Terry Gerton Well, it is September 30th, so there\u2019s a lot happening in all of the air around us. But the place I want to start with you today is the end of the road for the fork in the road. People who took the deferred retirement or resignation package, it goes final today. So talk us through what they should expect to have happen.<\/p>\n
Tammy Flanagan That\u2019s a good question, Terry, because we\u2019ve got potentially tens of thousands of employees not only separating, just resigning, but trying to retire at close of business today, who haven\u2019t probably been at work for a number of months. So they\u2019ve been doing everything kind of blindly through their HR office, through emails and that sort of thing. So I know that OPM had a big spike in retirement applications earlier this year. I think it was people trying to avoid the repercussions of the Big, Beautiful Bill, because there were some proposals in that that would have reduced drastically federal retirement benefits. And luckily those never were finally included in the bill, but nonetheless, we saw a huge spike in May and also in June of retirement. So I think that may have lessened the load for today, as far as how many people were actually going to retire today, because I think, like I said, many of those folks may have re-upped their date to an earlier time. But nonetheless, based on estimates, it\u2019s still going to be a huge influx of retirements hitting OPM within the next month or two.<\/p>\n
]]><\/p>\n
Terry Gerton And what should people expect about processing? Because, I mean, here we sit the day before shutdown. What happens, if we shut the government down tomorrow, to all of these retirement packages?<\/p>\n
Tammy Flanagan Exactly. Well, employees most likely put these applications in much earlier than just yesterday or today. So the agencies, in many cases, have already started to process. We\u2019re now implementing the online retirement application at OPM, which does simplify somewhat the whole upfront part of the retirement process, where employees\u2019 information is going to be electronically submitted to OPM. However, that doesn\u2019t get completely submitted to OPM until after the employee has separated. So that won\u2019t be til October at the earliest, maybe later, because from what I\u2019m hearing from agencies, they\u2019re still working on August retirements. And here we are at the end of September. So I think the main word of the day is patience, because there\u2019s going to be delays, undoubtedly, for many employees. So I don\u2019t know how long it\u2019s going to take. Many employees are working in agencies where literally thousands of employees might be retiring this month or over the past several months. And if you look at an average retirement specialist and the work they still have to do, even with the online retirement application, they still have to ensure health benefits continuation, life insurance, making sure that all the employee service history records are transitioned to OPM. So that still takes time. And an average specialist might do 10 cases a month. And now here they are possibly doing thousands of cases within that office. So I\u2019ve heard from some agencies that are trying to pull in HR folks from other divisions that have some experience, they would temporarily get assigned to this area, because it is an overwhelming task, starting with the employee who\u2019s worried about their benefit, to the HR specialist who\u2019s feeling overwhelmed with questions and with processing issues, and then it\u2019s going to trickle down to OPM that is in the same boat. They\u2019re going to be experiencing this big surge of retirement applications when they normally wouldn\u2019t be, this is not normal. It usually comes at the end of the year and they kind of gear up for that. But this year it\u2019s happening kind of starting with the springtime and running all the way straight through, probably through December 31st, actually.<\/p>\n
Terry Gerton Tammy, I\u2019m sure you\u2019ve guided people through retirements in other shutdowns. Do the HR teams and OPM\u2019s retirement processing team continue to work? Are they excepted service or are they also typically furloughed during a shutdown?<\/p>\n
Tammy Flanagan Yeah, my understanding is they\u2019re still going to be furloughed. I had heard somewhere that for health insurance transitions, that those employees who handle those would be considered essential, so I would hope that some of the HR folks would also be considered essential, but I\u2019m not sure if that\u2019s permitted or will happen. So I would count on the fact that there\u2019s going to be a standstill in processing, at least at the agency level. OPM will still be doing their job up in Boyers, PA. They\u2019re an independent agency. So they\u2019re funded through the trust fund, so that way they\u2019ll keep working. The TSP continues business as usual as well, being an independent agency not funded by appropriations. So those two areas will be fine, but it\u2019s at the agency level where these employees who are trying to get out the door, get their last paycheck, get their payment for their annual leave, there could be some delays there for sure.<\/p>\n
Terry Gerton Well, that is an important planning note for sure. I\u2019m speaking with Tammy Flanagan. She\u2019s a principal with Retire Federal. Tammy, you also just mentioned health benefits and some other things. What happens to retiree benefits during a shutdown?<\/p>\n
Tammy Flanagan Well, your health insurance luckily will continue because even if you resign from federal service, you get 31 days of free coverage, basically. So that\u2019s going to continue in the final payoff because employees will get paid back who are not RIF-ed during the shutdown. They will get repaid their salary and then deducted from that will be the premiums that they owe. So they shouldn\u2019t have to worry about health insurance or dental and vision coverage. They can still go to the doctor and have emergency care, whatever they might need without fear of getting a big bill, those things will still be there for them.<\/p>\n
Terry Gerton And the annuity payments, if your retirement had already been processed, those continue as well, right?<\/p>\n
]]><\/p>\n
Tammy Flanagan Right. Yeah, the annuity payments still should come October 1st, tomorrow. So hopefully they\u2019ll see those deposits go in the bank for those folks who are lucky enough to already be through the retirement transition and their retirement benefits are already processed or in process where they\u2019re getting interim.<\/p>\n
Terry Gerton So we\u2019ve been talking up til now about people who were expecting to leave the government today. There\u2019s some news out of OPM, or out of OMB, last week that they may also process a RIF on 1 October if the government shuts down. Talk us through what that means and whether it\u2019s even feasible.<\/p>\n
Tammy Flanagan That was a shock, I\u2019m sure, to everybody. And of course to me as well, because that was totally unexpected. That\u2019s never happened before during the government shutdown or furlough period. My understanding is there has to be some notice for a RIF, which there was none, it came out last week, very suddenly. So it will be interesting to how that plays out, but I do worry about the employees who are going to get those notices that they won\u2019t be coming back to work, that they\u2019re actually out of work. And even if there is a court case that challenges this, it\u2019s going to be a time before all of that gets settled. And whether or not those employees come back to work or not is going to be up in the air for a while.<\/p>\n
Terry Gerton There are actually a lot of rules that you have to follow in preparation for a RIF. Is it possible to put one together sort of across the federal government in less than a week?<\/p>\n
Tammy Flanagan If you\u2019d asked me that a year ago, I\u2019d say no, that the rules have to be followed. But we\u2019ve seen a lot of things happening this year that don\u2019t follow the normal pattern of events and that don\u2019t seem to be legal in the eyes of people who have gone through these things before. There are rules, there\u2019s regulations, there\u2019s laws that govern the way to produce a RIF and to conduct a RIF situation. So I don\u2019t know, this is above my pay grade as far as whether or not this is going to actually go through. It\u2019ll be interesting to see how it plays out and it\u2019s just unprecedented.<\/p>\n
Terry Gerton So let me ask you one more question about this, looking into your crystal ball, if the government shuts down tomorrow and RIF notices go out, what would be your first point of advice for someone who surprisingly receives one of those RIF letters?<\/p>\n
Tammy Flanagan Some of those folks will be eligible for discontinued service retirement. So if they\u2019re age 50 with 20 years or any age with 25 years of service, fortunately, they would be eligible for an immediate retirement benefit. Although I\u2019m sure they weren\u2019t planning on it since they hadn\u2019t signed up for the DRP back when it was first available. So these employees might be facing early retirement unexpectedly. They will still have to file an application because the whole idea of being RIF-ed does not mean that you\u2019ve applied for retirement. So they\u2019ll still have to go through the whole retirement process, and it would probably be effective as of September 30th. And again, like I said, this is not any notice. So the employees normally would have time to put the application in before they separated. Now there\u2019s going to be a delay because they don\u2019t even know what to do. So they\u2019re going to have to fill out this new online retirement application without any prior knowledge about their retirement. So it\u2019s going be very unsettling, to say the least.<\/p>\n
Copyright
\n \u00a9\u00a02025 Federal News Network. All rights reserved. This website is not intended for users located within the European Economic Area.\n <\/p>\n","protected":false},"excerpt":{"rendered":"Terry Gerton Well, it is September 30th, so there\u2019s a lot happening in all of the air around…\n","protected":false},"author":2,"featured_media":177673,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[84,79139,4176,79140,79141,4174,4175,79142,79143,79144,56,54,55],"class_list":{"0":"post-177672","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-deferred-resignation-program","10":"tag-finance","11":"tag-fork-in-the-road","12":"tag-office-of-personnel-management","13":"tag-personal-finance","14":"tag-personalfinance","15":"tag-reduction-in-force","16":"tag-retire-federal","17":"tag-tammy-flanagan","18":"tag-uk","19":"tag-united-kingdom","20":"tag-unitedkingdom"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/177672","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=177672"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/177672\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/177673"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=177672"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=177672"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=177672"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}