phased retirement annuity, but not awarding
composite retirement annuity when the employee enters full
retirement status or providing for the possibility that the employee
retires in the usual manner without entering phased retirement
status before fully retiring.
]217 Award of only composite retirement annuity when employee
enters full retirement status following phased retirement, but not
awarding phased retirement annuity when the employee enters phased
retirement status or providing for the possibility that the employee
retires in the usual manner without entering phased retirement
status before fully retiring.
]218-230 [Reserved]
231-232 Awarding or excluding COLA's.
]231 Awarding COLA's on fixed monthly amounts.
]232 Excluding COLA's on awards other than fixed monthly
amounts.
300 Series--Type of annuity.
]301 Awards based on benefits actually paid.
]302-310 [Reserved]
]311 Awards of earned annuity in cases where the actual annuity
is based on disability.
400 Series--Refunds of employee contributions.
]401 Barring payment of a refund of employee contributions.
]402 Dividing a refund of employee contributions.
500 Series--Death of the former spouse.
]501 Full annuity restored to the retiree.
]502 Former spouse share paid to children.
]503 Former spouse share paid to the court.
* * * * *
200 Series--Computing the amount of the former spouse's benefits.
* * * * *
212-217 Award of phased retirement annuity or
composite retirement annuity.
A court order may include an award directed at phased retirement
annuity payable to a phased retiree, to address the possibility that
an employee will enter phased retirement status; composite
retirement annuity payable to a phased retiree at entry into full
retirement status, to address the possibility that an employee will
enter phased retirement status and then enter full retirement
status; or annuity payable to an employee who retires without having
elected phased retirement status.
A general non-specific award will apply to any employee annuity
payable, including phased retirement annuity and composite
retirement annuity (see ]] 201-211). For example, an award dividing
employee annuity that uses terms such as ``annuities,''
``pensions,'' ``retirement benefits,'' or similar general terms,
would apply to all types of employee annuity.
To separately provide for division of phased retirement annuity
or composite retirement annuity, a provision of a court order must
expressly state that it is directed at ``phased retirement annuity''
or ``composite retirement annuity,'' and must indicate the share of
employee annuity as a formula, percentage, or fraction. That is, it
must state the type of annuity to be divided (e.g., ``net phased
retirement annuity''). If such a provision is unclear as to whether
it is directed at gross, net, or self-only phased retirement annuity
or composite retirement annuity, the provision will be applied to
gross phased retirement annuity or gross composite retirement
annuity.
It should be noted that a former spouse survivor annuity cannot
be awarded from a phased retirement annuity; therefore, a phased
retirement annuity is not subject to reduction to provide a former
spouse survivor annuity. As a consequence, an award dividing either
``self-only phased retirement annuity'' or a ``gross phased
retirement annuity'' would be directed at identical annuities.
However, a former spouse survivor annuity can be awarded from a
composite retirement annuity payable to a phased retiree at entry
into full retirement status (i.e., when the ``phased retiree''
enters full retirement status and becomes a ``retiree''); therefore,
there would be a difference between an award of a share of ``self-
only composite retirement annuity'' and an award of a share of
``gross composite retirement annuity.''
Due to the complexity of the benefits, care should be taken in
drafting separate awards of phased retirement annuity or composite
retirement annuity. It should also be noted, for example, that an
award directed only at the division of phased retirement annuity or
composite retirement annuity payable to a phased retiree will not be
effective to divide annuity payable to an employee who retires in
the usual manner, without having entered phased retirement status
first. If separate awards of phased retirement annuity or composite
retirement annuity are to be provided, consideration should be given
to including provisions in the paragraph addressing the possibility
that the employee may retire in the usual manner without entering
phased retirement status before fully retiring. Similarly, if
employee annuity is only to be awarded in the event the employee
retires in the usual manner, without entering phased retirement
status before fully retiring, consideration should be given to
including specific language to that effect.
]212 Award of phased retirement annuity and composite retirement
annuity while providing for the possibility that the employee
retires in the usual manner without entering phased retirement
status before fully retiring.
Using the following paragraph will award phased retirement
annuity and composite retirement annuity and provides for the
possibility that the employee retires in the usual manner without
entering phased retirement status:
``[Employee] is (or will be) eligible for retirement benefits
under the Civil Service Retirement System based on employment with
the United States Government. If [employee] enters phased retirement
status, the [former spouse] is entitled to a [insert description of
percentage, fraction, formula, or insert term `pro rata share'] of
[employee]'s [insert `gross,' `net,' or `self-only'] monthly phased
retirement annuity under the Civil Service Retirement System. When
[employee] enters full retirement status and receives a composite
retirement annuity, [former spouse] is awarded [insert language
awarding fraction, formula, or `pro rata share'] of [employee]'s
monthly [insert ``gross,'' ``net'' or ``self-only''] composite
retirement annuity under the Civil Service Retirement System. If
[employee] retires from employment with the United States Government
without entering phased retirement status before fully retiring,
[former spouse] is entitled to [insert appropriate language from 200
series or 300 series paragraphs] under the Civil Service Retirement
System. The marriage began on [insert date]. The United States
Office of Personnel Management is directed to pay [former spouse]'s
share directly to [former spouse].''
]213 Award of composite retirement annuity while providing for
the possibility that the employee retires in the usual manner
without entering phased retirement status, but not providing for
award of phased retirement annuity.
Using the following will award composite retirement annuity when
an employee enters phased retirement status and subsequently enters
full retirement status, and provides for the possibility that the
employee retires in the usual manner without having entered phased
retirement status; however, the paragraph will not award a phased
retirement annuity when the employee enters phased retirement
status:
``[Employee] is (or will be) eligible for retirement benefits
under the Civil Service Retirement System based on employment with
the United States Government. If [employee] enters phased retirement
status and subsequently enters full retirement status, the [former
spouse] is entitled to a [insert description of percentage,
fraction, formula, or insert term `pro rata share'] of [employee]'s
[insert `gross,' `net,' or `self-only'] monthly composite retirement
annuity under the Civil Service Retirement System. If [employee]
retires from employment with the United States Government without
entering phased retirement status before fully retiring, [former
spouse] is entitled to [insert appropriate language from 200 series
or 300 series paragraphs] under the Civil Service Retirement System.
The marriage began on [insert date]. The United States Office of
Personnel Management is directed to pay [former spouse]'s share
directly to [former spouse].''
]214 Award of employee annuity when the employee retires in the
usual manner, without providing for the possibility that the
employee enters phased retirement status and full retirement status.
Use the following paragraph if the former spouse is only to be
awarded a portion of the employee's annuity when the employee
retires in the usual manner, without an award of a portion of the
employee's phased
[[Page 33932]]
retirement annuity or composite retirement annuity in the event that
the employee enters phased retirement status. It should be noted,
however, that if this conditional clause provided below is used in
an appropriate 200 or 300 series paragraph without a conditional
award of a portion of phased retirement annuity and composite
retirement annuity, the former spouse will not receive a portion of
the employee's annuity if the employee enters phased retirement
status and then enters full retirement status:
``If [employee] retires from employment with the United States
Government without entering phased retirement status before fully
retiring, [former spouse] is awarded [insert remaining language for
the paragraph from the appropriate 200 series or 300 series] . . .
The marriage began on [insert date]. The United States Office of
Personnel Management is directed to pay [former spouse]'s share
directly to [former spouse].''
]215 Award of phased retirement annuity and composite retirement
annuity, without providing for the possibility that the employee
retires in the usual manner without having entered phased retirement
status and full retirement status.
Use the following paragraph to award only phased retirement
annuity and composite retirement annuity. This paragraph will not
award benefits if the employee retires in the usual manner without
entering phased retirement status:
``[Employee] is (or will be) eligible for retirement benefits
under the Civil Service Retirement System based on employment with
the United States Government. If [employee] enters phased retirement
status, the [former spouse] is entitled to a [insert description of
percentage, fraction, formula, or insert term `pro rata share'] of
[employee]'s monthly [insert `gross,' `net,' or `self-only'] phased
retirement annuity under the Civil Service Retirement System. When
[employee] enters full retirement status and receives a composite
retirement annuity, [former spouse] is awarded [insert language
awarding percentage, fraction, formula, or pro rata share] of
[employee]'s monthly [insert ``gross,'' ``net'' or ``self-only'']
composite retirement annuity under the Civil Service Retirement
System. The marriage began on [insert date]. The United States
Office of Personnel Management is directed to pay [former spouse]'s
share directly to [former spouse].''
]216 Award of only phased retirement annuity, but not awarding
composite retirement annuity when the employee enters full
retirement status or providing for the possibility that the employee
retires in the usual manner without entering phased retirement
status before fully retiring.
Using the following will award only phased retirement annuity.
This paragraph will not award composite retirement annuity when the
employee enters full retirement status nor will it provide for the
possibility that the employee retires in the usual manner without
entering phased retirement status. It should be noted that if this
paragraph is used, the former spouse will not receive a portion of
the employee's annuity benefits if the employee retires in the usual
manner without entering phased retirement status first:
``[Employee] is (or will be) eligible for retirement benefits
under the Civil Service Retirement System based on employment with
the United States Government. If [employee] enters phased retirement
status, the [former spouse] is entitled to a [insert description of
percentage, fraction, formula, or insert term `pro rata share'] of
[employee]'s [insert `gross,' `net,' or `self-only'] monthly phased
retirement annuity under the Civil Service Retirement System. The
marriage began on [insert date]. The United States Office of
Personnel Management is directed to pay [former spouse]'s share
directly to [former spouse].''
]217 Award of only composite retirement annuity when employee
enters full retirement status following phased retirement, but not
awarding phased retirement annuity when the employee enters phased
retirement status or providing for the possibility that the employee
retires in the usual manner without entering phased retirement
status before fully retiring.
Using the following will award only composite retirement annuity
when the employee enters full retirement status following phased
retirement. This paragraph will not award phased retirement annuity
when the employee enters phased retirement status nor will it
provide for the possibility that the employee retires in the usual
manner without entering phased retirement status. It should be noted
that if this paragraph is used, the former spouse will not receive a
portion of the employee's annuity benefits if the employee retires
without entering full retirement status from phased retirement
status:
``[Employee] is (or will be) eligible for retirement benefits
under the Civil Service Retirement System based on employment with
the United States Government. If [employee] enters phased retirement
status and enters full retirement status, the [former spouse] is
entitled to a [insert description of percentage, fraction, formula,
or insert term `pro rata share'] of [employee]'s [insert `gross,'
`net,' or `self-only'] monthly composite retirement annuity under
the Civil Service Retirement System. The marriage began on [insert
date]. The United States Office of Personnel Management is directed
to pay [former spouse]'s share directly to [former spouse].''
]218-230 [Reserved]
231-232 Awarding or excluding COLA's.
* * * * *
]232 Excluding COLA's on awards other than fixed monthly
amounts.
Using the following paragraph will prevent application of COLA's
to a former spouse's share of an employee annuity in cases where the
former spouse has been awarded a percentage, fraction or pro rata
share of the employee annuity, rather than a fixed dollar amount.
``[Employee] is (or will be) eligible for retirement benefits
under the Civil Service Retirement System based on employment with
the United States Government. [Insert language for computing the
former spouse's share from ] 202, ] 203, ] 204, ] 211, or ]] 212-217
of this appendix.] The United States Office of Personnel Management
is directed to determine the amount of [former spouse]'s share on
the date [insert `when [employee] retires or enters phased
retirement status' or if the employee has not retired or entered
phased retirement status, or `of this order' if the employee is
already retired or entered phased retirement status] and not to
apply COLA's to that amount. The United States Office of Personnel
Management is directed to pay [former spouse]'s share directly to
[former spouse].''
300 Series--Type of Annuity
Awards of employee annuity to a former spouse (other than awards
of fixed dollar amounts) must specify whether OPM will use the
``phased retirement annuity,'' ``composite retirement annuity,''
``gross annuity,'' ``net annuity,'' or ``self-only annuity'' as
defined in Sec. 838.103 (see also Sec. 838.306) in determining the
amount of the former spouse's entitlement. The court order may
contain a formula that has the effect of creating other types of
annuity, but the court order may only do this by providing a formula
that starts from ``phased retirement annuity,'' ``composite
retirement annuity,'' ``gross annuity,'' ``net annuity,'' or ``self-
only annuity'' as defined in Sec. 838.103.
* * * * *
0
30. Amend Sec. 838.803 by adding paragraph (c) to read as follows:
Sec. 838.803 Language not acceptable for processing.
* * * * *
(c) A court order that attempts to award a former spouse survivor
annuity based on a phased retirement annuity or to reduce a phased
retirement annuity to provide survivor benefits is not a court order
acceptable for processing.
0
31. Amend Sec. 838.806 by revising paragraph (d)(2) to read as
follows:
Sec. 838.806 Amended court orders.
* * * * *
(d) * * *
(2) The effective commencing date for the employee's annuity other
than the commencing date of a phased retirement annuity.
* * * * *
0
32. Amend Sec. 838.807 by revising paragraphs (a), (b)(1), (b)(2), and
(c), and adding paragraph (b)(3) to read as follows:
Sec. 838.807 Cost must be paid by annuity reduction.
(a) A court order awarding a former spouse survivor annuity is not
a court order acceptable for processing unless it permits OPM to
collect the annuity reduction required by 5 U.S.C. 8339(j)(4) or 8419
from annuity paid by OPM to a retiree. OPM will not honor a court order
that provides for the retiree or former spouse to pay OPM the amount of
the annuity reduction by any other means.
(b) * * *
[[Page 33933]]
(1) By reduction of the former spouse's entitlement under a court
order acceptable for processing that is directed at employee annuity
payable to a retiree;
(2) By reduction of the employee annuity payable to a retiree; or
(3) By actuarial reduction of the former spouse survivor annuity in
the event the reduction of the employee annuity is not made for any
reason prior to the death of the annuitant.
(c) Unless the court order otherwise directs, OPM will collect the
annuity reduction required by 5 U.S.C. 8339(j)(4) or 8419 from the
employee annuity payable to a retiree.
0
33. Amend Sec. 838.1111 by redesignating paragraph (b) as paragraph
(c), by revising paragraph (a)(1) introductory text, and by adding new
paragraph (b) to read as follows:
Sec. 838.1111 Amounts subject to child abuse judgment enforcement
orders.
(a)(1) Employee annuities, other than phased retirement annuities,
and refunds of employee contributions are subject to child abuse
enforcement orders only if all of the conditions necessary for payment
of the employee annuity or refund of employee contributions to the
former employee have been met, including, but not limited to--
* * * * *
(b)(1) Phased retirement annuities are subject to child abuse
enforcement orders only if all of the conditions necessary for payment
of the phased retirement annuity to the phased retiree have been met,
including, but not limited to--
(i) Entry of the employee into phased retirement status under
subpart Q of part 831 of this chapter or part 848 of this chapter,
respectively;
(ii) Application for payment of the phased retirement annuity by
the phased retiree; and
(iii) The phased retiree's immediate entitlement to a phased
retirement annuity.
(2) Money held by an employing agency or OPM that may be payable at
some future date is not available for payment under child abuse
judgment enforcement orders.
(3) OPM cannot pay a child abuse creditor a portion of a phased
retirement annuity before the employee annuity begins to accrue.
* * * * *
PART 841--FEDERAL EMPLOYEES RETIREMENT SYSTEM--GENERAL
ADMINISTRATION
0
34. The authority citation for part 841 continues to read as follows:
Authority: 5 U.S.C. 8461; Sec. 841.108 also issued under 5
U.S.C. 552a; Secs. 841.110 and 841.111 also issued under 5 U.S.C.
8470(a); subpart D also issued under 5 U.S.C. 8423; Sec. 841.504
also issued under 5 U.S.C. 8422; Sec. 841.507 also issued under
section 505 of Pub. L. 99-335; subpart J also issued under 5 U.S.C.
8469; Sec. 841.506 also issued under 5 U.S.C. 7701(b)(2); Sec.
841.508 also issued under section 505 of Pub. L. 99-335; Sec.
841.604 also issued under Title II, Pub. L. 106-265, 114 Stat. 780.
0
35. Amend Sec. 841.102 as follows:
0
a. Add paragraph (b)(6), and
0
b. Redesignate paragraphs (c)(6) through (11) as paragraphs (c)(7)
through (12), and
0
c. Add new paragraph (c)(6).
Sec. 841.102 Regulatory structure for the Federal Employees
Retirement System.
* * * * *
(b) * * *
(6) Part 848 of this chapter contains information about phased
retirement under FERS.
(c) * * *
(6) Part 850 of this chapter contains information about CSRS and
FERS electronic retirement processing.
* * * * *
0
36. Amend Sec. 841.104 by revising paragraph (a) and paragraph (b)
introductory text to read as follows:
Sec. 841.104 Special terms defined.
(a) Unless otherwise defined for use in any subpart, as used in
connection with FERS (parts 841 through 850 of this chapter), terms
defined in 5 U.S.C. 8401 have the same meanings assigned to them by
that section.
(b) Unless otherwise defined for use in any subpart, as used in
connection with FERS (parts 841 through 850 of this chapter)--
* * * * *
PART 842--FEDERAL EMPLOYEES RETIREMENT SYSTEM-- BASIC ANNUITY
0
37. The authority citation for part 842 continues to read as follows:
Authority: 5 U.S.C. 8461(g); Secs. 842.104 and 842.106 also
issued under 5 U.S.C. 8461(n); Sec. 842.104 also issued under Secs.
3 and 7(c) of Pub. L. 105-274, 112 Stat. 2419; Sec. 842.105 also
issued under 5 U.S.C. 8402(c)(1) and 7701(b)(2); Sec. 842.106 also
issued under Sec. 102(e) of Pub. L. 104-8, 109 Stat. 102, as amended
by Sec. 153 of Pub. L. 104-134, 110 Stat. 1321-102; Sec. 842.107
also issued under Secs. 11202(f), 11232(e), and 11246(b) of Pub. L.
105-33, 111 Stat. 251, and Sec. 7(b) of Pub. L. 105-274, 112 Stat.
2419; Sec. 842.108 also issued under Sec. 7(e) of Pub. L. 105-274,
112 Stat. 2419; Sec. 842.109 also issued under Sec. 1622(b) of
Public Law 104-106, 110 Stat. 515; Sec. 842.208 also issued under
Sec. 535(d) of Title V of Division E of Pub. L. 110-161, 121 Stat.
2042; Sec. 842.213 also issued under 5 U.S.C. 8414(b)(1)(B) and
Sec.1313(b)(5) of Pub. L. 107-296, 116 Stat. 2135; Secs. 842.304 and
842.305 also issued under Sec. 321(f) of Pub. L. 107-228, 116 Stat.
1383, Secs. 842.604 and 842.611 also issued under 5 U.S.C. 8417;
Sec. 842.607 also issued under 5 U.S.C. 8416 and 8417; Sec. 842.614
also issued under 5 U.S.C. 8419; Sec. 842.615 also issued under 5
U.S.C. 8418; Sec. 842.703 also issued under Sec. 7001(a)(4) of Pub.
L. 101-508, 104 Stat. 1388; Sec. 842.707 also issued under Sec. 6001
of Pub. L. 100-203, 101 Stat. 1300; Sec. 842.708 also issued under
Sec. 4005 of Pub. L. 101-239, 103 Stat. 2106 and Sec. 7001 of Pub.
L. 101-508, 104 Stat. 1388; Subpart H also issued under 5 U.S.C.
1104; Sec. 842.810 also issued under Sec. 636 of Appendix C to Pub.
L. 106-554 at 114 Stat. 2763A-164; Sec. 842.811 also issued under
Sec. 226(c)(2) of Public Law 108-176, 117 Stat. 2529; Subpart J also
issued under Sec. 535(d) of Title V of Division E of Pub. L. 110-
161, 121 Stat. 2042.
0
38. Amend Sec. 842.402 to revise the definition of ``full-time
service'' as follows:
Sec. 842.402 Definitions.
* * * * *
Full-time service means service performed by an employee who has--
(1) An officially established recurring basic workweek consisting
of 40 hours within the employee's administrative workweek (as
established under Sec. 610.111 of this chapter or similar authority);
(2) An officially established recurring basic work requirement of
80 hours per biweekly pay period (as established for employees with a
flexible or compressed work schedule under 5 U.S.C. chapter 61,
subchapter II, or similar authority);
(3) For a firefighter covered by 5 U.S.C. 5545b(b) who does not
have a 40-hour basic workweek, a regular tour of duty averaging at
least 106 hours per biweekly pay period; or
(4) A work schedule that is considered to be full-time by express
provision of law, including a work schedule established for certain
nurses under 38 U.S.C. 7456 or 7456A that is considered by law to be a
full-time schedule for all purposes.
* * * * *
PART 843--FEDERAL EMPLOYEES RETIREMENT SYSTEM--DEATH BENEFITS AND
EMPLOYEE REFUNDS
0
39. The authority citation for part 843 continues to read as follows:
Authority: 5 U.S.C. 8461; Sec. Sec. 843.205, 843.208, and
843.209 also issued under 5 U.S.C. 8424; Sec. 843.309 also issued
under 5 U.S.C. 8442; Sec. 843.406 also issued under 5 U.S.C. 8441.
0
40. Amend Sec. 843.202 by revising paragraph (b) to read as follows:
[[Page 33934]]
Sec. 843.202 Eligibility for payment of the unexpended balance to a
separated employee.
* * * * *
(b)(1) For a retirement based on a separation before October 28,
2009, periods of service for which employee contributions have been
refunded are not creditable service in determining whether the employee
has sufficient service to have title to an annuity or for any other
purpose.
(2) For a retirement based on a separation on or after October 28,
2009, periods of service for which employee contributions have been
refunded are--
(i) Creditable service in determining whether the employee has
sufficient service to have title to an annuity; and
(ii) Not creditable without deposit for any other purpose, except
for average pay computation purposes.
0
41. Add part 848 to read as follows:
PART 848--PHASED RETIREMENT
Subpart A--General Provisions
Sec.
848.101 Applicability and purpose.
848.102 Definitions.
848.103 Implementing directives.
Subpart B--Entering Phased Retirement
848.201 Eligibility.
848.202 Working percentage and officially established hours for
phased employment.
848.203 Application for phased retirement.
848.204 Effective date of phased employment and phased retirement
annuity commencing date.
848.205 Effect of phased retirement.
Subpart C--Returning to Regular Employment Status
848.301 Ending phased retirement status to return to regular
employment status.
848.302 Effective date of end of phased retirement status to return
to regular employment status.
848.303 Effect of ending phased retirement status to return to
regular employment status.
Subpart D--Entering Full Retirement Status
848.401 Application for full retirement status.
848.402 Commencing date of composite retirement annuity.
Subpart E--Computation of Phased Retirement Annuity at Phased
Retirement and Composite Retirement Annuity at Full Retirement
848.501 Computation of phased retirement annuity.
848.502 Computation of composite annuity at final retirement.
848.503 Cost-of-living adjustments.
848.504 Non-eligibility for annuity supplement.
Subpart F--Opportunity of a Phased Retiree to Pay Deposit or Redeposit
for Civilian or Military Service
848.601 Deposit for civilian service for which no retirement
deductions were withheld and redeposit for civilian service for
which retirement deductions were refunded to the individual.
848.602 Deposit for military service.
Subpart G--Death Benefits
848.701 Death of phased retiree during phased employment.
848.702 Death of an individual who has separated from phased
employment and who dies before submitting an application for a
composite retirement annuity.
848.703 Lump-sum credit.
Subpart H--Reemployment After Separation From Phased Retirement Status
848.801 Reemployment of an individual who has separated from phased
employment and who dies before submitting an application for a
composite retirement annuity.
Subpart I--Mentoring
848.901 Mentoring.
Authority: 5 U.S.C. 8461; 5 U.S.C. 8412a.
Subpart A--General Provisions
Sec. 848.101 Applicability and purpose.
This subpart contains the regulations implementing provisions of 5
U.S.C. 8412a authorizing phased retirement. This subpart establishes
the eligibility requirements for making an election to enter phased
retirement status, the procedures for making an election, the record-
keeping requirements, and the methods to be used for certain
computations not addressed elsewhere in parts 841-843 and 845.
Sec. 848.102 Definitions.
In this subpart--
Authorized agency official means--
(1) For the executive branch agencies, the head of an Executive
agency as defined in 5 U.S.C. 105;
(2) For the legislative branch, the Secretary of the Senate, the
Clerk of the House of Representatives, or the head of any other
legislative branch agency;
(3) For the judicial branch, the Director of the Administrative
Office of the U.S. Courts;
(4) For the Postal Service, the Postmaster General;
(5) For any other independent establishment that is an entity of
the Federal Government, the head of the establishment; or
(6) An official who is authorized to act for an official named in
paragraphs (1)-(5) in the matter concerned.
Composite retirement annuity means the annuity computed when a
phased retiree attains full retirement status.
Director means the Director of the Office of Personnel Management.
Full retirement status means that a phased retiree has ceased
employment and is entitled, upon application, to a composite retirement
annuity.
Full-time means--
(1) An officially established recurring basic workweek consisting
of 40 hours within the employee's administrative workweek (as
established under Sec. 610.111 of this chapter or similar authority);
or
(2) An officially established recurring basic work requirement of
80 hours per biweekly pay period (as established for employees with a
flexible or compressed work schedule under 5 U.S.C. chapter 61,
subchapter II, or similar authority).
Phased employment means the less-than-full-time employment of a
phased retiree.
Phased retiree means a retirement-eligible employee who--
(1) With the concurrence of an authorized agency official, enters
phased retirement status; and
(2) Has not entered full retirement status;
Phased retirement annuity means the annuity payable under 5 U.S.C.
8412a before full retirement.
Phased retirement percentage means the percentage which, when added
to the working percentage for a phased retiree, produces a sum of 100
percent.
Phased retirement period means the period beginning on the date on
which an individual becomes entitled to receive a phased retirement
annuity and ending on the date on which the individual dies or
separates from phased employment.
Phased retirement status means that a phased retiree is
concurrently employed in phased employment and eligible to receive a
phased retirement annuity.
Working percentage has the meaning given that term in Sec.
848.202(a).
Sec. 848.103 Implementing directives.
The Director may prescribe, in the form he or she deems
appropriate, such detailed procedures as are necessary to carry out the
purpose of this subpart.
Subpart B--Entering Phased Retirement
Sec. 848.201 Eligibility.
(a) A retirement-eligible employee, as defined in paragraphs (b)
and (c), may elect to enter phased retirement status if the employee
has been employed on a full-time basis for not less than the 3-year
period ending on the effective date of phased retirement status under
Sec. 848.203.
[[Page 33935]]
(b) Except as provided in paragraph (c) of this section, a
retirement-eligible employee means an employee who, if separated from
the service, would meet the requirements for retirement under
subsection (a) or (b) of 5 U.S.C. 8412.
(c) A retirement-eligible employee does not include--
(1) A member of the Capitol Police or Supreme Court Police, or an
employee occupying a law enforcement officer, firefighter, nuclear
materials courier, air traffic controller, or customs and border
protection officer position, except a customs and border protection
officer who is exempt from mandatory separation and retirement under 5
U.S.C. 8325 pursuant to section 535(e)(2)(A) of Division E of the
Consolidated Appropriations Act, 2008, Public Law 110-161;
(2) An individual eligible to retire under 5 U.S.C. 8412(d) or (e):
or
(3) An employee covered by a special work schedule authority that
does not allow for a regularly recurring part-time schedule, such as a
firefighter covered by 5 U.S.C. 5545b or a nurse covered by 38 U.S.C.
7456 or 7456A.
Sec. 848.202 Working percentage and officially established hours for
phased employment.
(a) For the purpose of this subpart, working percentage means the
percentage of full-time equivalent employment equal to the quotient
obtained by dividing--
(1) The number of officially established hours per pay period to be
worked by a phased retiree, as described in paragraph (b) of this
section; by
(2) The number of hours per pay period to be worked by an employee
serving in a comparable position on a full-time basis.
(b) The number of officially established hours per pay period to be
worked by an employee in phased retirement status must equal one-half
the number of hours the phased retiree would have been scheduled to
work had the phased retiree remained in a full-time work schedule and
not elected to enter phased retirement status. These hours make up +-
the officially established part-time work schedule of the phased
retiree and exclude any additional hours worked under Sec. 848.205(j).
Sec. 848.203 Application for phased retirement.
(a) To elect to enter phased retirement status, a retirement-
eligible employee covered by Sec. 848.201 must--
(1) Submit to an authorized agency official a written and signed
request to enter phased employment, on a form prescribed by OPM;
(2) Obtain the signed written approval of an authorized agency
official to enter phased employment; and
(3) File an application for phased retirement, in accordance with
Sec. 841.202.
(b) Except as provided in paragraph (c) of this section, an
applicant for phased retirement may withdraw his or her application any
time before the election becomes effective, but not thereafter.
(c) An applicant for phased retirement may not withdraw his or her
application after OPM has received a certified copy of a court order
(under part 581 or part 838 of this chapter) affecting the benefits.
(d) (1) An employee and an agency approving official may agree to a
time limit to the employee's period of phased employment as a condition
of approval of the employee's request to enter phased employment and
phased retirement, or by mutual agreement after the employee enters
phased employment status.
(2) To enter into such an agreement, the employee and the approving
official must complete a written and signed agreement.
(3) The written agreement must include the following:
(i) The date the employee's period of phased employment will
terminate;
(ii) A statement that the employee can request the approving
official's permission to return to regular employment status at any
time or within three days after the expiration of the agreement as
provided in Sec. 848.301. The agreement must also explain how
returning to regular employment status would affect the employee, as
described in Sec. Sec. 848.301-848.302.
(iii) A statement that the employee has a right to elect to fully
retire at any time as provided in Sec. 848.401;
(iv) A statement that the employee may accept a new appointment at
another agency, with or without the new agency's approval of phased
employment, at any time before the expiration of the agreement or
within 3 days of the expiration of the agreement; the agreement must
also explain how accepting an appointment at a new agency as a regular
employee would affect the employee, as described in Sec. Sec. 848.301-
848.302;
(v) An explanation that when the agreed term of phased employment
ends, the employee will be separated from employment and that such
separation will be considered voluntary, based on the written
agreement; and
(vi) An explanation that if the employee is separated from phased
employment and is not employed within 3 days (i.e., the employee has a
break in service of greater than 3 days), the employee will be deemed
to have elected full retirement.
(4) The agency approving official and the employee may rescind an
existing agreement, or enter into a new agreement to extend or reduce
the term of phased employment agreed to in an existing agreement, by
entering into a new written agreement meeting the requirements of this
paragraph, before the expiration of the agreement currently in effect.
Sec. 848.204 Effective date of phased employment and phased
retirement annuity commencing date.
(a) Phased employment is effective the first day of the first pay
period beginning after phased employment is approved by an authorized
agency official under Sec. 848.203(a), or the first day of a later pay
period specified by the employee with the authorized agency official's
concurrence.
(b) The commencing date of a phased retirement annuity (i.e., the
beginning date of the phased retirement period) is the first day of the
first pay period beginning after phased employment is approved by an
authorized agency official under Sec. 848.203(a), or the first day of
a later pay period specified by the employee with the authorized agency
official's concurrence.
Sec. 848.205 Effect of phased retirement.
(a)(1) A phased retiree is deemed to be a full-time employee for
the purpose of 5 U.S.C. chapter 89 and 5 CFR part 890 (related to
health benefits), as required by 5 U.S.C. 8412a(i). The normal rules
governing health benefits premiums for part-time employees in 5 U.S.C.
8906(b)(3) do not apply.
(2) A phased retiree is deemed to be receiving basic pay at the
rate applicable to a full-time employee holding the same position for
the purpose of determining a phased retiree's annual rate of basic pay
used in calculating premiums (employee withholdings and agency
contributions) and benefits under 5 U.S.C. chapter 87 and 5 CFR part
870 (dealing with life insurance), as required by 5 U.S.C. 8412a(o).
The deemed full-time schedule will consist of five 8-hour workdays each
workweek, resulting in a 40-hour workweek. Only basic pay for hours
within the deemed full-time schedule will be considered, consistent
with 5 U.S.C. 8412a(o) and the definition of ``full-time'' in Sec.
848.102. Any premium pay creditable as basic pay for life insurance
purposes under 5 CFR 870.204 for overtime work or hours outside the
full-time schedule that an employee was receiving before
[[Page 33936]]
phased retirement, such as standby duty pay under 5 U.S.C. 5545(c)(1)
or customs officer overtime pay under 19 U.S.C. 267(a), may not be
considered in determining a phased retiree's deemed annual rate of
basic pay under this paragraph.
(b) A phased retiree may not be appointed to more than one position
at the same time.
(c) A phased retiree may move to another position in the agency or
another agency during phased retirement status only if the change would
not result in a change in the working percentage. To move to another
agency during phased retirement status and continue phased employment
and phased retirement status, the phased retiree must submit a written
and signed request and obtain the signed written approval, in
accordance with Sec. 848.203(a)(1) and (2), of the authorized agency
official to which the phased retiree is moving. Notwithstanding the
provisions of Sec. 848.204, if the authorized agency official approves
the request, the phased retiree's phased employment and phased
retirement status will continue without interruption at the agency to
which the phased retiree moves. If the authorized agency official at
the agency to which the phased retiree moves does not approve the
request, phased employment and phased retirement status terminates in
accordance with Sec. 848.302(b).
(d) A phased retiree may be detailed to another position or agency
if the working percentage of the position to which detailed is the same
as the working percentage of the phased retiree's position of record.
(e) A retirement-eligible employee who makes an election under this
subpart may not elect an alternative annuity under 5 U.S.C. 8420a.
(f) If the employee's election of phased retirement status becomes
effective, the employee is barred from electing phased retirement
status again. Ending phased retirement status or entering full
retirement status does not create a new opportunity for the individual
to elect phased retirement status.
(g) With the exception of Sec. 841.803(f), a phased retiree is
deemed to be an annuitant for the purpose of subpart H of 5 CFR part
841.
(h) A phased retiree is deemed to be an annuitant for the purpose
of subpart J of 5 CFR part 841.
(i) Except as otherwise expressly provided by law or regulation, a
phased retiree is treated as any other employee on a part-time tour of
duty for all other purposes.
(j)(1) A phased retiree may not be assigned hours of work in excess
of the officially established part-time schedule (reflecting the
working percentage), except under the conditions specified in paragraph
(j)(2) of this section.
(2) An authorized agency official may order or approve a phased
retiree to perform hours of work in excess of the officially
established part-time schedule only in rare and exceptional
circumstances meeting all of the following conditions:
(i) The work is necessary to respond to an emergency posing a
significant, immediate, and direct threat to life or property;
(ii) The authorized agency official determines that no other
qualified employee is available to perform the required work;
(iii) The phased retiree is relieved from performing excess work as
soon as reasonably possible (e.g., by management assignment of work to
other employees); and
(iv) When an emergency situation can be anticipated in advance,
agency management made advance plans to minimize any necessary excess
work by the phased retiree.
(3) Employing agencies must inform each phased retiree and his or
her supervisor of--
(i) The limitations on hours worked in excess of the officially
established part-time schedule;
(ii) The requirement to maintain records documenting that the
exceptions met all required conditions;
(iii) The fact that, by law and regulation, any basic pay received
for hours outside the employee's officially established part-time work
schedule (as described in Sec. 848.202(a)(1) and (b)) is subject to
retirement deductions and agency contributions, in accordance with 5
U.S.C. 8412a(d), but is not used in computing retirement benefits; and
(iv) The fact that, by law and regulation, any premium pay received
for overtime work or hours outside the full-time schedule that would
otherwise be basic pay for retirement, such as customs officer overtime
pay under 19 U.S.C. 267(a), will not be subject to retirement
deductions or agency contributions, in accordance with 5 U.S.C.
8412a(d), and that any such premium pay received will not be included
in computing retirement benefits.
(4) Employing agencies must maintain records documenting that
exceptions granted under paragraph (j)(2) of this section meet the
required conditions. These records must be retained for at least 6
years and be readily available to auditors. OPM may require periodic
agency reports on the granting of exceptions and of any audit findings.
(5) If OPM finds that an agency (or subcomponent) is granting
exceptions that are not in accordance with the requirements of this
paragraph (j), OPM may administratively withdraw the agency's (or
subcomponent's) authority to grant exceptions and require OPM approval
of any exception.
(6) If OPM finds that a phased retiree has been working a
significant amount of excess hours beyond the officially established
part-time schedule to the degree that the intent of the phased
retirement law is being undermined, OPM may require that the agency end
the individual's phased retirement by unilateral action,
notwithstanding the normally established methods of ending phased
retirement. This finding does not need to be based on a determination
that the granted exceptions failed to meet the required conditions in
paragraph (j)(2) of this section. With the ending of an individual's
phased retirement, that individual must be returned to regular
employment status on the same basis as a person making an election
under Sec. 848.301--unless that individual elects to fully retire as
provided under Sec. 848.401.
(7) A phased retiree must be compensated for excess hours of work
in accordance with the normally applicable pay rules.
(8) Any premium pay received for overtime work or hours outside the
full-time schedule that would otherwise be basic pay for retirement,
such as customs officer overtime pay under 19 U.S.C. 267(a), is not
subject to retirement deductions or agency contributions, in accordance
with 5 U.S.C. 8412a(d).
Subpart C--Returning to Regular Employment Status
Sec. 848.301 Ending phased retirement status to return to regular
employment status.
(a) Election to end phased retirement status to return to regular
employment status. (1) A phased retiree may elect, with the permission
of an authorized agency official, to end phased employment at any time
to return to regular employment status. The election is deemed to meet
the requirements of 5 U.S.C. 8412a(g) regardless of the employee's work
schedule. The employee is not subject to any working percentage
limitation (i.e., full-time, 50 percent of full-time, or any other
working percentage) upon electing to end phased retirement status.
(2) To elect to end phased retirement status to return to regular
employment status, a phased retiree must--
[[Page 33937]]
(i) Submit to an authorized agency official, on a form prescribed
by OPM, a written and signed request to end phased retirement status to
return to regular employment status; and
(ii) Obtain the signed written approval of an authorized agency
official for the request.
(3) An employee may cancel an approved election to end phased
retirement status to return to regular employment status by submitting
a signed written request to the agency and obtaining the approval of an
authorized agency official before the effective date of return to
regular employment status.
(4) The employing agency must notify OPM that the employee's phased
retirement status has ended by submitting to OPM a copy of the
completed election to end phased retirement status to return to regular
employment status within 15 days of its approval.
(b) Mandated return to regular employment status. A phased retiree
may be returned to regular employment status as provided under Sec.
848.205(j)(6).
(c) Bar on reelection of phased retirement. Once an election to end
phased retirement status to return to regular employment status is
effective, the employee may not reelect phased retirement status.
Sec. 848.302 Effective date of end of phased retirement status to
return to regular employment status.
(a) (1) Except as provided in paragraph (b) of this section, if a
request to end phased retirement status to return to regular employment
status is approved by an authorized agency official under Sec. 848.301
on any date on or after the first day of a month through the fifteenth
day of a month, the phased retiree's resumption of regular employment
status is effective the first day of the first full pay period of the
month following the month in which the election to end phased
retirement status to return to regular employment status is approved.
(2) If a request to end phased retirement status to return to
regular employment status is approved by an authorized agency official
under Sec. 848.301 on any date on or after the sixteenth day of a
month through the last day of a month, the phased retiree's resumption
of regular employment status is effective on the first day of the first
full pay period of the second month following the month in which the
election to end phased retirement status to return to regular
employment status is approved.
(3) The phased retirement annuity terminates on the date determined
under paragraph (a)(1) or (2) of this section.
(b) When a phased retiree moves from the agency that approved his
or her phased employment and phased retirement status to another agency
and the authorizing official at the agency to which the phased retiree
moves does not approve a continuation of phased employment and phased
retirement status, phased employment and phased retirement status
terminates when employment ends at the current employing agency.
Sec. 848.303 Effect of ending phased retirement status to return to
regular employment status.
(a) After phased retirement status ends under Sec. 848.302, the
employee's rights under subchapter III of chapter 83 or chapter 84 of
title 5, United States Code, are determined based on the law in effect
at the time of any subsequent separation from service.
(b) After an individual ends phased retirement status to return to
regular employment status, for the purposes of subchapter III of
chapter 83 or chapter 84 of title 5, United States Code, at the time of
the subsequent separation from service, the phased retirement period
will be treated as if it had been a period of part-time employment with
the work schedule described in Sec. 848.202(a)(1) and (b). The part-
time proration adjustment for the phased retirement period will be
based upon the individual's officially established part-time work
schedule, with no credit for extra hours worked. In determining the
individual's deemed rate of basic pay during the phased retirement
period, only basic pay for hours within the individual's officially
established part-time work schedule may be considered. No pay received
for other hours during the phased retirement period may be included as
part of basic pay for the purpose of computing retirement benefits,
notwithstanding the normally applicable rules.
(c) The restrictions in Sec. Sec. 848.601 and 848.602 regarding
when an individual must complete a deposit for civilian service, a
redeposit for civilian service, or a deposit for military service do
not apply when a phased retiree ends phased retirement status to return
to regular employment status under this section.
Subpart D--Entering Full Retirement Status
Sec. 848.401 Application for full retirement status.
(a) Election of full retirement. (1) A phased retiree may elect to
enter full retirement status at any time by submitting to OPM an
application for full retirement in accordance with Sec. 841.202. This
includes an election made under Sec. 848.205(j)(6) in lieu of a
mandated return to regular employment status. Upon making such an
election, a phased retiree is entitled to a composite retirement
annuity.
(2) A phased retiree may cancel an election of full retirement
status and withdraw an application for full retirement by submitting a
signed written request with the agency and obtaining the approval of an
authorized agency official before the commencing date of the composite
retirement annuity.
(b) Deemed election of full retirement. A phased retiree who is
separated from phased employment for more than 3 days enters full
retirement status. The individual's composite retirement annuity will
begin to accrue on the commencing date of the composite annuity, as
provided in Sec. 848.402, and payment will be made after he or she
submits an application in accordance with Sec. 841.202 of this chapter
for the composite retirement annuity.
(c) Survivor election provisions. An individual applying for full
retirement status under this section is subject to the survivor
election provisions of subpart F of 5 CFR part 842.
Sec. 848.402 Commencing date of composite retirement annuity.
(a) The commencing date of the composite retirement annuity of a
phased retiree who enters full retirement status is the day after
separation.
(b) A phased retirement annuity terminates upon separation from
service.
Subpart E--Computation of Phased Retirement Annuity at Phased
Retirement and Composite Retirement Annuity at Full Retirement
Sec. 848.501 Computation of phased retirement annuity.
A phased retiree's phased retirement annuity equals the product
obtained by multiplying the amount of annuity computed under 5 U.S.C.
8415, excluding reduction for survivor annuity, that would have been
payable to the phased retiree if, on the date on which the phased
retiree enters phased retirement, the phased retiree had separated from
service and retired under 5 U.S.C. 8412(a) or (b), by the phased
retirement percentage for the phased retiree.
[[Page 33938]]
Sec. 848.502 Computation of composite annuity at final retirement.
(a) Subject to the adjustment described in paragraph (c) of this
section, a phased retiree's composite retirement annuity at final
retirement equals the sum obtained by adding--
(1) The amount computed under Sec. 848.501(a), increased by cost-
of-living adjustments under Sec. 848.503(c); and
(2) The ``fully retired phased component'' computed under paragraph
(b) of this section.
(b)(1) Subject to the requirements described in paragraphs (b)(2)
and (b)(3) of this section, a ``fully retired phased component'' equals
the product obtained by multiplying--
(i) The working percentage; by
(ii) The amount of an annuity computed under 5 U.S.C. 8415 that
would have been payable at the time of full retirement if the
individual had not elected phased retirement status and as if the
individual was employed on a full-time basis in the position occupied
during the phased retirement period and before any reduction for
survivor annuity.
(2) In applying paragraph (b)(1)(ii) of this section, the
individual must be deemed to have a full-time schedule during the
period of phased retirement. The deemed full-time schedule will consist
of five 8-hour workdays each workweek, resulting in a 40-hour workweek.
In determining the individual's deemed rate of basic pay during phased
retirement, only basic pay for hours within the deemed full-time
schedule will be considered, consistent with the definition of ``full-
time'' in Sec. 848.102. Any premium pay creditable as basic pay for
retirement purposes for overtime work or hours outside the full-time
schedule that an employee was receiving before phased retirement, such
as standby duty pay under 5 U.S.C. 5545(c)(1) or customs officer
overtime pay under 19 U.S.C. 267(a), may not be considered in
determining a phased retiree's deemed rate of basic pay during phased
retirement.
(3) In computing the annuity amount under paragraph (b)(1) of this
section, the amount of unused sick leave credit equals the result of
dividing the applicable percentage under 5 U.S.C. 8415(l) of the days
of unused sick leave to the employee's credit at separation for full
retirement, by the working percentage.
(c) The composite retirement annuity computed under paragraph (a)
of this section is adjusted by applying any reduction for any survivor
annuity benefit.
Sec. 848.503 Cost-of-living adjustments.
(a) The phased retirement annuity under Sec. 848.501 is increased
by cost-of-living adjustments in accordance with 5 U.S.C. 8462.
(b) A composite retirement annuity under Sec. 848.502 is increased
by cost-of-living adjustments in accordance with 5 U.S.C. 8462, except
that 5 U.S.C. 8462(c)(1) does not apply.
(c)(1) For the purpose of computing the amount of phased retirement
annuity used in the computation under Sec. 848.502(a)(1), the initial
cost-of-living adjustment applied is prorated in accordance with 5
U.S.C. 8462(c)(1).
(2) If the individual enters full retirement status on the same day
as the effective date of a cost-of-living adjustment (usually December
1st), that cost-of-living adjustment, if applicable under 5 U.S.C.
8462, is applied to increase the phased retirement annuity used in the
computation under Sec. 848.502(a)(1).
Sec. 848.504 Non-eligibility for annuity supplement.
A phased retiree is not eligible to receive an annuity supplement
under 5 U.S.C. 8421.
Subpart F--Opportunity of a Phased Retiree to Pay Deposit or
Redeposit for Civilian or Military Service
Sec. 848.601 Deposit for civilian service for which no retirement
deductions were withheld and redeposit for civilian service for which
retirement deductions were refunded to the individual.
Any deposit under Sec. 842.304 and Sec. 842.305 of this chapter,
or redeposit under 5 U.S.C. 8422(i), that an employee entering phased
retirement wishes to make for civilian service must be paid within 30
days from the date OPM notifies the employee of the amount of the
deposit or redeposit, during the processing of the employee's
application for phased retirement. The deposit or redeposit amount will
include interest, computed to the effective date of phased retirement.
No deposit or redeposit payment may be made by the phased retiree when
entering full retirement status.
Sec. 848.602 Deposit for military service.
(a) A phased retiree who wishes to make a military service credit
deposit under Sec. 842.307 of this chapter for military service
performed prior to entering phased retirement status must complete such
a deposit no later than the day before the effective date of his or her
phased employment and the commencing date of the phased retirement
annuity. A military service credit deposit for military service
performed prior to an individual's entry into phased retirement status
cannot be made after the effective date of phased employment and the
commencing date of phased retirement annuity.
(b) A phased retiree who wishes to make a military service credit
deposit under Sec. 842.307 of this chapter for military service
performed after the effective date of phased employment and the
commencing date of phased retirement annuity and before the effective
date of the composite retirement annuity (e.g., due to the call-up of
the employee for active military service) must complete such a deposit
no later than the day before the effective date of his or her composite
retirement annuity.
Subpart G--Death Benefits
Sec. 848.701 Death of phased retiree during phased employment.
For the purpose of 5 U.S.C. chapter 84, subchapter IV--
(a) The death of a phased retiree is deemed to be a death in
service of an employee; and
(b) The phased retirement period is deemed to have been a period of
part-time employment with the work schedule described in Sec.
848.202(a)(1) and (b) for the purpose of determining survivor benefits.
The part-time proration adjustment for the phased retirement period
will be based upon the employee's officially established part-time work
schedule, with no credit for extra hours worked. In determining the
employee's deemed rate of basic pay during the phased retirement
period, only basic pay for hours within the employee's officially
established part-time work schedule may be considered. No pay received
for other hours during the phased retirement period may be included as
part of basic pay for the purpose of computing retirement benefits,
notwithstanding the normally applicable rules.
Sec. 848.702 Death of an individual who has separated from phased
employment and who dies before submitting an application for a
composite retirement annuity.
(a) For the purpose of 5 U.S.C. chapter 84, subchapter IV, an
individual who dies after separating from phased employment and before
submitting an application for composite retirement annuity is deemed to
have filed an application for composite retirement annuity with OPM.
(b) The composite retirement annuity of a phased retiree described
in paragraph (a) of this section is deemed to have accrued from the day
after separation through the date of death. Any unpaid composite
annuity accrued
[[Page 33939]]
during such period, minus any phased retirement annuity paid during
that period, will be paid as a lump-sum payment of accrued and unpaid
annuity, in accordance with 5 U.S.C. 8424(d) and (g).
Sec. 848.703 Lump-sum credit.
If an individual performs phased employment, the lump-sum credit as
defined in 5 U.S.C. 8401(19) will be reduced by any annuity that is
paid or accrued during phased employment.
Subpart H--Reemployment After Separation from Phased Retirement
Status
Sec. 848.801 Reemployment of an individual who has separated from
phased employment and who dies before submitting an application for a
composite retirement annuity.
A phased retiree who has been separated from employment for more
than 3 days and who has entered full retirement status, but who has not
submitted an application for composite retirement annuity, is deemed to
be an annuitant receiving annuity from the Civil Service Retirement and
Disability Fund during any period of employment in an appointive or
elective position in the Federal Government.
Subpart I--Mentoring
Sec. 848.901 Mentoring.
(a) A phased retiree, other than an employee of the United States
Postal Service, must spend at least 20 percent of his or her working
hours in mentoring activities as defined by an authorized agency
official. For purposes of this section, mentoring need not be limited
to mentoring of an employee who is expected to assume the phased
retiree's duties when the phased retiree fully retires.
(b) An authorized agency official may waive the requirement under
paragraph (a) of this section in the event of an emergency or other
unusual circumstances (including active duty in the armed forces) that,
in the authorized agency official's discretion, would make it
impracticable for a phased retiree to fulfill the mentoring
requirement.
PART 870--FEDERAL EMPLOYEES' GROUP LIFE INSURANCE PROGRAM
0
42. The authority citation for part 870 continues to read as follows:
Authority: 5 U.S.C. 8716; Subpart J also issued under section
599C of Pub. L. 101-513, 104 Stat. 2064, as amended; Sec.
870.302(a)(3)(ii) also issued under section 153 of Pub. L. 104-134,
110 Stat. 1321; Sec. 870.302(a)(3) also issued under sections
11202(f), 11232(e), and 11246(b) and (c) of Pub. L. 105-33, 111
Stat. 251, and section 7(e) of Pub. L. 105-274, 112 Stat. 2419; Sec.
870.302(a)(3) also issued under section 145 of Pub. L. 106-522, 114
Stat. 2472; Secs. 870.302(b)(8), 870.601(a), and 870.602(b) also
issued under Pub. L. 110-279, 122 Stat. 2604; Subpart E also issued
under 5 U.S.C. 8702(c); Sec. 870.601(d)(3) also issued under 5
U.S.C. 8706(d); Sec. 870.703(e)(1) also issued under section 502 of
Pub. L. 110-177, 121 Stat. 2542; Sec. 870.705 also issued under 5
U.S.C. 8714b(c) and 8714c(c); Public Law 104-106, 110 Stat. 521.
0
43. Amend Sec. 870.101 by revising the definition of ``date of
retirement'' to read as follows:
Sec. 870.101 Definitions.
* * * * *
Date of retirement, as used in 5 U.S.C. 8706(b)(1)(A), means the
starting date of annuity. For phased retirees, as defined in 5 U.S.C.
8336a and 8412a, the date of retirement is the date the individual
enters full retirement status.
* * * * *
0
44. Amend Sec. 870.204 by adding paragraph (h) to read as follows:
Sec. 870.204 Annual rates of pay.
* * * * *
(h) Notwithstanding any other provision of this section, the annual
pay for a phased retiree, as defined in 5 U.S.C. 8336a and 8412a, is
deemed to be the rate of a full-time employee in the position to which
the phased retiree is appointed, as determined under 5 CFR
831.1715(a)(2) or 848.205(a)(2), as applicable.
PART 890--FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM
0
45. The authority citation for part 890 continues to read as follows:
Authority: 5 U.S.C. 8913; Sec. 890.301 also issued under sec.
311 of Pub. L. 111-03, 123 Stat. 64; Sec. 890.111 also issued under
section 1622(b) of Pub. L. 104-106, 110 Stat. 521; Sec. 890.112 also
issued under section 1 of Pub. L. 110-279, 122 Stat. 2604; 5 U.S.C.
8913; Sec. 890.803 also issued under 50 U.S.C. 403p, 22 U.S.C. 4069c
and 4069c-1; subpart L also issued under sec. 599C of Pub. L. 101-
513, 104 Stat. 2064, as amended; Sec. 890.102 also issued under
sections 11202(f), 11232(e), 11246(b) and (c) of Pub. L. 105-33, 111
Stat. 251; and section 721 of Pub. L. 105-261, 112 Stat. 2061.
0
46. Amend Sec. 890.101 by revising the definition of ``immediate
annuity'' to read as follows:
Sec. 890.101 Definitions; time computations.
* * * * *
Immediate annuity means an annuity which begins to accrue not later
than 1 month after the date enrollment under a health benefits plan
would cease for an employee or member of family if he or she were not
entitled to continue enrollment as an annuitant. Notwithstanding the
foregoing, an annuity which commences on the birth of the posthumous
child of an employee or annuitant is an immediate annuity. For an
individual who separates from service upon meeting the requirements for
an annuity under Sec. 842.204(a)(1) of this chapter, immediate annuity
includes an annuity for which the commencing date is postponed under
Sec. 842.204(c). For phased retirees, as defined in 5 U.S.C. 8336a and
8412a, a composite retirement annuity is an immediate annuity.
* * * * *
0
47. Amend Sec. 890.501 by adding paragraph (h) to read as follows:
Sec. 890.501 Government contributions.
* * * * *
(h) Notwithstanding 5 U.S.C. 8906, the Government contribution for
phased retirees, as defined in 5 U.S.C. 8336a and 8412a, is the same as
that for employees and annuitants as fixed by paragraphs (a) and (b) of
this section.
[FR Doc. 2013-13182 Filed 6-4-13; 8:45 am]
BILLING CODE 6325-39-P