Guest blog post by Ellen Herbst and Howard Friedman, Co-chairs of the Department Labor Management Forum

The make-up of the work force, and in particular the Federal work force, is changing rapidly. According to the General Accountability Office, more than a third of career Federal employees are projected to be eligible for retirement by September 2017, compared to just 14 percent at the same time in 2012.  This changing landscape moved Congress and the Office of Personnel Management (OPM) to initiate a new policy called phased retirement.  While OPM began the process, they left it up to Departments to determine how to implement the policy. This is a big change with potential for real positive impact.  Therefore, we will take a moment to explain what this means for us.

What is it?

Phased retirement is a new voluntary program for approved retirement-eligible Federal employees to transition to retirement while still working part time.  Approved phased retirement employees will convert to a part-time work schedule (now 40 hours per pay period) while also starting to collect about half of their pension, for up to 2 years.  The 2012 law authorizing phased retirement requires that phased retirement employees devote at least 20 percent of each biweekly half-time work schedule (8 hours) to “mentoring,” to share and preserve the institutional knowledge they have gained over the course of their career.

Why the new policy?

The 2012 law that authorizes phased retirement for Federal employees was developed to address the projected wave of retirements and reduce the impact their departures would have on Federal agencies, supervisors, and remaining employees.  To avoid understaffing and suddenly losing the specialized institutional knowledge and skills as long-term employees leave, the law provides a new partial retirement option to retain those with specialized skills and knowledge long enough so that more of that knowledge can be transferred.  While an employee is in phased retirement, they will be required to devote part of their time to mentoring subordinate employees. The Department policy was developed collaboratively with labor. OPM issued implementing regulations in 2014, but decided to allow each department or agency to develop its own policy and practices for issues such as how to define “mentoring,” how long phased retirement agreements would last and whether any limitations on grade level would be included.

The Department’s phased retirement policy is unique.  It is the first Department policy developed from scratch through management and union collaboration.  The Department Labor-Management Forum (DLMF) comprised of 23 management and labor representatives chose a working group of eight members--four management and four labor representatives--to develop the draft policy.  The working group truly collaborated in developing the new policy. This is a great example of how management and labor can fulfill President Obama’s Executive Order to work together pre-decisionally.  The overall DLMF membership then reviewed and recommend the policy to the Department.  Sentior Department management the Office of General Counsel made some revisions.  All parties approved the final version.

What did we decide about implementation? 

The working group agreed that phased retirement would be more beneficial to our Department if “mentoring” is defined broadly and is open to employees of all GS and SES levels.  The Department requirement for “mentoring and/or other learning activities” includes:  one-on-one mentoring; documenting programs and processes, summarizing research and trends, training, and other appropriate activities.

This broad definition allows each operating unit and bureau to tailor the umbrella policy to its own culture and needs. 

Who benefits from this new policy?

The whole Department, at all levels, will benefit from retaining retirement-eligible employees a little longer to share and document their institutional knowledge.

There are also clear benefits to the phased retirement employees.  By working part time and collecting half of their pensions, phased retirement employees may earn more money than they would if they fully retired on their Government pension alone.  They can continue to accrue more time in service, leave time, and credit hours to apply to full retirement.  Phased retirement employees also continue to be eligible for the Thrift Savings Plan, the Federal Employees Health Benefits Program and get cost-of-living increases.  They can continue contributing to their Thrift Savings Plan account and to their FSAFEDS accounts for medical and dependent care, which cannot be done by full retirees.

There is also the option for phased retirement employees to request to return to full-time work, subject to approval by supervisors.

On behalf of the leadership of the Department, we are excited to unveil the fruits of many months of collaborative work, and a new policy that will truly increase our operational excellence and our ability to further enable the Department’s mission of supporting American business.