What Retired Federal Employees Need to Know About Government Shutdowns

Government shutdowns can be disruptive, but the good news is that federal retirees will encounter minimal impacts.

A partial government shutdown can raise concerns for federal employees and retirees alike. Fortunately, guidance from the Office of Personnel Management (OPM) offers clarity and reassurance for those already retired or planning to retire soon.

Annuity Payments

Perhaps the most important thing for retirees to know is that their monthly annuity payments will not be disrupted during a partial shutdown. OPM states that federal retirees under both CSRS and FERS will continue to receive their scheduled monthly annuity payments on the first business day of the month.

High-3

If a partial government shutdown (also known as a shutdown furlough per OPM’s guidance) occurs during an employee’s highest earning years, there’s no need to worry about its effect on retirement calculations. Employees who would have been in pay status but for the lapse in appropriations will receive retroactive pay once the shutdown ends. Therefore, their high-3 average pay—the basis for calculating retirement benefits—remains unaffected.

Recently Retired Federal Employees

Federal employees who would have retired during a shutdown should have their retirement made effective as of the date they requested once the shutdown concludes. OPM notes that this can be done as long as the employees submitted a notice of their desire to retire on or before the requested date.

The retirement request can be made informally, such as through a letter requesting retirement. It can be either mailed or personally submitted to the agency. Any additional required paperwork, like the formal retirement application form, can be completed once the agency reopens.

If an agency or payroll center submits a retirement application to OPM, the retiree will begin receiving interim annuity payments while OPM Retirement Specialists process the application. Since OPM Retirement Services is funded by the trust fund it manages, its employees will continue to work normal operating hours during a government shutdown.

If an agency or payroll center has not yet submitted the retirement application or if the application is incomplete, the retiree will likely experience some delay. This is because OPM must wait for other agencies to submit all the necessary information to process the retirement. Some functions of these agencies may not be operational during a Government shutdown.

Because OPM’s Retirement Services remains operational during a government shutdown, federal retirees can still make updates to their benefits both online and by calling the Retirement Services office.

Final Thoughts

While a government shutdown can disrupt many federal operations, retirees and those nearing retirement can rest assured that their benefits and retirement processing are largely protected.