RIF & your retirement benefits
Yes, if there’s a RIF, you may be eligible for an immediate pension and continuation of your FEHB.
As shocking as this sounds, it’s actually pretty straight forward.
With a RIF, you may be eligible for a retirement known as Discontinued Service Retirement (DSR). DSR applies to employees who are separated from federal service involuntarily—such as through job abolishment, reassignment outside the commuting area, or reduction in force (R.I.F.). If you were fired for cause (for example, misconduct) you are not eligible for DSR.
Who’s Eligible?
To qualify for DSR, an employee must meet the same age and service requirements as we find with VERA, namely:
- Be at least 50 years old with a minimum of 20 years of creditable Federal service; or
- Be of any age with a minimum of 25 years of creditable Federal service.
However, there’s one more important caveat. With a RIF, the agency may offer you a “reasonable offer.” If you decline a “reasonable offer” you can no longer claim a DSR because you declined a reasonable job offer that could have prevented separation (meaning, you quit, as opposed to having your position “discontinued”).
Who determines whether the offer is “reasonable?” Not you. But OPM has guidelines as what counts as “reasonable offer:
- An offer in writing
- With your agency (or successor agency),
- Within your commuting area, unless you have a mobility agreement with your agency,
- No more than two levels below your current grade or pay level
- A good match for your qualifications
(Each of these details can actually be debated and fought – I’ll leave that to you and your attorney.)
Assuming you do not decline a reasonable offer, and you meet the age and service requirements mentioned above, you can retire under the DSR with the following benefits:
- Full, unreduced pension. Your pension will be calculated just a regular retirement, using your high-3 average salary, creditable service, with unused sick leave adding service credit. The annuity “commencement date” starts the day after separation.
- You will also be able to receive the FERS annuity supplement starting from the age of MRA until age 62.
- FEHB & FEGLI – assuming you satisfied the 5-year rule and other requirements
- Denta, Vision, LTCFEDS
- TSP access will be dependent on age. (See this article about accessing TSP before 59.5)
Please note: severance is not payable when DSR applies.
Also note, your pension may have the same backlog issues as regular retirees, meaning you may not get your full pension check until a few months into retirement.
