Federal Employee's CSRS & FERS Federal Civil Service Retirement
& Financial Planning Resources
There are opportunities for retirees to return to federal service under the
rehired annuitant program. In most cases you will keep your full annuity however
your new federal salary will be reduced by the amount of your annuity in most
retirees. The salary reduction is waived for certain critical occupations. There
are also opportunities to return to work with your agency as a contractor
employee or under a personal services contact.
It is important to note that federal retirees can go back to work in the private
sector without any impact on their federal annuity. You will continue to receive
your full annuity and all benefits if you decide to work in the private sector
after you retiree from federal service.
Rehired Annuitant Menu
Reemployment in the federal sector may affect your annuitant status and
whether you will continue to receive annuity during and after the period of
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 not disabled for your
National Guard Technician position but were awarded disability annuity
because you were medically disqualified for continued membership in the
If your annuity does not stop under the above conditions, then you will
continue to receive it while working. Your pay will be reduced by the amount of
annuity paid for the period you work. If you do not work full time, the
reduction in pay will be adjusted proportionately. However, some pay is not
subject to this reduction for annuity. Pay is not reduced for annuity for a
period during which you have elected to receive injury compensation benefits in
lieu of annuity or when you receive a lump-sum payment of annual leave on
separation. Unless your reemployment is on an intermittent basis, retirement
deductions will be withheld from your pay. The retirement deductions are a
percentage of your basic pay, before it is reduced for annuity.
Not all of the above rules apply to all reemployed annuitants. If you are
- Under special provisions for positions for which there is exceptional
difficulty in recruiting or retaining a qualified employee or there is a
direct threat to life or property, or other unusual circumstances warranting
- On an interim basis, as a consequence of an administrative or
judicial body reviewing the grounds for your separation; or
- Under another retirement system for Federal employees
Section 1122 of the National Defense Authorization Act for Fiscal Year 2010
allows reemployment of CSRS and FERS annuitants on a limited basis with receipt
of both annuity and salary. The provisions apply to Executive agencies
(excluding the Department of Defense and General Accountability Office), the
Postal Service, the Judicial Branch, and Legislative Branch agencies (other than
GAO, which is excluded under both the Executive and Legislative Branch
The authority may be used by agencies when they determine that use is necessary
(A) fulfill functions critical to the mission of the agency, or any component of
(B) assist in the implementation or oversight of the American Recovery and
Reinvestment Act of 2009 (Public Law 111-5) or the Troubled Asset Relief Program
under title I of the Emergency Economic Stabilization Act of 2008 (12 U.S.C.
5201 et seq.);
(C) assist in the development, management, or oversight of agency procurement
(D) assist the Inspector General for the agency in the performance of the
mission of that Inspector General;
(E) promote appropriate training or mentoring programs of employees;
(F) assist in the recruitment or retention of employees; or
(G) respond to an emergency involving a direct threat to life of property or
other unusual circumstances.
Individuals reemployed will serve under appointments limited to a year or less.
An annuitant may not serve under the authority 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.
Reemployment may not exceed 2.5 percent of the full-time workforce at any
time, and if 1 percent is exceeded, agencies are required to provide an
explanation and justification to the Congress and OPM. Individuals employed
under these provisions will not be entitled to any additional annuity benefits
based upon that employment.
Agencies may begin using these waivers now.
Expiration of authority: This authority expires
on October 27, 2014.
Reference: Authorized under the National Defense
Authorization Act for Fiscal Year 2010”, Public Law 111-84, signed on October
28, 2009, Section 1122 and 1123 – Part-Time Employment, summary from OPM, dated
Agencies initiate an agreement with a recent retirees to perform specific
functions under personal services contracts. Generally the agency includes
specific tasks and compensation in the agreement and it is for a defined
period of time. The retiree that is reemployed under a personal services
contract isn't considered a federal employee and the payment would not
effect his/her federal annuity payments. No benefits are included. The
agency will send out a 1099 IRS form instead of a W-2 at the end of the
year. Contract workers are considered self-employed and would be required to
pay both employer and employee FICA taxes.
Employees can also return to work in the same or similar job working for
a private contractor company after retiring. The employing company
typically provides benefits and the parties sign an agreement about the salary,
work schedule, and any other job requirements. The jobs are typically at
larger facilities and the retiree is no longer a federal employee. If you
work at a facility that has contractor support in your specialty contact
them after retiring to explore employment options. Many
opportunities exist for those willing to seek them out and employment as a
contractor will not affect your federal annuity. Contractors often offer
attractive 401K plans for employees that will afford you the opportunity to
increase your retirement savings. Working for a contractor can also
benefit CSRS retirees if they have less than 40 quarters for Social
Security. Many with less than 40 quarters will often be able to accrue
enough to qualify for Social Security down the road.
This section is excerpted from
OPM's RI90-18 Guide.
For information on FEGLI and FEHB coverage visit the OPM site to view the guide.
Back to Top
Back to Homepage