United States Department of Agriculture

Office of the Chief Financial Officer

National Finance Center

P.O. Box 60000 New Orleans Louisiana 70160

Effective Pay Period 06, 2015, the National Finance Center (NFC) will implement a "Phased Retirement" program in accordance with the Moving Ahead for Progress in the 21st Century Act. This law authorized changes to the Civil Service Retirement System (CSRS) and the Federal Employees Retirement System (FERS). The provisions of 5 United States Code (U.S.C.) 8336a and 5 U.S.C. 8412a and the regulations of 5 Code of Federal Regulations (CFR) part 831, subpart Q, and 5 CFR part 848 contain additional information concerning phased retirement.

Phased Retirement

Phased retirement allows full-time employees to work a part-time schedule while collecting partial retirement benefits. Phased retirement is creditable towards the 5 years of service needed to continue Federal Employees Group Life Insurance (FEGLI) coverage upon retirement.

Military Deposits

Military service deposits must be paid prior to entering phased retirement.

Federal Employees Group Life Insurance (FEGLI)

For the purposes of FEGLI, a phased retiree is deemed to be a full-time employee. Both the Federal Employees' Group Life Insurance withholding and the employer contribution will be the same amount as if the employee were a full-time employee. The coverage amount (including applicable accidental death and dismemberment coverage) is the same as it would be for a full-tme employee. Changes to FEGLI coverage will only be allowed in accordance with current FEGLI change regulations. Entry into a phased retirement program will not enable the employee to make changes to his/her FEGLI coverage.

Deductions for FEGLI coverage will continue to be made from an employee's salary. Deductions will not be taken from the employee's annuity while the employee is in a phased retirement program. Once the employee enters full retirement status, the deductions will then be taken from the employee's annuity.

Federal Employees Health Benefits (FEHB)

For the purposes of FEHB, a phased retiree is deemed to be a full-time employee. Both the FEHB withholding and the employer contribution will be the same amount as if the employee were a full-time employee. The coverage amount is the same as it would be for a full-time employee. Changes to FEHB coverage will only be allowed in accordance with current FEHB change regulations. Entry into a phased retirement program will not enable the employee to make changes to his/her FEHB coverage.

Deductions for FEHB coverage will continue to be made from an employee's salary. Deductions will not be taken from the employee's annuity while the employee is in a phased retirement program. When the employee enters full retirement status and is eligible to continue FEHB participation, the employee's FEHB participation will be transferred to the Office of Personnel Management (OPM). Also, if an employee is eligible for Medicare, that employee will have the same treatment for Medicare enrollment and coordination purposes.

Full-Time Employment

An employee may return to full-time employment (after entering phased retirement) providing that the Agency agrees. The partial annuity that the employee was receiving will terminate once the employee returns to full-time status. This return may only be done once.

Note: The employee cannot return to phased retirement after returning to full-time status.

Part-Time Employment

An employee may transition to part-time employment (after entering phased retirement) providing that the Agency agrees.

If an employee transitions to part-time employment, the employee must then pay the applicable premium for FEGLI and/or FEHB coverage.

Full Retirement

An employee in phased retirement may apply at any time for full retirement in the same manner as other employees. The employee does not have to obtain permission of the Agency to fully retire.

Nature of Action Codes (NOAC)

The following NOACs are being added to accommodate this program:

• NOAC 307, Full Retirement Status - Voluntary
• NOAC 308, Full Retirement Status - ILIS (in lieu of involuntary separation)
• NOAC 615, Phased Employment/Phased Retirement
• NOAC 616, Opt Out Phased Employment/Retirement

Legal Authority Codes

The following Legal Authority Codes are being added to accommodate this program:

• NOAC 307
  • SAF for Legal Authority 5 U.S.C. 8336a(e) for CSRS
  • SAG for Legal Authority 5 U.S.C. 8412a(e) for FERS
• NOAC 308
  • SAF for Legal Authority 5 U.S.C. 8336a(e)
  • SAG for Legal Authority 5 U.S.C. 8412a(e)
• NOAC 615:
  • SAB for Legal Authority 5 U.S.C. 8336a(c)(7) for CSRS
  • SAC for Legal Authority 5 U.S.C. 8412a(b)(6) for FERS
• NOAC 616:
  • SAD for Legal Authority 5 U.S.C. 8336a(g) for CSRS
  • SAE for Legal Authority 5 U.S.C. 8412a(g) for FERS
  • SBD for Legal Authority Reg. 831.1721(b) for CSRS
  • SBE for Legal Authority Reg. 848.301(b) for FERS

Remarks Codes

The following Remarks Codes are being added to accommodate this program:

• M11 - A change to the work schedule or the part-time hours worked during phased employment/phased retirement status will result in the termination of phased employment/phased retirement status and the phased retirement annuity.
• M12 - Employee may elect to enter full retirement status at any time by submitting application SF 2801 for CSRS or SF 3107 for FERS Federal Employees Retirement System.
• M13 - If employee’s Phased Retirement terminates for any reason, the individual may not re-elect Phased Retirement.
• M14 - Employee is required to spend 20 percent of their time mentoring.
• M15 - FEHB/FEGLI benefits are not affected by phased employment/phased retirement.
• M16 - The time spent in phased employment/retirement status will be credited as part-time service for annuity calculation purposes.
• M17 - Employee’s phased retirement annuity is terminated.
• M18 - Employee is entitled to a composite retirement annuity.
• M19 - Certify full time salary for FEGLI.

Systems and Applications

The following NFC systems and applications will be updated to accommodate the processing of phased retirement:

EmpowHR

EmpowHR will be updated to allow the new phased retirement NOACs.

Insight

The Insight menus will be modified to accept the new NOACs.

Personnel Input and Edit System (PINE)

New PINE edits will be added to avoid errors when processing phased retirement cases.

Retirement Processing System (RETM)

RETM will be updated to accept the new phased retirement NOACs, as well as three new Type Case codes (Application Tracking - Inquiry screen). The new codes are:

• 12 - Phased Ret (for NOAC 615)
• 13 - Full Ret Vol (for NOAC 307)
• 14 - Full Ret ILIS (for NOAC 308)

Web-based Entry, Processing, Inquiry, and Correction System (EPIC Web)

The Changes folder under Personnel Actions will be updated to allow users to enter phased retirement documents in EPIC Web.

webTA

The applicable Transaction Descriptors will be added to webTA in order to record phased retirement hours on an employee's Time and Attendance report.

Payroll/Personnel Procedures

The procedure manuals for these applications, which are available online at the NFC Web site, are being updated to include the information in this bulletin. To view and/or print these procedures, go to the NFC Home Page and click the Publications tab at the top of the page. At the Publications page's left-hand menu, select the applicable publication category to access the procedure manuals within that category.

Inquiries

For questions about NFC processing, authorized Servicing Personnel Office representatives should contact the NFC Contact Center at 1-855-NFC-4GOV (1-855-632-4468) or via the Internet using the Requester Console.

/s/
ANITA H. FINCHER, Director
Government Employees Services Division