The Office of Personnel Management hopes to complete final regulations for phased retirement — a flexible option that would allow feds to ease into retirement on a part-time basis — by October.

“We are working hard on the rule,” OPM Director Katherine Archuleta said during an exclusive Federal News Radio online chat. “We are hopeful that it will be completed in fiscal year 2014. We want to make sure we get it right and we will have an update soon.”

(Click here to view an archived version of the chat and click here to view a followup Q&A with OPM.)

Congress OK’d phased retirement in 2012, paving the way for employees to partially retire and draw on half of their earned retirement benefits while continuing to work part-time. Last summer, OPM issued draft regulations spelling out the particulars of the new program. Would-be phased retirees must have 20 years of experience and be eligible for immediate retirement, according to the proposed rules, although those requirements could change when final regulations are published.

“Each agency will have the flexibility to implement the mentoring component in a way that is best for their agency and their employees,” Archuleta said during the chat.

Before the live chat, Archuleta joined Your Turn with Mike Causey to discuss the phased-retirement rule writing, agency diversity initiatives and steps to re-energize the federal workforce.

Phased retirement could help “create a system that promotes unique mentoring and expanded institutional knowledge and we don’t want to lose that knowledge as our leadership is retiring,” Archuleta said. “So, I think it offers a new and innovative alternative to traditional retirement. … I think it offers another toolbox for the department heads and managers to really look at their workforce and do their workforce planning.”

Archuleta: Employee engagement ‘still running strong’

It’s clear the budget squeeze has impacted federal employees’ morale, Archuleta said.

“I think it’s hard for employees right now to hear so many things and to face the challenges that they’ve faced, with sequestration and budget cuts and furloughs,” she said.

But she said there’s a key difference between employee satisfaction and employee engagement:

“Employee engagement is still strong,” she said. “The employees who work for the federal government believe in what they do. … We’re a purpose-driven employer. We are there to help people. And I certainly feel that. When I talk to employees, as I do all the time, and I ask them what keeps them in their jobs, they tell me that they believe that they’re making a difference. So, employee morale? Not good. Employee engagement? Still running strong.”

Archuleta also said she’s working hard to ensure diversity initiatives are not impeded by tight budgets and reduced hiring at many agencies.

“I think there’s really a commitment by not only this President and me but the department heads too, to really make government really reflect the nation’s changing population,” she said. “As we take a look at the federal workforce and how it can look like the America we serve, we need to be sure that we’re reaching out as far and as wide as we possibly can.”

But the diversity initiatives don’t end with recruiting new faces into federal service. Archuleta said she wants to make sure under-represented groups, such as Latinos, are part of the leadership pipeline.

“This is a challenge, certainly, but it’s also an opportunity,” she said. “I think it gives us an opportunity to work with the Hispanic leadership throughout the country as well as our own Hispanic federal employees to bring attention to this and to improve our numbers.”

During the online chat, Archuleta also discussed the retirement claims backlog and recruitment efforts in the federal government. View an archived version of the chat below.

Federal News Radio received so many questions during the online chat but we were unable to answer them all in the time allowed. OPM has since provided answers to your remaining questions. You can find those answers here.

Having trouble with this online chat? Email Web Manager Julia Ziegler for assistance.

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