What If I'm Forced Out of My Job?

So…..you’re getting fired? Or you think you might be getting fired?

How does that affect your retirement? What are your options?

I know there is a lot of stress and uncertainty right now. Something we government workers aren’t typically used to, unlike the private sector who worries about this stuff all the time. Let’s see if we can provide some clarity. This is going to be much like some sort of weird narrative flowchart since what can happen to you depends so much on exactly what position you hold in the government. The rules aren’t the same for everyone.

Here we go.

SPECIAL CATEGORY EMPLOYEES

We’ll start with these as they are by far the more complicated. If you’re a Regular FERS employee, you don’t need to read this part—skip ahead. Remember—Special Category Employees are those Law Enforcement, Firefighters and Air Traffic Controller Fersonians. The rest of you are in the Regular FERS category.

Eligibility

Quick recap on eligibility to retire on an immediate, unreduced annuity. You need to know that to see if you are close to being eligible. Maybe you can squeak over the finish line somehow—burn sick leave, hide, make a deal with your agency, whatever it takes.

You have to satisfy one of these paths:

1. 20 years in a FERS SCE job PLUS having reached your 50th birthday, or

2. 25 years in a FERS SCE job NO MATTER your age

(Which, to me, brings up the very first point—if you are currently eligible, what in the world are you stressing over? You have the ability to end this craziness at any second. You can literally just stand up, walk out, drive home, and never come back. There is no minimum amount of notice you have to give your agency to retire. Trust me on this. They may tell you that, but saying something don’t make it so. I won’t bother with all the cool stories I have of people just not showing up one day. Or calling the supervisor and saying, “Everything is in the G Ride in front of the house—come get it whenever.” If you’re eligible, you’re free. Period. You may be scared, but that doesn’t change the fact that you’re free anytime you want to be.)

Your questions:

• What if I have 23 years on but I’m only 48? You can’t retire

• What if I have 4 years of military and 18 years of FERS SCE time and I’m 50? You can’t retire

• What if I have 19.5 years of FERS SCE time but I have 6 months of Sick Leave built up? You can’t retire

• What if I have 10 years as a Deputy Marshal and 15 years as an FBI Agent? You can retire, no matter your age

• What if I have 20 years of FERS SCE time, I’m only 48, but I switch to a non-SCE job until my 50th birthday? You can retire on your 50th birthday

• What if I turn 50 later this year? You have to make it to your 50th birthday if you have less than 25 years of FERS SCE time. Working one day in the year you turn 50 is a myth. Working one day into the month you turn 50 is a myth.

• You probably have other questions on examples I didn’t name, but it’s very simple. If you don’t meet 20 years of FERS SCE time + 50 years of age, OR 25 years of FERS SCE time, then no matter your example, you can’t retire.

Now, on to what happens if you get fired…..

YOU GET FIRED BEFORE ELIGIBILITY

You have basically 3 options.

One is you can fight to get your job back. You can get an attorney, appeal and go through the Merit System Protection Board process to argue to get your job back. If you win, you typically get reinstated with back pay and other benefits as if you had never left.

Two is you can just be done with the government, never come back to work, not fight it and move on with your life. This will mean you take a big hit on your pension and benefits. If you never come back to the government, you will get 1% of whatever your High-3 was when you left. (No, you don’t get to keep that 1.7%, even if you’ve already done 20 years). Depending upon how much time you had on at the time of your firing determines when you can file with OPM to get some annuity. This is what is called a Deferred Annuity:

Less than 5 years of FERS service: You get nothing. Your contributions will be refunded to you

5-9 years of FERS service: You can file for an annuity at age 62 years of age. It will be 5-9% (1% per year) of whatever your High-3 was way back when you left.

10-19 years of FERS service: You can file for a reduced annuity at your MRA (57 for most of you SCEs these days, but could be 56), or an unreduced annuity at age 62.

20+ years of FERS service: You can file for a reduced annuity at your MRA, or an unreduced annuity at age 60.

In NONE of these scenarios will you receive the supplement, FEHB, FEGLI, credit for sick leave, etc. You lose all of that under a Deferred Retirement.

Three is unique if you’ve done 20+ years of FERS SCE time but you aren’t 50 yet. You have more options here. You could do the Deferred Retirement we just talked about….orrr….you could go live your life, wait until you turn 50, come back to the government in a FERS job, work for a pay period or two and then immediately retire with full SCE benefits.

Wait -WHAT?! How is this possible?

Remember the requirements? You have to have 20 years of SCE time and be 50? THERE IS NO REQUIREMENT TO BE IN AN SCE POSITION AT THE TIME OF RETIREMENT. NONE. I don’t care what your HR tells you. They are wrong. This is not that uncommon, frankly. I have seen many people do this. So has Dan Jamison. I know someone who is doing this very thing right now. In fact, on more than one occasion I’ve seen an FBI SA attorney complete their SCE time and become an AUSA (non-SCE) and then retire whenever under the SCE provisions. So there is no requirement to be in an SCE position at the time of retirement to obtain SCE retirements.

Read the FERSGUIDE for more information on this.

(As an aside, each one of you worried about your jobs right now should ABSOLUTELY come off of $18 and buy the FERSGUIDE. You need to know what you are entitled to so you can maximize your options. You need all the ammo you can get to fight if you find yourself in this situation.)

You are probably not going to get back into a FERS SCE job, but who cares—you don’t have to. ANY FERS job with FEHB benefits is fine. You can be a GS-2 somewhere for a pay period or two and then retire with your full benefits as an SCE. You’ve already satisfied your 20 years as an SCE. All you’re looking to do now, is retire from a FERS position after you are 50 years of age.

MISCONDUCT CAVEAT

There is one caveat to this. FERS HANDBOOK Chapter 46, Page 52, Subpart 46B3.3-1, Paragraph A provides for a condition to make the LEO or FF ineligible for an SCE retirement if removed “for cause on charges of misconduct or delinquency”. This is a tough one to reconcile because I have known people that have been fired for conduct who then came back after 50, then obtained their SCE retirement. So there must be a certain level of conduct that can trigger that? And it is clear it must be “MISCONDUCT”. Being let go for some other reason, like reduction in force, or resigning does not trigger this potential issue.

From a practical standpoint, most misconduct firings will entail a period of OPR, investigations, etc. And often the option to resign prior to termination, which of course would not trigger this potential issue. Resigning may preserve your ability to come back to work later. But may prevent you from appealing your termination? So you may want to speak to an employment attorney about this.

I don’t know if OPM applies this standard in every case. Clearly something is allowing these SCE’s to come back after 50 and retire under SCE provisions?

REGULAR FERS EMPLOYEES

Your eligibility is a little bit different. You have to satisfy one of three paths below for an immediate, unreduced annuity:

1. 30 years of service time and be at your MRA (55-57 years of age, depending upon your year of birth)

2. 20 years of service time and have reached your 60th birthday

3. 5 years of service time and have reached your 62nd birthday

(There is an ability to get an immediate, REDUCED annuity at MRA plus 10 years of service you can read up on if you think that would be best for you. You can leave but can lose up to 25% of your annuity this way).

Again, as I stated above to the SCEs: If you’re eligible, you’re free. Anytime you want to be.

If you get fired prior to meeting one of these, you have the following options:

One is appeal your termination and go through the MSPB process to try to get your job back. This will probably best be handled by obtaining an attorney that specializes in this.

Two is do nothing. Go live your life in the private sector and file for your deferred retirement benefits when you reach one of the above combinations of age and time. Regular FERS get 1% a year for all years (with the exception of the 20 +62 which you wouldn’t be in if you are getting fired, you could just retire) so you don’t have the same issue as losing the higher 1.7% like the SCEs I talk about above. Plus military time you’ve bought back counts towards your service time for eligibility, unlike the SCEs.

Three is go get hired somewhere else in the government and continue your FERS career (probably difficult in a hiring freeze era). You’ll pick up wherever you left off. Or, have a break in service before you come back—If you have the time on, but not the age, you can do something similar to number three above for the SCE.

Example: You were hired under FERS at age 22. You are now 52. You have 30 years on, but you are not 57 yet. If you are in the private sector for the next 5 years and then you turn 57, you could get a FERS job for a pay period or two (until FEHB kicks in) and you can immediately retire under the 30+MRA rules above, with full benefits.

OTHER CONSIDERATIONS

FEHB

What about FEHB? I thought you had to have that for 5 years prior to retirement? How can I have a break in service, then come back for only one pay period and retire with FEHB?

Because the breaks in service don’t count against the 5 year rule. It’s not 5 calendar years. It’s the last 5 years you worked under FERS. Example: 5 years of FEHB, then a break in service of 3 years and then getting rehired for 1 pay period = 5 years of continuous FEHB coverage prior to retirement. The break in service doesn’t count.

Chris, that goes against everything I’ve ever heard!

I understand. Lots of myths are hard to break. Especially if you get your FERS info from a certain Facebook page. Don’t take my word for it. Read OPM HERE.

SICK LEAVE CREDIT

Probably the least of anyone’s worries if you’re getting fired. Sick leave doesn’t really do that much. But if you retire on an immediate, unreduced annuity, you get credit for your sick leave. If you have a break in service and you come back to the government later after you are rehired, your sick leave balance you had when you left will be reinstated.

If you file a deferred retirement (you get fired or quit, never come back and then file in the future), you get no credit for sick leave.

TSP

To be vested in TSP (meaning you get all you’ve put in, all your gains, and all the government’s contributions) you need to be in the TSP for 3 years. The vast majority of you will have passed this hurdle a looong time ago. So this is probably not a worry. In fact, if you don’t have 3 years on the government, then you don’t have 5 years on and you can’t file for any type of retirement.

Do NOT believe any person (even HR) that says that if you get fired, you’ll lose your TSP. I’ve heard that already this week. Not true. It was something passed around alot during COVID too. Some managers were saying that if you got fired for not getting the vaccine, the agency would take their TSP back. 100% patently false (and probably illegal, honestly). Come on managers—look out for your people better than that!

VERA (Voluntary Early Retirement Authority)

You can read about this at that link, but I’ll summarize in broad strokes. This allows REGULAR FERS to retire under the provisions of the Special Category Employees, i.e. 20 and 50, or 25 years at any age.

If you’re already an SCE, I don’t know of any provision allowing you some sort of special SCE VERA, since VERA is already your normal retirement. I get this question a lot—-”Will my agency offer VERA to me as a Special Agent?” VERA is your normal retirement already. For you to retire earlier than your normal retirement, you’re going to need some sort of specially created thing. Which, hey, isn’t out of the realm of possibility in this environment!

SUMMARY

This is a whole universe of things not covered in this one article. Seriously, like entire chapters of the FERS Handbook. But this is the framework that you can use to start to plan your exit strategy or to mitigate the damage if it looks like you’re going to be terminated. Or if you just decide you’ve had enough of this experiment called federal employment, and you want to go back to the real world, this will give you a rough understanding of your options.

If I could give just ONE piece of advice: PLEASE, PLEASE do not trust the information you’re hearing on the various Facebook pages, Reddit, etc. I have seen tons of misinformation in the last couple of days. People are speaking with authority about stuff they couldn’t be more incorrect about. They sound completely ridiculous to those of us that know the law. Even members of Congress are spouting things completely untrue. Don’t fall into that trap. Go to the source. If you see a post or text that starts, “I heard….” understand that’s not a rule, that’s a rumor. Go to the government regulations.

There are some REALLY popular TSP and FERS Facebook pages that are 40% incorrect in just about everything that goes on by my estimation. Be very, very careful. If someone says “You can lose your TSP…” or some other myth, I would probably not listen to them again. There are plenty of others to listen to that aren’t crazy.

RESOURCES

FERS HANDBOOK

VERA

OPM ELIGIBILITY THRESHOLDS

TYPES OF RETIREMENTS (Voluntary, Early, Deferred)

John G’s SPREADSHEETS TO RUN YOUR NUMBERS

DAN JAMISON’S FERSGUIDE (REGULAR OR SPECIAL CATEGORY)

TOP 10 FAQ’S ABOUT VERA AND VSIP