Federal employees facing removal encounter many uncertainties and misinformation. One such concern centers around what happens to a federal employee’s retirement benefits upon termination. There is a misconception that an employee who is terminated will lose all entitlement to his or her earned retirement benefits. This is not true.
For federal employees, “retirement benefits earned over the course of one’s federal career are generally available upon separation from federal service, even when that separation is agency initiated.” This means that even terminated employees can collect these benefits.
If this all sounds familiar, perhaps last year’s headlines of former FBI Deputy Director Andrew McCabe’s removal come to mind. News swirled that McCabe would lose all of his benefits because he was fired just shy of early retirement at age 50. Such propositions were untrue and were quickly debunked across national media.
Under FERS (Federal Employee Retirement System), federal employees with a minimum of five years of service are fully vested in their pension benefits, meaning even if the employees leaves the federal service, he or she can still collect their benefits.
However, despite this general rule, there are some narrow statutory exceptions that would require an employee to forfeit such benefits. If an employee is convicted of any of the following offenses, annuity and retirement benefits will not be paid:
- delivering defense information to a foreign government;
- disclosure of classified information;
- espionage, treason or advocating overthrow of government;
- perjury in relation to the above acts; or
- perjury involving false testifying in connection with a matter relating to the interference or endangerment of security or defense to the US.
What if an employee is a part of Voluntary Early Retirement Authority (VERA)? This program allows agencies to temporarily lower the age and service requirements to encourage more voluntary separations during a restructuring or downsizing. In this instance, employees will be entitled to their benefits years earlier they would be otherwise eligible. However, a federal employee who is removed for misconduct or unacceptable performance cannot participate in this program.
Overall, it is unlikely that a termination from the federal service will affect your retirement benefits. So long as you worked at least five years, and haven’t committed some serious crime listed above, you are all but guaranteed to receive retirement benefits.
If you have more questions about federal retirement benefits, call us today at (202) 463-6036 or visit our website. Alan Lescht and Associates, P.C. has more than two decades of experience assisting employees in all aspects of federal employment law.