What is a Voluntary Early Out?

otherwise be eligible.

An agency must request VERA and receive approval from the Office of Personnel

Management (OPM) before the agency may offer early retirement to its employees.

The approval from OPM will stipulate a period of time during which the option

will remain available. Agencies such as the Department of Defense that have been

granted agency-specific VERA are not required to seek OPM approval for their use

of this option.

an early out?

Voluntary Early Retirement offers apply to employees covered under both the

Civil Service

Retirement System (CSRS) and the href="http://www.myfederalretirement.com/public/169.cfm">Federal Employees

Retirement System (FERS) . When an agency has received VERA approval from

OPM, an employee who meets the general eligibility requirements may be eligible

to retire early. The employee must:

1. Meet the minimum age and service requirements -

   • At least age 50 with at least 20 years creditable Federal service, OR

   • Any age with at least 25 years creditable Federal service;

2. Have served in a position covered by the OPM authorization for the minimum

   time specified by OPM (usually 30 days prior to the date of the agency request);

3. Serve in a position covered by the agency's VERA plan; and

4. Separate by the close of the early-out period.

What is the effect on your annuity if you take an

early retirement option?

Employees considering an early retirement must consult with their human

resources office and follow agency procedures to receive an annuity estimate and

obtain advice specific to their personal situation.    You may

also want to consider using a federal retirement calculator which will assist

you in performing "what if" calculations to help you decide whether to take

an early-out.  

CSRS Annuity

• Commencing date of annuity - If the employee retires on the 1st, 2nd, or 3rd

  day of a month, annuity begins the following day. Otherwise, annuity begins the

  first day of the month following retirement.

• Calculation of annuity - Annuity is calculated based on the average high-3

  salary and years and months of creditable service. Unused sick leave can be used

  for additional service credit. If the employee is under age 55, this calculation

  is reduced by one-sixth of one percent for each full month he/she is under age

  55 (i.e. 2% per year).

FERS Annuity

• Commencing date of annuity - Annuity begins the first day of the month

  following retirement.

• Calculation of annuity - FERS Basic Annuity is calculated based on the

  average high-3 salary and years and months of creditable service. Under FERS,

  unused sick leave can not be used for additional service credit, unless the

  employee is a FERS transferee with a CSRS component. A FERS transferee with a

  CSRS component receives credit for unused sick leave; the amount of credit will

  be the lesser of:

  • The employee's sick leave balance as of the date of transfer to FERS; or

  • The employee's sick leave balance as of the date of retirement.

There is no annuity reduction in FERS for employees who retire on an early

voluntary retirement under age 55. A FERS Transferee with a CSRS Component in

his/her annuity, who retires before age 55, will have the CSRS portion of the

payable annuity reduced by one-sixth of one percent for each full month he/she

is under age 55. No reduction will be applied to the FERS component of the

annuity.

A FERS Annuity Supplement is payable to an employee who has completed at

least one calendar year of FERS service when he/she reaches Minimum Retirement

Age (MRA). MRA is age 55 to 57, depending on date of birth. The annuity

supplement is payable until eligibility for Social Security begins at age 62,

subject to an earnings limitation.

Early Retirement on Benefits

Health Benefits: Employees retiring in conjunction with a

VERA or Voluntary Separation Incentive Payment (VSIP) authority must have been

covered under the FEHB Program (1) for the last 5 years of their Federal

civilian service in order to continue such coverage in retirement, or (2) if

less than 5 years, for all service since the employee was eligible for these

benefits unless these requirements are waived.

OPM will grant pre-approved waivers to employees who have been:

1. Covered under the FEHB Program continuously since the beginning date of the

   agency's latest statutory VSIP authority, or OPM-approved VSIP or VERA

   authority; and

   • Retire during the statutory VSIP or OPM-approved VSIP/VERA period;

     and

   • Receive a VSIP; or

2. Take early optional retirement (i.e., VERA); or

3. Take discontinued service retirement based on an involuntary separation due

   to RIF, directed reassignment, reclassification to a lower grade, or abolishment

   of position.

Coverage as an annuitant is identical to coverage as an employee, but

premiums are not paid on a pre-tax basis.

Life Insurance: Federal Employees Group Life Insurance can

be continued through the retirement system provided the employee has carried the

coverage for at least five years prior to retirement. Value and cost depend on

elections made at retirement.

Source:  OPM  opm . gov / employ / vera / vera01 .

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