Phased Retirement Questions – Who is Responsible?

Who Is Responsible for Making it Work?

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During the public comments period for phased retirement there were a number of questions and comments that surfaced either from agencies, unions or individuals.  It might add to our information to discuss a few of them and also use the questions and comments as a teachable moment.

Phased Retirement and the TSP

One question was about the Thrift Savings Plan (TSP).  Will those employees participating in phased retirement still be able to participate in the TSP?   The program is designed to allow phased retirement participants to work part-time and draw a part-time federal retirement annuity giving them perhaps the best of both worlds – work and retirement.  Since the TSP administered by the Thrift Savings Investment Board is a defined contributions plan where contributions are made via payroll deduction, then if you are working and getting a paycheck, you can participate in the TSP.  The individuals are not fully retired as in receiving a total annuity carrying the distinction of annuitant, where there are no payroll deductions. Therefore, these individuals still qualify to participate in the TSP.

Phased Retirement and Taxes

Another question came up about taxes and how OPM would look at taxes.  The Office of Personnel Management in its role as custodian of all federal human capital is statutorily required to provide the Internal Revenue Service with such relevant information as requested.  However, the Office of Personnel Management has no jurisdiction over administering the tax code, that matter falls completely within the auspices of the Internal Revenue Service.  How the IRS manages phased retirement regarding the taxation of Social Security or a Federal Annuity has yet to be seen.

Phased Retirement – Overtime and Holidays

Then there was the concern about overtime and holidays for part-time employees or phased retirement participants.  According to the Fair Labor Standards Act (FLSA) those persons falling within the category of non-exempt employees receive overtime when they have worked more than 8 hours per days or more than 40 hours in a work-week. The same would apply for compensatory time.  Since the phased retirement participants are scheduled to work part-time then this factor should not impact them.  If, however the situation arises, the same guidelines would be followed in accordance with FLSA. Certain categories of employees, particularly those designated as supervisors and managers are exempt from the requirements of FLSA.

If a part-time employee is scheduled to work on a day that falls on a holiday, then the day is also a holiday for the employee.  If the employee works 4 hours per day, then 4 hours would serve as holiday pay.  If the holiday falls on a nonworking day then the employee is not entitled to an in lieu of holiday.

The Office of Personnel Management is tasked with handling all human resource and human capital issues for the United States Government, all other matters fall within the respective agencies.

P. S.  Always Remember to Share What You Know.

OTHER PHASED RETIREMENT RELATED ARTICLES

Explanation of Phased Retirement

Phased Retirement’s Debut

Phased Retirement – Closing the Knowledge Gap

Phased Retirement – Participation

Phased Retirement – Has Its Time Come?

The Phased Retirement Annuity