Returning to fight coronavirus as a reemployed annuitant? Here’s what you need to know

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The Trump administration has called for a whole-of-government approach toward fighting the coronavirus.

For some agencies, that means calling on federal retirees with a deep sense of public service duty to return to government and join the fight.

The Department of Veterans Affairs, which already had some 40,000 vacancies during pre-virus times, was the first to put the call out to reemployed annuitants.

The agency is hiring doctors, nurses, pharmacists and other retired medical professionals on a full-time basis to return to VA. Many of them will likely join with a full salary and their annuities, thanks to a special authority from the Office of Personnel Management.

VA is treating more than 3,000 coronavirus cases among veterans, but the department also serves as the nation’s backup health system during a major health crisis. So far New York and New Jersey have turned to VA for help during the coronavirus pandemic.

Other agencies may soon join VA in calling for additional reemployed annuitants to help with the coronavirus fight.

Thinking of joining them?

James Marshall, a federal benefits expert with the National Active and Retired Federal Employees (NARFE) Association, said it doesn’t matter whether you’re filling out the application now — or you’re still employed at your agency.

Knowing the ins and outs of returning to government as a reemployed annuitant will help you better plan financially for retirement, he said.

“Before you retire… if you think there’s a small chance you might want to return to federal service later on in life, you want to learn all about the rules and regulations governing reemployed annuitants, because you may or may not want to be [one],” Marshall said Wednesday on Your Turn with Mike Causey.

Here’s what you need to know about returning to government as a reemployed annuitant.

What is a reemployed annuitant?

Reemployed annuitants are retired federal employees who have been rehired by their former agency or another agency in the federal government.

Under a typical arrangement, a reemployed annuitant will be paid by the agency for his or her work. The agency, however, will offset that salary by the amount of the retiree’s federal pension.

There are a few exceptions where pensions stop and former feds, perhaps those who initially retired with a disability, return to government and pick up their careers where they left off. But those situations are rare, Marshall said.

Even before the coronavirus pandemic, retired federal employees have always had a chance to return to government as reemployed annuitants, depending on the opportunities available. The Census Bureau, for example, brought back reemployed annuitants for the decennial count, Jessica Klement, NARFE’s staff vice president for policy and programs, said.

The Agriculture Department brought back retired employees to temporarily fill vacancies created by the relocation of two of its research bureaus from Washington D.C., to Kansas City.

What is a dual compensation waiver?

Dual compensation waivers allow an agency to rehire a federal retiree and pay them a full salary, plus their usual annuity under the Federal Employees Retirement System (FERS) and the Civil Service Retirement System (CSRS).

“Even outside of an emergency, this is the most common situation that I encounter,” Marshall said. “A lot of it has to do with DoD and other agencies that are rehiring people a lot.”

Agencies already had the authority to offer these waivers, per a decades-old provision in the annual defense authorization bill. Under that authority, agencies can use these dual compensation waivers to hire reemployed annuitants on a part-time basis without OPM approval.

That authority has been renewed every five years or so, and Congress mostly recently included another extension in the 2020 National Defense Authorization Act. This authority for part-time annuitants now runs through 2024.

But agencies still need OPM permission to grant dual compensation waivers to reemployed annuitants for full-time work. That’s what VA asked for last month, and OPM quickly gave them the approval.

OPM has said it will quickly grant approval to other agencies, should they also seek full-time reemployed annuitants during the coronavirus pandemic.

I have a job offer as reemployed annuitant. What should I know first?

First, retirees should find out whether their potential position will allow for retirement coverage, Marshall said.

Every federal appointment is different, and your eligibility for retirement and health benefits under these positions may vary depending on a variety of factors.

Not all reemployed annuitant positions, especially those that are considered temporary in nature, will allow for retirement coverage, Marshall said. Annuitants who accept a position that doesn’t allow for retirement coverage, for example, won’t be able to contribute to the Thrift Savings Plan.

Many of the positions open to reemployed annuitants during the current coronavirus pandemic may be temporary positions, Marshall acknowledged.

That’s why it’s a good idea to ask your agency the following questions before accepting a job offer as a reemployed annuitant:

  • Will my annuity continue?
  • Will my salary be affected?
  • Will I have retirement coverage or not?
  • How will any of my federal benefits, such as coverage under the Federal Employee Health Benefits Program (FEHBP), be affected? What are my options?

I have a dual compensation waiver. What are the benefits?

Under a dual compensation waiver, reemployed annuitants will receive a full salary. These retirees will not contribute to their pensions in the Federal Employees Retirement System (FERS) or Civil Service Retirement System (CSRS), and their annuities stay the same.

CSRS-offset and FERS retirees will pay a Social Security tax, but regular CSRS retirees will not, Marshall said.

Reemployed annuitants with dual compensation waivers are not allowed to contribute to the Thrift Savings Plan, but there are other benefits of taking a full salary, Marshall added.

Reemployed annuitants who, for example, take a position that would typically allow them to have federal health insurance can ask their agencies to transfer that insurance from OPM to their current new jobs, Marshall said.

“Pre-taxed health insurance cost is a lot better while you’re working as a reemployed annuitant than having it on a post-taxed basis in retirement with OPM,” he said.

Reemployed annuitants who were paying for Medicare Part B can save some money as well.

“I can cancel paying for Part B, because my employment health insurance becomes my primariy provider,” Marshall said. “That can save me some money as well while I’m working as a reemployed annuitant. But again, that’s only if the position is one that can pay retirement coverage.”

But again, there’s a catch. Reemployed annuitants who take positions that last a year or less may not be eligible to transfer their federal health insurance, Marshall added.

He suggested retirees ask about the length and insurance opportunities associated with each reemployed annuitant position during the interview process.

Are there any benefits to not taking a dual compensation waiver?

Yes, there may be some benefits — again, depending on whether the position allows retirement coverage or not.

Some agencies may allow their reemployed annuitants to choose whether they want to accept a full salary under a dual compensation waiver or take the salary offset instead.

Accepting a salary offset would allow reemployed annuitants to accrue more savings toward their retirement, Marshall said.

“You could also be allowed to contribute to the TSP again, which means if you already passed the age of 72 or 70.5 years old, there wouldn’t be any required minimum distributions anymore while you’re working with a salary offset,” he said.

There may be other benefits. You could, depending on the position, transfer your federal health and dental insurance to your agency for a premium conversion.

In addition, new reemployed annuitants may be able to open flexible spending accounts again or have an easier time applying to the Federal Long-Term Care Insurance Program, Marshall said.

I received a buyout before leaving government. Do I have to pay it back if I return as an reemployed annuitant?

It depends.

Typically, employees who take a Voluntary Separation Incentive Payment (VSIP)  but later return to government within five years of separation must pay the full amount back.

But agencies may have the authority to waive the typical payback requirement. Marshall suggested annuitants who have taken a VSIP in the past should ask about that authority during the interview process.

“Certainly ask the hiring [agency] if they have the authority to waive that payback, he said.  “If they don’t, you have to pay that back before you can land your first day on the job.”

Federal employees who have been offered a buyout but think they may want to return to government later on can choose to deny the VSIP.

How do I find federal jobs for reemployed annuitants?

Your best bet is USAJOBS.gov, Marshall said.

It’s ultimately up to each agency to decide how they want to advertise their positions. Some may explicitly indicate a job is open to reemployed annuitants, but some may not.

Retirees applying to federal positions on USAJOBS will be asked whether they receive a military or civilian pension, Marshall said.

That’s the place to indicate your status as a federal retiree. From there, agencies will likely ask for more information.

“From there they’re going to let you whether or not there’s a waiver for that position, if it wasn’t advertised. A lot of times it’s not advertised,” Marshall said. “Because they’re really offering the job to anybody who’s qualified.”

Where can I find more information or advice on reemployed annuitants?

OPM has a variety of frequently asked questions on reeemployed annuitants here.

The Department of Veterans Affairs has a page on the career opportunities available during the coronavirus pandemic, with a special page for interested federal retirees here.

NARFE will offer a free webinar Tuesday, April 14 at noon on this subject. You can sign up to register here.

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