CSRS Annuity
Annuity Stops
Reemployment will cause your annuity to stop if–
- You are a disability annuitant whom OPM has found recovered or restored to earning capacity prior to reemployment;
- You are a disability annuitant who was medically disqualified for continued membership in the National Guard;
- Your annuity is based on an involuntary separation and your new appointment is permanent in nature; or
- You received a Presidential appointment subject to retirement deductions.
Federal Employees Health Benefits Coverage (FEHB)
If your annuity stops upon reemployment, your health insurance coverage as an annuitant stops. If your appointment is one that gives you eligibility for FEHB coverage, you can enroll in the program when you are reemployed.
Federal Employees Group Life Insurance Coverage (FEGLI)
If your annuity stops upon reemployment, your life insurance as an annuitant stops without a right to convert to an individual policy. You acquire life insurance coverage as an employee under the same conditions as any other employee who is rehired in the Federal service.
Future Benefits
When your reemployment ends, a new determination about your rights to retirement benefits will be made. Your prior retirement benefit generally has no impact on your new retirement benefit.
Dual Compensation Waiver
If reemployed with a Department of Defense agency, you are subject to a dual compensation waiver that allows you to be reemployed with receipt of both annuity and salary. You will not be entitled to further retirement benefits under this waiver. If you retire under a discontinued service provision, you may elect to not receive this waiver and become subject to the CSRS reemployment provisions, which will effectively make you an employee since your annuity would terminate.
In addition, there is a temporary provision of the law that allows you to be reemployed on a limited basis with receipt of both annuity and salary. See Special Reemployment Provision of PL111-84 .
Annuity Continues
If your annuity does not stop under the rules above, you will continue to receive your CSRS annuity while you are working. Your pay will be reduced by the amount of your annuity paid for the period you work. If you do not work full time, the reduction in pay will be adjusted proportionately.
There is a temporary provision of the law that allows you to be reemployed on a limited basis with receipt of both annuity and salary. See Special Reemployment Provision of PL111-84.
Federal Employees Health Benefits Coverage (FEHB)
If your annuity continues after you are reemployed, your FEHB coverage will generally be withheld by your agency in order to take advantage of the premium conversion for health benefits. Your agency should alert OPM to your reemployment and inform OPM that they will take over your FEHB coverage. OPM will suspend your coverage as an annuitant until you have separated from your reemployed position. If your appointment does not make you eligible for FEHB with the agency or if you elect not to participate in HB premium conversion with the agency, OPM will continue to withhold premiums from your annuity payment.
Federal Employees Group Life Insurance Coverage (FEGLI)
If your annuity continues after you are reemployed, you retain the life insurance you have as a retiree. However, if the type of appointment you have makes you eligible for FEGLI coverage as an employee, any Basic Life insurance, Standard Option (Option A), and Family Optional (Option C) insurance you have as an annuitant are suspended and you will have coverage as an employee. If you have Additional Optional (Option B) insurance, you may continue your Option B annuitant, or elect to have it as an employee.
Future Benefits
Reemployment may increase your retirement and death benefits. As a reemployed annuitant, you can earn either a-
- Supplemental annuity, or
- Redetermined annuity.
A supplemental annuity is an annuity that is added on to your present annuity. If you work as a reemployed annuitant on a full time, continuous basis for at least 1 year, you may be entitled to a supplemental annuity. If you work part time, you must work a proportionately longer period to earn a supplemental annuity.
A redetermined annuity is a recomputed annuity that takes the place of your present annuity. If your reemployment continues for at least 5 years, or the part-time equivalent, and you qualify for a retirement upon separation from your reemployment service you may elect a redetermined annuity.
Intermittent service cannot be counted in establishing eligibility for a supplemental or redetermined annuity, and cannot be used in the computation of a supplemental annuity.
CSRS reemployed annuitant service cannot be credited in a supplemental or redetermined annuity unless a deposit is paid after separation, or retirement deductions are withheld. If you are reemployed in a full-time or part-time position, you may elect to have retirement deductions withheld from your pay. The amount of retirement deductions or deposit is a percentage of your basic pay before it is reduced by the amount of your annuity.
If you die while reemployed, after establishing eligibility for either a supplemental or redetermined annuity, your surviving spouse may have his or her survivor benefit either increased or recomputed.
Dual Compensation Waivers
There are two laws that permit reemployment without salary offset or benefit termination.
Special Reemployment Provision of PL 108-136
Under Public Law 108-136, effective November 24, 2003, reemployment with a Department of Defense (DoD) agency is automatically under a dual compensation waiver. This means that DoD can reemploy an annuitant without taking an offset of salary or without OPM terminating the annuity if the annuitant retired under a CSRS discontinued service retirement. A CSRS discontinued service annuitant may elect to waive the dual compensation and become an employee (that is, their annuity will be terminated). A disability annuitant would still be subject to medical recovery (before age 60) and restored to earning capacity criteria. However, under the special DoD dual compensation waiver, a disability annuitant would not be subject to administrative recovery. If someone is reemployed under a dual compensation waiver, no further retirement benefits, such as a supplemental or redetermined annuity, are payable. The agency still needs to contact OPM regarding the reemployment since health benefits and life insurance need to be handled in the same manner as any reemployed annuitant.
Special Reemployment Provision of PL111-84 (The National Defense Authorization Act)
Public Law 111-84, approved on October 28, 2009, allows reemployment of CSRS and FERS annuitants on a limited basis with receipt of both annuity and salary. This provision applies to Executive agencies (excluding the Department of Defense and GAO), the Postal Service, and the Judicial and Legislative Branch agencies.
This authority may be used by agencies when they determine that it is necessary to-
- Fulfill functions critical to the mission of the agency, or any component of that agency;
- Assist in the Implementation of oversight of the American Recovery and Reinvestment Act of 2009 or the Troubled Asset Relief Program under title I of the Emergency Economic Stabilization Act of 2008.
- Assist in the development, management, or oversight of agency procurement actions;
- Assist the Inspector General for the agency in the performance of the mission of the Inspector General;
- Promote appropriate training or mentoring programs of employees;
- Assist in the recruitment or retention of employees; or
- Respond to an emergency involving a direct threat to life or property or other unusual circumstances.
Individuals reemployed under this provision, serve under appointments limited to a year or less. An annuitant may not serve under this provision for more than 520 hours of service during the period ending 6 months following the individual's annuity commencing date; for more than 1040 hours of service during any 12-month period; or for more than a total of 3120 hours. Individuals employed under these provisions are not entitled to any additional annuity benefits based upon that employment.
This provision expires on October 27, 2014.
Special Information for CSRS Disability Annuitants Considering Federal Reemployment
- If you are reemployed on a permanent basis in a position equivalent in grade and pay to the position from which you retired, OPM may find that you have recovered from your disability.
- If you are reemployed subject to medical and physical qualification standards equivalent to those of the position from which you retired, OPM may find that you have recovered from your disability.
- The pay of the position in which you are reemployed, prior to the offset of annuity, will be included as earnings in determining whether the disability annuity will stop due to restoration to earning capacity.
- Receipt of, or continued entitlement to receive, full or partial injury compensation benefits from the Department of Labor’s Office of Workers’ Compensation during reemployment, when those benefits are based on the same injury or medical condition that is the basis for OPM’s award of disability retirement, is conclusive evidence (unless there is contravening medical evident) that you have not recovered from your disability.
- If you are age 60 or over, your annuity cannot be stopped because of your earnings, and OPM can find that you are recovered only if you request to be found recovered.
Federal Employees Dental and Vision Program (FEDVIP)
Not receiving an annuity
If you are no longer an annuitant, then your FEDVIP coverage as an annuitant ends. If your appointment is one that gives you eligibility for FEHB coverage, then you may enroll in the FEDVIP program when you are reemployed.
Still receiving an annuity
If you go back to work and you are in a position that conveys FEDVIP eligibility, you must contact BENEFEDS (1-877-888-3337), if you want your premiums to be deducted from your paychecks. Most reemployed annuitants want to make that change because retirees pay FEDVIP premiums with post-tax dollars and employees pay FEDVIP premiums with pre-tax dollars. If your new position does not convey FEDVIP eligibility you may retain the coverage as an annuitant.
Employment in the Private Sector
Effect on Your Basic Annuity:
- If you retired under CSRS -
CSRS Basic Benefit
Your employment outside the Federal service will not affect your basic annuity payments unless you’re receiving a disability annuity and are under age 60. If you’re a disability retiree under age 60, you will be subject to the 80% earnings limit. You reach the 80% earnings limit if, in any calendar year, your income from wages and self-employment is at least 80 percent of the current rate of basic pay for the position from which you retired.
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FERS Annuity (Basic Benefit)
Annuity Stops
Reemployment will cause your FERS annuity to stop if–
- You are a disability annuitant whom OPM has found recovered or restored to earning capacity prior to reemployment;
- You are a disability annuitant who was medically disqualified for continued membership in the National Guard;
Federal Employees Health Benefits Coverage (FEHB)
If your annuity stops upon reemployment, your health insurance coverage as an annuitant stops. If your appointment is one that gives you eligibility for FEHB coverage, you can enroll in the program when you are reemployed.
Federal Employees Group Life Insurance Coverage (FEGLI)
If your annuity stops upon reemployment, your life insurance as an annuitant stops without a right to convert to an individual policy. You acquire life insurance coverage as an employee under the same conditions as any other employee who is rehired in the Federal service.
Federal Employees Dental and Vision Program (FEDVIP)
Not receiving an annuity
If you are no longer an annuitant, then your FEDVIP coverage as an annuitant ends. If your appointment is one that gives you eligibility for FEHB coverage, then you may enroll in the FEDVIP program when you are reemployed.
Still receiving an annuity
If you go back to work and you are in a position that conveys FEDVIP eligibility, you must contact BENEFEDS (1-877-888-3337), if you want your premiums to be deducted from your paychecks. Most reemployed annuitants want to make that change because retirees pay FEDVIP premiums with post-tax dollars and employees pay FEDVIP premiums with pre-tax dollars. If your new position does not convey FEDVIP eligibility you may retain the coverage as an annuitant.
Future Benefits
When your annuity stops, you have the same status as any other Federal employee employed in an equivalent position with a similar service history. When you again leave Federal service, you will be entitled to either an immediate or deferred annuity based on this new separation. Generally, the annuity will be computed on the basis of your service and salary history at the time of the future separation from Federal service.
If reemployed with a Department of Defense agency, you are subject to a dual compensation waiver that allows you to be reemployed with receipt of both annuity and salary. You will not be entitled to further retirement benefits under this waiver. If you retired under a discontinued service provision, you may elect to not receive this waiver and become subject to the FERS reemployment provisions, which will apply an offset to your salary based on the monthly amount of your annuity. The reemployment service can be applied to your retirement depending on the amount of service you perform.
In addition, there is a temporary provision of the law that allows you to be reemployed on a limited basis with receipt of both annuity and salary. See Special Reemployment Provision of PL111-84 [62 KB].
Annuity Continues
If your annuity does not stop under the rules above, you will continue to receive your FERS annuity while you are working. Your pay will be reduced by the amount of your annuity paid for the period you work. If you do not work full time, the reduction in pay will be adjusted proportionately.
There is a temporary provision of the law that allows you to be reemployed on a limited basis with receipt of both annuity and salary. See Special Reemployment Provision of PL111-84.
Federal Employees Health Benefits Coverage (FEHB)
If your annuity continues after you are reemployed, your FEHB coverage will generally be withheld by your agency in order to take advantage of the premium conversion for health benefits. Your agency should alert OPM of your reemployment and that they will take over your FEHB coverage. OPM will suspend your coverage as an annuitant until you have separated from your reemployed position. If your appointment does not make you eligible for FEHB with the agency or if you elect not to participate in HB premium conversion with the agency, OPM will continue to withhold premiums from your annuity payment.
Federal Employees Group Life Insurance Coverage (FEGLI)
If your annuity continues after you are reemployed, you retain the life insurance you have as a retiree. However, if the type of appointment you have makes you eligible for FEGLI coverage as an employee, any Basic Life insurance, Standard Option (Option A), and Family Optional (Option C) insurance you have as an annuitant are suspended and you will have coverage as an employee. You have the option of keeping Additional Optional (Option B) as an annuitant or having it as an employee.
Future Benefits
Reemployment may increase your retirement and death benefits. As a reemployed annuitant, you can earn either a-
- supplemental annuity,or
- redetermined annuity.
A supplemental annuity is an annuity that is added on to your present annuity. If you work as a reemployed annuitant on a full time, continuous basis for at least 1 year, you may be entitled to a supplemental annuity. If you work part-time, you must work a proportionately longer period to earn a supplemental annuity.
A redetermined annuity is a recomputed annuity that takes the place of your present annuity. If your reemployment continues for at least 5 years, or the part-time equivalent, and if you qualify for a retirement at separation from your reemployment service you may elect a redetermined annuity. Intermittent service cannot be counted in establishing eligibility for a supplemental or redetermined annuity, and cannot be used in the computation of a supplemental annuity.
If you die while reemployed, after establishing eligibility for either a supplemental or redetermined annuity, your surviving spouse may have his or her survivor benefit either increased or recomputed.
Dual Compensation Waivers
There are two laws that permit reemployment without salary offset or benefit termination.
Special Reemployment Provision of PL 108-136
Under Public Law 108-136, effective November 24, 2003, reemployment with a Department of Defense (DoD) agency is automatically under a dual compensation waiver. This means that DOD can reemploy an annuitant without taking an offset of salary. A FERS discontinued service annuitant may elect to waive the dual compensation and come under the rules for a reemployed annuitant. A disability annuitant would still be subject to medical recovery (before age 60) and restored to earning capacity criteria. However, under the special DoD dual compensation waiver, a disability annuitant would not be subject to administrative recovery. If someone is reemployed under a dual compensation waiver, no further retirement benefits, such as a supplemental or redetermined annuity, are payable. The agency still needs to contact OPM regarding the reemployment since health benefits and life insurance need to be handled in the same manner as any reemployed annuitant.
Special Reemployment Provision of PL111-84 (The National Defense Authorization Act)
Public Law 111-84, approved on October 28, 2009, allows reemployment of CSRS and FERS annuitants on a limited basis with receipt of both annuity and salary. This provision applies to Executive agencies (excluding the Department of Defense and GAO), the Postal Service, and the Judicial and Legislative Branch agencies.
This authority may be used by agencies when they determine that it is necessary to-
- Fulfill functions critical to the mission of the agency, or any component of that agency;
- Assist in the Implementation of oversight of the American Recovery and Reinvestment Act of 2009 or the Troubled Asset Relief Program under title I of the Emergency Economic Stabilization Act of 2008.
- Assist in the development, management, or oversight of agency procurement actions;
- Assist the Inspector General for the agency in the performance of the mission of the Inspector General;
- Promote appropriate training or mentoring programs of employees;
- Assist in the recruitment or retention of employees; or
- Respond to an emergency involving a direct threat to life or property or other unusual circumstances.
Individuals reemployed under this provision, serve under appointments limited to a year or less. An annuitant may not serve under this provision for more than 520 hours of service during the period ending 6 months following the individual’s annuity commencing date; for more than 1040 hours of service during any 12-month period; or for more than a total of 3120 hours. Individuals employed under these provisions are not entitled to any additional annuity benefits based upon that employment.
This provision expires on October 27, 2014.
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Special Information for FERS Disability Annuitants Considering Federal Reemployment
- If you are reemployed on a permanent basis in a position equivalent in grade and pay to the position from which you retired, OPM may find that you have recovered from your disability.
- If you are reemployed subject to medical and physical qualification standards equivalent to those of the position from which you retired, OPM may find that you have recovered from your disability.
- The pay of the position in which you are reemployed, prior to the offset of annuity, will be included as earnings in determining whether the disability annuity will stop due to restoration to earning capacity.
- Receipt of, or continued entitlement to receive, full or partial injury compensation benefits from the Department of Labor’s Office of Workers’ Compensation during reemployment, when those benefits are based on the same injury or medical condition that is the basis for OPM’s award of disability retirement, is conclusive evidence (unless there is contravening medical evident) that you have not recovered from your disability.
- If you are age 60 or over, your annuity cannot be stopped because of your earnings, and OPM can find that you are recovered only if you request to be found recovered.
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Employment in the Private Sector
Effect on Your Basic Annuity:
If you retired under FERS
FERS Basic Benefit
Your employment outside the Federal service will not affect your basic CSRS or FERS annuity payments unless you’re receiving a disability annuity and are under age 60. If you’re a disability retiree under age 60, you will be subject to the 80% earnings limit. You reach the 80% earnings limit if, in any calendar year, your income from wages and self-employment is at least 80 percent of the current rate of basic pay for the position from which you retired.
FERS Annuity Supplement
If you are receiving an annuity supplement, it will be reduced based on how much you earn over the Social Security annual earnings limit.
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